In addition to introducing several new investment measures, the 2021-2022 federal budget confirms certain commitments disclosed in the fall Economic Statement. It already provided for commitments of over $180 million. The measures announced as part of the federal budget provide support for a number of organizations, including Telefilm Canada and the Canada Media Fund:
- An amount of $105M over three years to Telefilm Canada to modernize its current suite of programs. It will have to offer better access to a diverse range of creators and producers, support environmentally-friendly practices and respond to the increase in digitization in the audiovisual industry;
- 60M over three years to the Canada Media Fund to increase support for productions directed by people from equity-seeking groups working in the Canadian audiovisual industry;
- 21 million in immediate operational support for CBC/Radio-Canada;
- Confirmation of the extension of the Compensation Fund until 2021-2022, as well as the total funding amount of $100 million;
- An amount of $300M over two years would be dedicated to Canadian Heritage to set up a stimulus fund. Target sectors: arts, culture, heritage and sports;
- Canadian Heritage receives $49.6 million over three years for its Community Development program through Arts and Heritage ($14 million over two years, starting in 2022-2023), the Canada Arts Presentation Fund ($16 million over two years, starting in 2022-2023) and the Celebration and Commemoration Program ($19.6 million over three years, starting in 2021-2022);
- Canadian Heritage receives $70 million over three years for the Canada Music Fund. This includes up to $50 million in 2021-2022 to help the live music sector, such as concert halls;
- 15M to Canadian Heritage for the Canada Cultural Spaces Fund. The funds will be used to modernize the facilities;
- 17.2 million for the National Arts Centre to support artists and celebrate Canadian culture;
- 6 million over two years to the National Arts Centre to support the revitalization of the performing arts sector;
- Canadian Heritage receives $39.3 million over two years to support the Canadian book industry. This includes $32.1 million over two years to help bookstores increase their online sales.
Taxes on digital services
In addition to these economic measures, the federal government is proposing to introduce a 3% tax on digital services. The new tax would apply to revenues from digital services that depend on data and content contributions from Canadian users. The tax would apply in particular to large companies with gross revenues of at least €750m. It would apply from January 1, 2022, until an acceptable multilateral approach replaces it.
TAX MEASURES
In recognition of the disruption to the film and video production industry resulting from the COVID-19 pandemic, the 2021 federal budget proposes to temporarily extend certain administrative deadlines.
Extension of deadlines for the Canadian Film or Video Production Tax Credit (CPTC)
The 2021 federal budget proposes to extend the following deadlines applicable to the CPTC by 12 months:
- The 24-month period for incurring eligible expenses precedes the date of commencement of principal photography;
- The deadline for submitting a certificate of completion to CAVCO is 24 months following the end of the tax year in which the principal photography work began. This new 12-month extension would apply in addition to the current 18-month extension available in this respect;
- The 24-month period following completion of the production in order for the production to be distributed by a Canadian distributor or broadcast by a CRTC-licensed broadcaster in Canada.
Extension of deadlines for the Film or Video Production Services Tax Credit (PSTC)
The 2021 federal budget proposes to extend by 12 months the 24-month deadline relating to when aggregate expenditure thresholds must be met for film or video productions for PSTC purposes.
For CPTC and PSTC, taxpayers would be required to file a waiver with CRA and CAVCO to extend the assessment period for the relevant years to reflect this 12-month extension.
These measures would be available for productions for which eligible expenses were incurred by taxpayers in their tax years ending in 2020 or 2021.
In addition to the deadline-specific measures, and as presented in our budget summary, the 2021 federal budget proposes some additional measures:
Source: Government of Canada.
