Canada: An Overview Of Canadian Tax Credits For Non-Indigenous Film And Television Production


Canada, often referred to as "Hollywood North", continues as a leading innovator in the development and implementation of public sector incentives for film and television production. These incentives have stimulated a billion dollar industry in Canada for the production of both domestic or indigenous programming content and foreign based Canadian location or service productions.

Currently, these public sector initiatives comprise:

  1. Direct Federal and provincial assistance in the form of grants, loans and equity investments in Canadian content programming;
  2. Federal and provincial refundable tax credit programs available to domestic producers of Canadian content programming;
  3. Federal and provincial refundable tax credit programs available to domestic and foreign producers of non-Canadian content programming that employ Canadians and choose Canada as a location or service centre; and
  4. Canadian content program recognition designation for both qualifying Canadian domestic productions and foreign co-ventures.

In this monograph, we focus on the last two groups of these initiatives and in particular, their application to U.S.-based film and television productions.


The Federal Tax Credit Program

Under the administration of the Canadian Audio-Visual Certification Office (CAVCO) and the Canada Revenue Agency (CRA), the Canadian Federal government assists domestic and foreign producers by offering two types of refundable tax credits:

  1. The Canadian Film or Video Production Tax Credit (CPTC)

    A refundable tax credit available to Canadian domestic producers for qualified labour expenditures paid for services rendered in connection with the production of eligible Canadian content film and television productions. The CPTC program is intended to encourage indigenous Canadian programming and to strengthen the domestic production sector. The CPTC is calculated at a rate of 25% of actual qualified labour expenditures capped at 60% of total production costs. To the domestic producer of Canadian content programming, the CPTC represents a budgetary contribution of approximately 15% of the total cost of production (i.e., 25% of 60%).
  2. The Film or Video Production Services Tax Credit (PSTC)

    A refundable tax credit available to both Canadian producers and foreign producers with a permanent establishment (i.e., a production office) in Canada, for qualified Canadian labour expenditures paid for services rendered in connection with the production of qualifying non-Canadian content film and television productions. The PSTC program was designed to strengthen Canada's international reputation as a location of choice for film and video productions employing the services of Canadians. This refundable tax credit is based upon "qualified Canadian labour expenditures" incurred by an "eligible production corporation" for services provided in Canada by Canadian residents or taxable Canadian corporations for the production of an "accredited production." As a fully refundable tax credit, an eligible production corporation is entitled to a refund of the PSTC where the corporation has no federal income tax payable in a particular taxation year or where the credit is more than the amount owed in federal income tax.

How Much Does The PSTC Represent?

The PSTC is calculated at a rate of 16% of qualified Canadian labour expenditures. There is no cap on the amount of credit that can be received and the credit is completely refundable. The PSTC is not available where the production has received a tax credit under the CPTC.

Who Is Eligible To Claim The PSTC?

Canadian domestic corporate producers and foreign-owned corporations having a permanent establishment (a production office) in Canada are eligible to claim the PSTC. The corporation's primary activity must be in relation to a film or video production business or a film or video production services business. The applicant corporation must either own the copyright in the film during the production period or be engaged directly by the copyright holder to provide production services.

Minimum Expenditure Requirements To Qualify For The PSTC

To qualify for the PSTC, a film or television production must meet the following minimum expenditure requirements:

  • $1,000,000 Cdn. for a feature film;
  • $200,000 Cdn. for a one-hour television episode; or
  • $100,000 Cdn. for a 30-minute television episode.

Eligible Genres Of Production

The following genres of production do not qualify for PSTC benefits:

  • News, current event or public affairs programming
  • Talk and game shows
  • Sporting and award events
  • Reality television
  • Productions that solicit funds
  • Pornography
  • Advertising
  • Industrial, institutional or corporate productions

What Labour Expenditures Qualify For The PSTC?

Qualifying Canadian labour expenditures consist of the following for the stages of production from the final script stage to the end of post-production, paid in the year or within 60 days after the year end:

  • Salaries and wages:
    • Paid to persons who were resident in Canada at the time the payments were made
    • Paid for services provided in Canada
  • Remuneration paid to:
    • Non-employee(s) of the producer who are Canadian residents
    • Taxable Canadian corporations for the services of their employee(s) who are Canadian residents
    • Loan-out corporations or personal services corporations for the services of a Canadian resident, subject to certain restrictions
    • Partnerships for the services of a partner who is a Canadian resident
  • Reimbursements by a wholly-owned production company to its parent company for qualifying labour expenditures that were paid by the parent company on behalf of the production company

A producer's labour expenditure for the purposes of the CPTC must be reasonable in the circumstances and directly attributable to the production.

Can The PSTC Be Combined With Other Tax Credits?

While the PSTC can be claimed in conjunction with complimentary provincial tax credit programs, it cannot be combined with a claim for the federal refundable CPTC available to qualifying domestic Canadian content production.


In many provinces, provincial tax credits and incentive programs provide an additional source of funding for qualifying film and television productions. In a number of provinces, these provincial incentives are boosted by incentive credits and bonuses for regional production and training initiatives. In most cases, provincial tax credits can be combined with federal tax credits to augment the total benefits available to domestic and foreign productions produced in Canada. As is the case with Federal film tax credit programs, Provincial film tax credits are refundable to the extent the credit exceeds the producer's Canadian income tax payable.

Moreover, recognizing the importance of stimulating the domestic employment market for skilled animation, special effects and digital media workers, provincial governments in Ontario, British Columbia and Québec have legislated refundable tax credits for eligible computer animation and special effects activities, as well as interactive digital media products.

Assistance provided at the provincial level changes from time to time due to industry pressure on government to remain competitive with foreign tax credit programs. As well, competitive pressures between provinces result in some degree of jockeying at a provincial level. As one province enhances its film and television program, the remaining provinces are pressured to boost their support of film and television industries.

The attached chart provides a brief overview of the various provincial film and television tax credit programs as they exist on February 1, 2009. Please consult the applicable provincial funding agencies at the links provided on pages 9–11 for full particulars, limitations and restrictions applicable to these provincial tax credit programs.


Canada is currently a party to over 50 international treaties setting rules and procedures for Official Co-Productions with other nations qualifying those productions, or the Canadian component of those productions, as domestic productions for the CPTC and other Canadian public sector financing initiatives. However, no co-production treaty exists or is anticipated with the United States of America.

Having said this, both Official Co-Productions and other qualifying co-ventures may still be eligible for Canadian content program recognition, as designated by the Canadian Radio-television and Telecommunications Commission (CRTC).

The CRTC is the Canadian agency responsible, among other things, for the administration of the Broadcasting Act (Canada), and the licensing of Canadian broadcast undertakings. In the licensing of broadcast undertakings, the CRTC assures a voice for Canadian content programming by mandating defined levels of Canadian programming during various hours of the broadcast day. Moreover, the CRTC mandates minimum expenditure requirements on Canadian programming by Canadian pay and specialty television channels. In many cases then, CRTC "Canadian content" designation is advantageous in negotiating Canadian broadcast licenses and in garnering greater Canadian broadcast license fees.

Clearly, film and television productions that qualify for the CPTC meet the Canadian content criteria administered by both CAVCO and the CRTC. However, programming that does not qualify for the CPTC, like programming seeking to take the benefit of the PSTC, may still achieve designation as "Canadian" for CRTC purposes if it qualifies as produced pursuant to a Co- Venture under the CRTC's guidelines.

In order to qualify as a CRTC recognized Canadian co-venture, the following thresholds must be met:

  1. A Canadian producer must have an equal measure of decision making responsibility over the creative elements of production;
  2. The Canadian producer must have both entrepreneurial and financial risk by retaining the obligation to provide 50% of the financing and 50% of the profits;
  3. The Canadian producer does not have to own the copyright;
  4. An expenditure test must be met:

    • In the case of a co-venture with a U.S.-based partner, 75% of the production costs must be spent to or for Canadians, and 75% of processing and final preparation must be paid to or for Canadians; or
    • In the case of a co-venture with any other foreign partner, 50% of the production costs must be spent to or for Canadians, and 50% of processing and final preparation must be paid to or for Canadians; and

  5. A Canadian content points test must be met:

    • In the case of a co-venture with a U.S.-based partner, at least six CRTC points must be achieved; or
    • In the case of a co-venture with any other foreign partner, at least five CRTC points must be achieved.

Slightly varied criteria apply to co-venture production packages (i.e., co-ventures for more than one production undertaken by a Canadian and a foreign producer).

Canadian content points are as follows:

Live Action

Production Element




Lead Performer or First Voice

Second Lead Performer or Second Voice

Production Designer

Director of Photography

Music Composer

Picture Editor











Production Element



Scriptwriter and Storyboard Supervisor

First or Second Voice or First or Second Lead Performer

Design Supervisor

Layout and Background (location)

Key Animation (location)

Assistant Animation/In-Betweening (location)

Camera Operator (person) and Operation (location)

Music Composer

Picture Editor











At least one of the director or the screenwriter must be Canadian, and at least one of the two lead performers must be Canadian.


Canadian Film or Video Production Tax Credit (CPTC)

Canadian Film or Video Production Tax Credit (CPTC)

Alberta Film Commission

Film Incentive BC

Film or Video Production Services Tax Credit (PSTC)

Manitoba Film and Video Production Tax Credit

New Brunswick's Labour Incentive Film Tax Credit

Newfoundland and Labrador Film and Video Industry Tax Credit

Nova Scotia Film Industry Tax Credit

Ontario Film and Television Tax Credit (OFTTC)

Ontario Interactive Digital Media Tax Credit (OIDMTC)

Ontario Production Services Tax Credit (OPSTC)

Prince Edward Island Film & Television Office

Québec Film and Television Production Tax Credit

Québec Production Services Tax Credit

Saskatchewan Film Employment Tax Credit (SFETC)

Yukon Film Incentive Program

Cultural Agencies

Telefilm Canada

National Film Board

Funding Agencies

Ontario Media Development Corporation

Canadian Film Centre

Canadian Television Fund

Société de développement des entreprises culturelles (SODEC)

Professional Associations

Canadian Film and Television Production Association (CFTPA)



British Columbia


New Brunswick


Nova Scotia


Prince Edward Island




The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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
Related Topics
Related Articles
Related Video
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
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions