Despite last year’s fears that the return to the provincial sales tax would kill the local film industry, Burnaby filmmakers haven’t seen much of a shortage of projects to date.
Peter Leitch, president of Mammoth Studios in Burnaby and North Shore Studios in North Vancouver, said his studios have been busy with work recently, putting to bed some of the worst case scenarios that came up in 2013.
“The industry’s been pretty resilient,” he said. “Things have picked up from over a year ago.”
Last year, the B.C. government reverted from the harmonized sales tax to PST and government sales tax, which raised concerns from members of the province’s film industry.
Because the film industry in B.C. is not considered as a manufacturing industry, filmmakers are not exempt from paying PST on items they purchase to produce movies. Furthermore, B.C. is the only province in which filmmakers pay PST, making it enticing for production companies to make movies elsewhere in the country.
While the PST’s return hasn’t damaged the industry as badly as once thought, some local business leaders are cautious to accept that the PST won’t hurt the industry in the future.
Mike Kaerne, president of film equipment company HollyNorth Production Supplies and a director of the Burnaby Board of Trade, said that a number of factors have offset the negative effects of the PST on the industry.
He noted that the biggest difference is likely the strength of the U.S. dollar, which has allowed American production companies to still produce films affordably in B.C.
“Although we added seven per cent as an additional cost, we’ve gained in budget because now $100,000 U.S. is like $110,000 Canadian,” he said. “It’s somewhat mitigated the effect.”
Kaerne added that while the decision by the B.C. Liberals to reinstate the PST was an unpopular one for the industry, the re-election of the party actually indicated that things would even out.
“That provincial election provided some degree of assurance of political stability to the production companies that come in,” he said. “We kind of stuck with the devil we know.”
He said that many production companies feared that if the NDP were elected, the provincial tax incentives to the film industry would disappear.
“By that stability on the political front, that helped to restabilize the industry in B.C.”
Nonetheless, Kaerne said he would still like the province to recognize the film industry as a manufacturer, which he said is an easy fix as it is an administrative exclusion rather than a legislative one.
“The government doesn’t need to put anything through the legislature in order to change that. It needs to be changed as part of their policies and procedures manual.”
Leitch acknowledged that while business has been good for his studios, there is some stiff competition from studios across Canada.
“It’s still a challenging industry and it’s very competitive,” he said. “There are lot of jurisdictions trying to attract the business, so we’ve really got to be competitive from a price perspective.”
Kaerne said there are still efforts within the industry urging the government to grant exemptions from PST, and Leitch agreed that more businesses would have preferred the HST to remain in place. However, Leitch said pushing the government to drop the PST from the film industry hasn’t been a huge concern as of late.
“I think the government’s been very supportive of this industry, and we’ve been very supportive about building the economy in British Columbia,” he said. “We just think that we can play a major role in a strong economy in B.C.
“I think the priority right now is to look at opportunities that we’re facing right now and focus on those.”
