It's been a while since our last Score G Production blog post, and after the recent interview with David Staples in the Edmonton Journal, it's time to dive a bit deeper.
Like many filmmakers in the Alberta community, the Score G Productions team has been feeling the slowdown in Alberta Film and Television Tax Credit (FTTC) processing and a lack of communication. The new FTTC staff is interpreting the legislation differently than the previous staff, essentially delaying all FTTC tax credit applications by 12-14 months. To put this into perspective: most other tax credit or granting programs – not just in the film industry but across sectors like science, tech, and small business – typically would receive their rebate 6-12 weeks after receiving their final approval certificate, just like we had consistently experienced with numerous Alberta projects for the past 10 years.
While the Edmonton Journal article does a great job of shedding some much-needed light on the issue, there are a few key points I would like to provide more context and detail on.
1 - My chartered professional accountant and I proactively reached out to the Alberta FTTC program before submitting our most recent project's final deliverables. We'd heard whispers about possible changes in legislation and wanted to ensure our paperwork was meticulously dialed in for a speedy tax credit refund – a routine we'd nailed dozens of times before over the past decade. Acting on guidance from a program officer, we meticulously submitted the project's audit and final deliverables to FTTC as per the provided instructions. The FTTC officer assured us with an email confirmation that all our due diligence was on point and that there would be no delay in processing the tax credit. It was only after we filed our application that the FTTC did a 180 on their interpretation of the same legislation, contradicting the guidance provided by their previous officer. This error on the FTTC's part is admitted to in the letter we finally received yesterday from Deputy Minister Sylvia Lepki (letter below).
2 - Responding to David Staples' inquiry, press Secretary Andre Smith of the Economic Development Ministry highlighted, "The timing of the tax claim is dependent on the production’s filing with the film and television tax credit program." While this advice aligns with our approach, it is now abundantly clear the FTTC officer my CPA and I consulted provided us with inaccurate information.
3 - The crux of the issue lies within the current submission process of the final deliverables and interpretation of subsection 6(4)(b) of the Alberta Films and Television Tax Credit Act. "On receipt of the information required by subsection (b) the amount of the tax credit that may be claimed by the corporation in the taxation year in which the date of receipt falls". The problem is, that the current way the FTTC is interpreting this section of the legislation pushes payment for every single FTTC project/application back by 12-14 months, and into the next taxation year because when you submit your final deliverables to the FTTC, the subsequent review process by the FTTC and minister takes 6-12 weeks. Consequently, the production is compelled to file another year-end for the following year, leading to a delayed tax credit payment by 12-14 months. In stark contrast, Score G Productions, under the same legislation and submission process, but under a different interpretation of the exact same legislation enjoyed a swift process with our two prior productions — Breaking Olympia: The Phil Heath Story and Thunder: The Life & Death of Arturo Gatti. Both received their tax credit payments just 4 weeks after obtaining their Alberta tax credit certificates, aligning with the established practice in Alberta for the past decade and echoing the procedures in neighbouring provinces (also referenced in the deputy minister letter attached).
The current interpretation of the legislation runs counter to the government's promotion of Alberta as a film-friendly province actively seeking to attract more projects. In the primary production hubs of BC and Ontario, producers can typically anticipate receiving their tax credits within a reasonable 6-12 weeks after filing. This disparity not only places an unwarranted financial strain on Alberta producers through extended and high-interest payments but also hampers the undertaking of new productions. The inability to secure new loans until current ones are settled results in a more expensive and prolonged production pipeline, especially when compared to our film-friendly neighbors.
Frustrated by the lack of response to my numerous requests for a face-to-face meeting with the FTTC staff and the Minister to address this issue, I reached out to David Staples and the Edmonton Journal. Despite receiving a letter from the deputy minister acknowledging the mistakes and errors by the FTTC staff (see letter above), any opportunity for myself and my CPA to meet with the minister for resolution was denied. This denial not only affects our specific project but also hinders the chance to find solutions that would prevent other filmmakers from encountering similar challenges and financial burdens. No one in our sector, or any other, should be subjected to these additional costs and bureaucratic red tape. For any company bringing money to Alberta, employing Albertans, and creating jobs, the process of receiving the intended tax incentive for bringing value to the province should be as seamless as possible to attract and incentivize more productions to choose Alberta and spend that money here over other competing provinces.
Every $1 million of production activity in the screen-based production sector creates about 13 Alberta jobs.
Every $1 million of government investment under the Film and Television Tax Credit program is expected to support about 85 Alberta jobs.
I take great pride in calling Edmonton, Alberta, my home, and the place where I raise my kids and produce world-class, award-winning projects. It deeply saddens and disappoints me that the current Alberta Film and Television Tax Credit (FTTC) staff is hiding behind their new interpretation of the legislation, hindering open communication. Instead of addressing these bureaucratic delays, they could benefit from engaging in a direct, in-person discussion to find constructive solutions. This approach would align with their program goals of fostering the growth of the film sector and attracting more projects to Alberta.
I am optimistic that my CPA and I can coordinate a face-to-face meeting with the FTTC and the minister sooner rather than later. Such a meeting would not only benefit my team's project but also assist all businesses and creators aiming to collaborate with the Alberta Film and Television Tax Credit program.