Alberta Film and Television Tax Credit: A Comprehensive Guide

The Alberta Film and Television Tax Credit has emerged as a game-changer for the province’s screen-based production industry. This refundable tax credit program has sparked a revolution in Alberta’s cultural landscape, offering substantial financial incentives to eligible corporations engaged in film, television, and digital media projects. By providing support for production costs and labor expenses, the tax credit has become a cornerstone of Alberta’s strategy to attract and nurture talent, fostering a thriving ecosystem for creative professionals and production companies alike.

This comprehensive guide delves into the intricacies of the Alberta Film and Television Tax Credit, shedding light on its key components and benefits. Readers will gain insights into the eligibility criteria for corporations, production requirements, tax credit rates, and additional criteria that shape the program. The guide also explores eligible production costs, walks through the application process, and outlines post-application procedures. By the end, industry professionals and stakeholders will have a clear understanding of how to leverage this powerful tool to boost their projects and contribute to the growth of Alberta’s vibrant film and television sector.

Overview of the Alberta Film and Television Tax Credit

The Alberta Film and Television Tax Credit (FTTC) program has been designed to boost the growth, sustainability, competitiveness, and business attraction in Alberta’s film and television industry. This program offers substantial financial support to medium and large-scale productions filming in the province, providing a refundable Alberta tax credit on eligible production costs.

Purpose of the Tax Credit

The FTTC aims to encourage the development of Alberta’s screen-based production industry by offering financial incentives to eligible corporations. These incentives are designed to attract productions to the province, foster local talent, and stimulate economic growth within the sector. By providing support for production costs and labor expenses, the tax credit has become an essential tool for nurturing a thriving ecosystem of creative professionals and production companies in Alberta.

Eligible Productions

The FTTC program encompasses a wide range of eligible screen-based productions, including:

1. Feature films
2. Television series
3. Documentaries
4. Animation projects
5. Commercials
6. Game shows
7. Pilots
8. Reality television
9. Scripted television
10. Talk shows
11. Video games

To qualify for the tax credit, productions must meet specific criteria:

• Have total production costs of at least CAD 693,998.70 (excluding GST)
• Be a new production
• Complete a portion of principal photography or key animation in Alberta
• Apply to the FTTC program no more than 120 days after commencing principal photography in Alberta

Tax Credit Rates

The FTTC program offers two tax credit rates: 22% and 30%. Applicants can choose to apply for either rate based on their eligibility and production characteristics.

22% Tax Credit Rate

To be eligible for the 22% tax credit rate, productions must meet the basic eligibility requirements mentioned above.

30% Tax Credit Rate

For the higher 30% tax credit rate, productions must fulfill additional criteria:

1. The eligible corporation must be at least 50% owned by Alberta-based shareholders
2. The production must have at least one Alberta-based producer with a single card credit recognition
3. The production’s copyright must be held, at least in part, by an Alberta-based individual, partnership, or corporation
4. At least 60% of the total production costs must be eligible production costs, or at least 70% of the total labor costs must consist of eligible Alberta salary or wages

Special considerations are made for inter-provincial co-productions and international treaty co-productions. International treaty co-productions may be eligible for the 30% tax credit rate if they meet the basic eligibility criteria and have an Alberta-based producer with single card credit recognition, along with meeting the spending requirements.

Additionally, productions can qualify for the 30% tax credit rate for rural and remote filming if they complete at least 75% of Alberta principal photography days in rural or remote locations, in addition to meeting the basic eligibility criteria.

The Alberta Film and Television Tax Credit program represents a significant opportunity for production companies to leverage financial support while contributing to the growth of Alberta’s vibrant film and television sector. By offering competitive tax credit rates and accommodating a diverse range of productions, the FTTC program has positioned itself as a key driver in attracting and nurturing talent within the province’s screen-based production industry.

Eligibility Criteria for Corporations

The Alberta Film and Television Tax Credit (FTTC) program has established specific eligibility criteria for corporations seeking to benefit from this financial incentive. These criteria ensure that the tax credit supports businesses genuinely engaged in the film and television industry while promoting economic growth in Alberta. To qualify for the FTTC, corporations must meet several key requirements across different areas.

Primary Business Requirements

To be eligible for the FTTC, a corporation must be primarily engaged in film, television, and/or digital media production. This requirement ensures that the tax credit benefits companies whose core business aligns with the goals of the program. The focus on these specific industries helps to foster a thriving ecosystem of creative professionals and production companies within Alberta.

Incorporation and Registration

Corporations seeking to take advantage of the FTTC must meet one of the following incorporation or registration criteria:

1. Be incorporated in Alberta under the Business Corporations Act
2. Be registered as an extra-provincial company in Alberta
3. Be continued as an Alberta company through a Certificate of Continuance

These requirements ensure that eligible corporations have a significant presence in Alberta, contributing to the local economy and fostering the growth of the province’s film and television industry.

Tax Status and Previous Funding

To qualify for the FTTC, corporations must adhere to specific tax and funding criteria:

1. Tax Status: The corporation must not be exempt from paying taxes under the Alberta Corporate Tax Act. Additionally, it must not be controlled by a corporation that is exempt from paying these taxes. This requirement ensures that the tax credit benefits companies that contribute to Alberta’s tax base.
2. Previous Funding: Eligible corporations must not have received project funding from either the Alberta Production Grant or the Alberta Screen-Based Production Grant. This criterion prevents double-dipping and ensures a fair distribution of financial support across different programs.

Production Cost Requirements

In addition to the corporate eligibility criteria, the FTTC program also has specific requirements related to production costs:

1. Minimum Budget: The corporation must be making an eligible production with total production costs of CAD 693,998.70 or greater. This threshold ensures that the tax credit supports medium to large-scale productions that have a significant economic impact on the province.
2. Balanced Bottom Line: The FTTC program is designed to help productions achieve a balanced bottom line, offering support for various phases of film production. By providing tax credits of up to 30% on production and labor costs, the program aims to make Alberta an attractive destination for film and television projects.

Additional Support

While not directly related to eligibility criteria, it’s worth noting that Alberta offers additional support to the film and television industry:

1. Alberta Media Fund: This multi-faceted fund provides grants that cover the costs of different phases of film production, supporting the growth and sustainability of Alberta’s film industry.
2. Financial Institution Support: Alberta’s financial institutions offer interim financing to cover the costs of equipment, locations, cast, and crew before production begins, further enhancing the province’s appeal as a filming destination.

By meeting these eligibility criteria, corporations can access the benefits of the Alberta Film and Television Tax Credit, contributing to the growth of Alberta’s vibrant screen-based production industry while enjoying significant financial incentives.

Production Requirements

The Alberta Film and Television Tax Credit (FTTC) program has established specific production requirements to ensure that eligible projects contribute significantly to the province’s film and television industry. These requirements cover various aspects of production, including minimum costs, project originality, and timelines for principal photography.

Minimum Production Costs

To qualify for the FTTC program, productions must meet a minimum budget threshold. The total production costs must be at least CAD 693,998.70, excluding Goods and Services Tax (GST). This requirement ensures that the tax credit supports medium to large-scale productions that have a substantial economic impact on Alberta’s film and television sector.

The minimum spend requirement applies to all eligible productions, regardless of the tax credit rate they are seeking. This threshold helps to attract productions with significant budgets, fostering growth and investment in the local industry. By setting this minimum, the FTTC program aims to support projects that can make a meaningful contribution to Alberta’s creative economy.

New Production Stipulations

The FTTC program is designed to encourage the creation of original content and foster innovation in the film and television industry. As such, it has specific stipulations regarding the eligibility of productions:

1. New Productions: Only new productions are eligible for the tax credit. This requirement ensures that the program supports fresh, innovative content that contributes to the growth and diversity of Alberta’s screen-based production industry.
2. Repackaging Prohibition: The FTTC program explicitly prohibits the repackaging of previously completed productions. Any attempt to present an existing production as new will result in the project being deemed ineligible for the tax credit.

These stipulations serve to promote creativity and originality within the industry, encouraging production companies to develop new ideas and concepts rather than relying on existing material.

Principal Photography Timelines

The FTTC program has established specific timelines for principal photography to ensure that productions move forward in a timely manner and contribute to the local economy within a reasonable timeframe. These timelines are crucial for both the application process and the commencement of production activities:

1. Application Window: Productions can apply to the FTTC program up to 120 days after commencing principal photography in Alberta. This extended application window provides flexibility for productions that may have already begun filming before applying for the tax credit.
2. Authorization Letter and Production Start: Once an applicant receives an Authorization Letter, they must begin principal photography on the production no later than 6 months after the date of issuance. This requirement ensures that projects move forward promptly after receiving approval for the tax credit.
3. Completion Timeline: The production must be completed, and final deliverables provided to the program, within 42 months of the date of issuance of the Authorization Letter. This timeline is outlined in the Authorization Letter and helps to ensure that projects are completed within a reasonable timeframe.
4. Pre-June 7, 2024 Productions: It’s important to note that productions that started Alberta principal photography prior to June 7, 2024, are not eligible for the expanded 120-day application window.

These timelines are designed to balance flexibility for production companies with the need for timely completion of projects. By adhering to these requirements, productions can ensure their eligibility for the Alberta Film and Television Tax Credit while contributing to the growth and sustainability of the province’s film and television industry.

Tax Credit Rates and Additional Criteria

The Alberta Film and Television Tax Credit (FTTC) program offers two distinct tax credit rates: 22% and 30%. These rates are designed to provide substantial financial incentives to eligible productions, with additional criteria in place for those seeking the higher rate. The program also includes special provisions for rural and remote filming to encourage production activities outside major urban centers.

22% Tax Credit Rate Requirements

To qualify for the 22% tax credit rate, productions must meet several fundamental criteria:

1. Total production costs must be at least CAD 693,998.70 (excluding GST).
2. The production must be new, with repackaging of previously completed productions not eligible.
3. A portion of principal photography or key animation must be completed in Alberta.
4. Applications must be submitted no more than 120 days after commencing principal photography in Alberta. (Note: Productions that started Alberta principal photography before June 7, 2024, are not eligible for this expanded application window.)
5. If principal photography has not started at the time of Authorization Letter issuance, it must begin within 6 months of the letter’s date.

Additionally, the corporation must:

• Be primarily engaged in film, television, and/or digital media production.
• Be incorporated in Alberta, registered as an extra-provincial company, or continued as an Alberta company through a Certificate of Continuance.
• Not be exempt from paying taxes under the Alberta Corporate Tax Act.
• Have not received funding from the Alberta Production Grant or the Alberta Screen-Based Production Grant for the project.
• Have a valid commercial distribution plan for the final project.
• Have secured at least 50% of its production financing at the time of application.

30% Tax Credit Rate Requirements

To be eligible for the higher 30% tax credit rate, productions must meet all the criteria for the 22% rate and fulfill additional requirements:

1. The eligible corporation must be at least 50% owned by Alberta-based shareholders.
2. The production must have at least one Alberta-based producer with a single card credit recognition. (Multiple Alberta-based producers may share a credit.)
3. The production’s copyright must be held, at least in part, by an Alberta-based individual, partnership, or corporation at the time of application and for a minimum of 10 years following production completion.
4. The production must meet one of the following spending criteria:
   • At least 60% of the total production costs must be eligible production costs, OR
   • At least 70% of the total labor costs must consist of eligible Alberta salary or wages.

Rural and Remote Filming Incentives

The FTTC program offers an additional incentive for productions filming in rural and remote locations. To qualify for the 30% tax credit rate under this provision:

1. Productions must meet all the criteria for the 22% tax credit rate.
2. At least 75% of Alberta principal photography days must be completed in rural or remote location(s).

The program defines rural and remote areas as underutilized locations outside of Edmonton and Calgary. A detailed “Map of Rural and Remote Filming Locations” is provided in the Program Guidelines to clarify the boundaries of eligible areas.

It’s worth noting that international treaty co-productions may also be eligible for the 30% tax credit rate if they meet specific criteria. These include having at least one Alberta-based producer with a single card credit recognition and meeting the same spending requirements as other 30% rate applicants.

By offering these varied tax credit rates and additional criteria, the Alberta Film and Television Tax Credit program aims to foster a diverse and thriving film and television industry throughout the province. These incentives not only attract large-scale productions but also encourage the development of local talent and the utilization of Alberta’s varied landscapes for filming purposes.

Eligible Production Costs

The Alberta Film and Television Tax Credit (FTTC) program has established specific criteria for eligible production costs. These costs play a crucial role in determining the tax credit amount for qualifying productions. To be considered eligible, expenses must meet several key requirements and fall within specific categories.

Alberta-based expenditures

Eligible Alberta production costs generally include all expenditures where goods or services are purchased, consumed, or used in Alberta. These costs must be considered essential and incurred as a normal part of business. To qualify as an eligible Alberta production cost, items must meet the following criteria:

1. Be listed on the Estimated Total Production Costs worksheet found on the program webpage
2. Be purchased directly from businesses located in Alberta
3. Be incurred and fully paid in Alberta during the eligibility period
4. Be directly related to the portion of the production that occurs in Alberta
5. Be considered an essential cost incurred as a normal part of business

It’s important to note that production costs incurred or paid outside of Alberta are not eligible for the tax credit. This requirement ensures that the program benefits the local economy and supports Alberta-based businesses.

Salary and wage considerations

For salary or wage costs to be considered eligible, they must meet specific criteria:

1. Be listed on the Estimated Total Production Costs worksheet
2. Be incurred in Alberta and paid in full during the eligibility period
3. Be directly related to the portion of the production that occurs in Alberta
4. Be paid by the eligible corporation to employees who completed the work in Alberta and meet the definition of Alberta-based

The program also allows for costs associated with service contractors or employees of service contractors engaged by the applicant, provided they meet the above criteria. These contractors may be referred to as “loan out companies” in the industry.

Related party transactions

Related party transactions, which take place between two parties with an existing relationship prior to the transaction, may be included as eligible Alberta expenses. However, these transactions are subject to specific requirements:

1. They must be listed on the Related Party Transactions form found on the program webpage
2. They must be identified at the time of application and when requesting a tax credit certificate
3. They must be in the normal course of operations of the provider
4. They must have commercial substance

Two categories of related party transactions are considered eligible Alberta expenses:

1. Related party salary or wages: These costs must correspond to the actual amount paid to the individual and be in accordance with the employment or engagement contract signed with the employer.
2. Goods and services supplied by related parties: These may be accounted for at the exchange amount up to a maximum of fair market value.

It’s worth noting that FTTC program staff reserve the right to revise the calculation and eligibility of related party transaction costs if they are considered unreasonable or misrepresented. Applicants granted approval for related party costs must be able to demonstrate the appropriateness of the amount and that the cost was incurred.

By adhering to these guidelines for eligible production costs, the Alberta Film and Television Tax Credit program aims to support the local film and television industry while ensuring that tax credits are allocated fairly and effectively.

Application Process

The Alberta Film and Television Tax Credit (FTTC) program has a streamlined application process that requires careful attention to detail. Applicants must follow specific steps to ensure their submissions are complete and meet all necessary criteria.

Creating an Account

To begin the application process, applicants need to create an account through the online application portal. This can be done by accessing the portal via the FTTC webpage or directly at https://funding.alberta.ca/. New users will be prompted to create an Alberta.ca account with a secure login name and password. For those who already have an account, they can simply sign in using their existing credentials.

If applicants encounter difficulties with their Alberta.ca Account, they have several options:

1. Contact the Alberta.ca Account team at 1-844-643-2789 or alberta-ca.account@gov.ab.ca
2. Fill out the online form at https://www.alberta.ca/alberta-ca-account-contact.aspx
3. Use the “Forgot your username or password?” link on the login page for account recovery

After creating or accessing an account, users will be taken to the main Application page, where they can view all submitted applications under “My Applications” and apply for multiple programs from the dashboard.

Submitting the Application

To submit an application for the FTTC program, applicants should follow these steps:

1. Select “Film and Television Tax Credit (FTTC)” from the program listing on the dashboard.
2. Review the “Program Overview” tab for instructions on completing the application.
3. Fill out the required information on each page, including corporation details and contact information.
4. Add any additional contacts who may be involved in the application process.
5. Upload all required attachments, ensuring that mandatory fields are completed.
6. Have the Authorized Signing Officer sign the disclosure form and provide consent for information use.
7. Certify the application by checking the appropriate box.
8. Review the Freedom of Information and Protection of Privacy (FOIP) Statement.
9. Submit the completed application form.

It’s important to note that applicants must notify the program area of any changes to the production within 30 days of the change.

Required Documentation

The FTTC program requires comprehensive documentation to support each application. Applicants should prepare the following materials before beginning the submission process:

1. Corporate documentation (e.g., Articles of Incorporation, capitalization table)
2. Detailed Production Plan, including:
   • Production overview
   • Estimated economic impact on Alberta’s film and television industry
   • Completed Estimated Total Production Costs worksheet
   • Evidence of financing
   • Estimated designated assistance
3. For productions under the Transitional Provision that have reached “completion of production,” a worksheet with actual costs rather than estimates
4. Any additional documentation requested by program staff during the assessment process

Applicants are encouraged to review the Film and Television Tax Credit Application Companion Guide and the “Required Documents for Applications and Tax Credit Certificate Requests” section of the Program Guidelines before submitting their application. It is the applicant’s responsibility to ensure all relevant documentation is completed as stated in the guidelines and submitted with the application.

Post-Application Procedures

Assessment and Evaluation

Once an application for the Alberta Film and Television Tax Credit (FTTC) is received, program staff conduct a thorough review process. Initially, they assess the application for completeness. If deemed complete, the application moves to the next stage where it undergoes screening for eligibility and evaluation. During this phase, the FTTC program may request additional documentation and information to assist in the assessment process. It’s important to note that the program reserves the right to rely solely on materials initially submitted with the application.

All eligible applications are evaluated based on two primary criteria:

1. The production’s economic impact in Alberta
2. Its benefit to Alberta’s film and television industry

Following this evaluation, applications are reviewed and approved by the Minister. This multi-step process ensures that each application receives careful consideration and aligns with the program’s objectives.

Authorization Letters

Successful applicants receive an Authorization Letter, which serves as a crucial document in the FTTC process. This letter advises applicants of the maximum tax credit amount they may be eligible to receive. It’s important to understand that this is a preliminary tax credit amount and may be subject to change.

For applicants who choose to receive multiple tax credits, the Authorization Letter will list preliminary tax credit amounts for each taxation year, in addition to the total maximum tax credit amount. This breakdown provides clarity on the expected tax credits over the course of the production.

Upon receiving the Authorization Letter, applicants must take prompt action. They are required to respond within 14 days, indicating their acceptance of the letter and providing any additional documentation requested. This quick turnaround ensures that the process moves forward efficiently.

It’s worth noting that if the tax credit certificate amount requested exceeds the available budget, a reduced tax credit certificate amount may be offered. In such cases, program staff will contact applicants to confirm whether they wish to proceed with their application under the revised terms.

Changes in Production Plans

The FTTC program recognizes that film and television productions can be dynamic, with plans subject to change. To accommodate this reality while maintaining program integrity, applicants are required to notify the FTTC program of any changes to their production within 30 days of the change occurring. This notification should include information on why the change was made.

Specific aspects of the Production Plan that require notification include:

• Proposed timeline of the production
• Date on which Alberta principal photography is expected to begin
• Evidence of sufficient financing to enable production completion
• Commercial distribution plan of the final production
• Control of the applicant corporation
• Budget of the portion of the production occurring in Alberta
• Copyright ownership of the production
• Factors affecting the applicant’s ability to meet program requirements

It’s crucial to adhere to this 30-day notification period, as failure to inform the program within the allotted timeframe may result in the revocation of the Authorization Letter. This policy ensures that the program remains informed about significant changes that could impact a production’s eligibility or tax credit amount.

Based on the updated information provided by the applicant, the Minister may issue a revised Authorization Letter. This flexibility allows the program to adapt to changing circumstances while maintaining its integrity and objectives.

Conclusion

The Alberta Film and Television Tax Credit has a significant influence on the province’s screen-based production industry, offering substantial financial incentives to foster growth and innovation. By providing support for production costs and labor expenses, this program has sparked a revolution in Alberta’s cultural landscape, attracting diverse projects and nurturing local talent. The comprehensive eligibility criteria, varied tax credit rates, and additional incentives for rural filming ensure that the program benefits a wide range of productions while contributing to the economic development of the entire province.

As the Alberta film and television sector continues to evolve, the FTTC program stands as a cornerstone in its growth strategy, enabling production companies to bring their creative visions to life. The program’s focus on Alberta-based expenditures and its support for new, original content has positioned the province as an attractive destination for filmmakers and television producers. BOMCAS Canada is your accounting firm in Alberta Canada. When you need support for accounting and tax return in Alberta, contact BOMCAS Canada. To wrap up, the Alberta Film and Television Tax Credit represents a significant opportunity for industry professionals to leverage financial support while contributing to the vibrancy of Alberta’s screen-based production scene.

FAQs