Canada Media Fund chides Diana Whalen for tax credit cut 'misinformation'

The president of the Canada Media Fund has written to Nova Scotia's finance minister to "correct some misinformation" being used to justify a cut to the Nova Scotia film industry tax credit.

In the provincial budget presented earlier this month, Diana Whalen revealed the plan to reduce the film tax credit by about 75 percent of its current value, starting in July.

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Since then, there's been much confusion and debate around numbers being used by government and by people who work in film, television and digital media to either defend or criticize that decision. 

One of the numbers that's been tossed around is $122 million — the amount the Canadian Media Production Association says film and TV productions in Nova Scotia generated in 2013-2014.

Incorrect assumption, says Creighton

It's a dollar figure Valerie Creighton, the president and CEO of the Canada Media Fund, brought up in her letter to Whalen.

The Canada Media Fund is a not-for-profit corporation that invests about $375 million in Canada's TV and digital media industries each year. Over the past five years, it has supported 74 projects based in Nova Scotia. 

"Your contention that not all $122 million of Nova Scotia film and television production volume can be attributed to the film industry tax credit as 'it includes the value of funding from the Canada Media Fund which would be made in the province without a tax credit being in place' is incorrect," Creighton wrote in a letter to Whalen.

Creighton said she thinks the assumption inherent in that statement is that even if the Nova Scotia film tax credit is reduced, the money from the Canada Media Fund would still come into the province.

"The problem with that assumption is, it doesn't really describe how financing works," she told CBC's Mainstreet.

"What happens with the Canada Media Fund is we require a fully financed structure from a producer before they can even apply to us."

'Not in the business of filling the hole'

That structure normally includes provincial investment, provincial tax credits, a broadcast licence, federal tax credits and sometimes a minimum guarantee or distribution advance against projected sale revenue nationally or internationally.

Once all of that financing is in place, the Canada Media Fund will decide whether to invest in the project or not.

"It's not the case that our money would still flow to Nova Scotia without that investment. The producer would have to make up that gap," said Creighton.

"What we've seen across the country — especially in other provinces where tax credit programs were eliminated or reduced — is there just is no other source of financing."

In her letter to the finance minister, Creighton wrote that given that the maximum allowable Canada Media Fund contribution to projects is 49 per cent, it is evident that the alteration of the film industry tax credit "would cripple financing for Nova Scotia based projects" and the Canada Media Fund would not be in a position to mitigate that loss. 

"We're not in the business of filling the hole of provincial financing," Creighton said.

"We're in the business of partnering with all provinces and territories across Canada, our broadcast sector, our distribution sector, to make sure these great Canadian stories can get made and be distributed not just throughout Canada, but around the world."

New mechanism needed

At a rally last week, Cathy Jones of This Hour Has 22 Minutes praised the Nova Scotia screen industry for telling Nova Scotia stories. 

"This film industry is massive and beautiful and to mess with it is a major mistake," Jones said.

Creighton suggested if the Nova Scotia government wants to retain that storytelling environment, the province should think of another type of mechanism other than the tax credit that is "more palatable."

"I hope a way will be found to make sure that those Nova Scotia stories and compelling content can continue to be made there and shared with Canada and the rest of the world," she said.