Nova Scotia film tax credit changes damage screen industry: report

Changes to Nova Scotia's film tax credit are eroding the province's screen industry, forcing young, well-educated people to find work in other parts of the country, says a PricewaterhouseCoopers study.

The economic assessment, dated April 13, 2016, was commissioned by the Canadian Media Producers Association and Screen Nova Scotia.

CBC News obtained a copy of the report, which PwC requested only be made available to industry stakeholders and not the general public.

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In it, PwC surveyed 584 people working in the industry and noted that those working in the sector are more highly educated, younger and mobile than the overall Nova Scotia labour force.

It also identified a decline in film industry production since the Nova Scotia government announced a cut to the film tax credit program last year.

Unsustainable subsidy

Premier Stephen McNeil said the change was part of a series of hard economic decisions the province was forced to make. He called the previous program a "direct labour subsidy" and not a tax credit.

The premier also said he is not open to changing the currentfilm and television incentive fund, which provides less funding than the tax credit.

"The fund is there. I look forward to them continuing to go forward and use the fund."

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Meanwhile, Independent MLA Andrew Younger introduced a bill Thursday in the House of Assembly that provides for a tax credit of 20 per cent on eligible expenditures for sound recordings by Nova Scotia companies.

In 2014, the screen industry had an economic footprint of $180 million in gross domestic product, employed 3,200 people and generated $137 million in labour income, according to the PwC report.

Opposition leader Jamie Baillie said the report shows the premier needs to change his stand on film industry incentives.

"We have an independent third party study that confirms our worst fears," he said."This is an industry that our government actually makes money in. There are 3,000 jobs at stake here."

Heading for Toronto

PwC also noted the numbers of suppliers to the sector is decreasing, which will contribute to higher costs for those producers who do stay.

"We understand that at least one important industry supplier has left the province as a result of the change in incentives and we understand other companies involved in the screen industry may be considering closing or leaving Nova Scotia."

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The reduction in film tax credits served to dry up future business prospects, causing workers in the sector to pull up stakes and head to more lucrative areas, "such as Toronto and Vancouver or beyond," the survey says.