Canada: Revenue Canada Answers Questions About the Film Tax Credit Programs

Last Updated: June 23 1999
Article by David W. Steele

Revenue Canada recently issued a series of questions and answers regarding the federal government’s tax credit programs that are available to the Canadian film industry.

Question 1: What tax credit programs are available to help the Canadian film industry?

Answer 1: The federal government offers two programs to help the film industry in Canada. They are the Canadian Film or Video Production Tax Credit ("FTC") and the Film or Video Production Services Tax Credit ("PSTC") programs.

Question 2: What is the purpose of the FTC program?

Answer 2: The primary objective of the tax credit is to encourage Canadian programming and to stimulate the development of an active domestic production sector. The FTC program gives a tax credit to all qualified producers of eligible productions, and eliminates the need for complex tax shelter schemes that reduce financial help for producers. Canadian control requirements ensure that the incentive is available only to Canadian controlled companies.

The FTC program gives a refundable tax credit of 25% of qualified labour expenditures incurred, after 1994, by a qualified corporation for the production of a Canadian film or video production. The maximum credit available is limited to 12% of production costs net of assistance. The qualified labour expenditures cannot be more than 48% of production costs net of any governmental or non-governmental assistance. You cannot claim the FTC for a production that gets a benefit under the PSTC program.

Question 3: What is the purpose of the PSTC?

Answer 3: The PSTC program was announced by the Minister of National Revenue and the Minister of Finance in a news release dated July 30, 1997. The legislation received royal assent in June 1998. The purpose of the PSTC is to give help to film and video productions produced in Canada where Canadian labour is used. This program complements the FTC program since it is open to both Canadian and foreign-owned companies. The intention of this program is to make Canada a more attractive place for film production and stimulate job growth in the Canadian film industry.

The PSTC gives a refundable tax credit of 11% of qualified Canadian labour expenditures incurred for an accredited production after October 1997. You cannot claim the PSTC for a production that also gets a benefit under the FTC program.

Question 4: Who administers these programs?

Answer 4: The film tax credit programs are co-administered by Canadian Heritage through the Canadian Audio-Visual Certification Office ("CAVCO") and Revenue Canada.

For the FTC program, CAVCO is responsible for issuing a Canadian film or video production certificate, which gives a claimant an estimate of the qualified labour expenditures for the FTC. For the PSTC program, CAVCO is responsible for issuing the accredited film or video production certificate for an accredited production.

Revenue Canada is responsible for reviewing film tax credit claims, assessing corporate income tax returns, and issuing timely refund cheques for the tax credit programs.

CAVCO and Revenue Canada jointly promote the tax-based incentives and help claimants as necessary.

Question 5: How does a corporation claim an FTC or a PSTC?

Answer 5: The first step to get a tax credit under either program is to get the appropriate certificate from CAVCO. For the FTC program, you have to get a Canadian film or video production certificate. For the PSTC program, you have to get an accreditation certificate for a film or video production.

The next step is to attach the appropriate certificate, or a copy, and Form T1131 "Claiming a Canadian Film or Video Production Tax Credit", or Form T1177 "Claiming a Film or Video Production Services Tax Credit" to the front of a completed T2 Corporation Income Tax Return. This will help Revenue Canada to quickly identify a claim.

Send the return and attachments to your Revenue Canada tax centre. On receipt, the tax centre will send your claim to your local tax services office. The tax services office will determine if a full review of your claim is necessary. Revenue Canada has specially-trained staff familiar with the film industry to review claims.

Question 6: How long does it take to get a refund?

Answer 6: Revenue Canada tries to issue any applicable refund cheque within 60 days for a complete claim that does not need a review, and to process a claim that needs review in 120 days.

Question 7: Did the 1999 federal budget propose income tax changes to either the FTC or the PSTC?

Answer 7: The 1999 federal budget did not have any impact on either of the tax credits. However, the film industry and Revenue Canada are consulting on ways to streamline and improve the film tax credit programs. The goal is to ensure a more collaborative approach to the administration of these incentives in support of the Canadian film industry.



* * * * * * * * * * * * * * * *


The information provided herein is for general guidance on matters of interest only. The application and impact of laws, regulations and administrative practices can vary widely, based on the specific facts involved. In addition, laws, regulations and administrative practices are continually being revised. Accordingly, this information is not intended to constitute legal, accounting, tax, investment or other professional advice or service.

While every effort has been made to ensure the information provided herein is accurate and timely, no decision should be made or action taken on the basis of this information without first consulting a PricewaterhouseCoopers LLP professional. Should you have any questions concerning the information provided herein or require specific advice, please contact your PricewaterhouseCoopers LLP advisor.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.