A provincial government decision to cut a tax credit for the animation industry has drawn criticism from Okanagan-based studios.
The credit was created in the late 90s to encourage companies and individuals to film elsewhere in the province other than the Lower Mainland.
“What we found in the animation industry was a number of people were using the tax credit because they had employees working from home,” Finance Minister Katrine Conroy told Black Press.
“It wasn’t being utilized the way the credit was intended, so we removed that part of the support for the animation industry.”
A recent Change.org petition, started by Sean Ridgway at the Centre for Arts and Technology in Kelowna, urges Conroy to reconsider.
Ridgway wrote that he understands some studios have capitalized on the credit by claiming remote workers from outside their region as local but argues it unfairly penalizes above-board, Okanagan-based companies.
“They are owned, operated, and staffed by people who live in our neighbourhoods, shop in our stores, contribute, participate, and give back to our community,” Ridgway said.
During Question Period in the Legislature on Wednesday (Apr. 24), Kelowna-Mission MLA Renee Merrifield criticized Conroy for claiming that cutting the credit was needed to close a loophole.
“The government’s evaluation of a supposed loophole was flawed, focusing on bad actors in Vancouver and punishing the bricks-and-mortar studios in the Okanagan who are playing by the rules and were investing in the industry’s growth and success,” Merrifield said.
Ridgway added that the government’s decision ignores significant financial investments studios have made in the Okanagan, and the creative talent that live in the region filling high-paying, skilled positions.
Conroy pointed out that the industry still qualifies for a 51 per cent tax credit from the province.
“When you add in the federal government they qualify for 58 per cent. There isn’t another business in B.C. that can access up to 58 per cent in tax credits towards their payroll.”
A report by industry consultant Brad Dahl states while the regional industry will get the same credits as Vancouver, the change will decimate profitability and kill the Kelowna players in 18 to 24 months.
“Why will Kelowna studios pay the price for the misdeeds of Vancouver studios incorrectly claiming work-from-home staff?” Dhal wrote.
Conroy said she understands why this is an issue for Okanagan creators.
“I’ve gotten input and I will definitely take a look at it.”
~With files from Wolf Depner
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