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Indirect Federal Funding

Page 2 of 4 Canadian Points Test To be eligible for the Federal Content Credit, the production must earn a minimum of six units of production, or “points,” based on key personnel qualifying as Canadians. In addition, either the director or the screenwriter, and at least one of the highest-paid or second-highest paid actors must be Canadian. The point system for live-action productions is as follows: Director: 2 points Screenwriter: 2 points Highest Paid Actor: 1 point Second Highest Paid Actor: 1 point Art Director: 1 point Director of Photography: 1 point Music Composer: 1 point Picture Editor: 1 point Canadian Expenditure Tests It is not enough for the production to pass the points test. It must also pass the expenditures test. This means: at least 75% of the remuneration for all production costs and services must be paid to Canadians at least 75% of all costs for processing, post-production and final preparation of the production must be incurred for services provided in Canada. Excluded Productions A production will not qualify for the Federal Content Credit if it is an “excluded production” or if it fails to meet certain ownership and distribution criteria. For the purposes of feature films intended for theatrical release, excluded productions include pornography; industrial, corporate and institutional productions; productions (other than documentaries) that primarily consist of stock footage; and productions contrary to public policy. A production will also be excluded from eligibility for the Federal Content Credit unless all of the following requirements are met: The production is completed within two years from the end of the qualified corporation‘s taxation year, and a Certificate of Completion (described below) has been issued by the Minister of Canadian Heritage within 30 months of the end of the corporation’s taxation year. There is a written agreement with a Canadian distributor or broadcaster to show the production in Canada within two years of the time it is commercially available. No non-Canadians will distribute the production in Canada within such a two-year period. The exclusive worldwide copyright is held by the Canadian qualified corporation for a minimum of 25 years. The Canadian qualified corporation controls the initial licensing. The Canadian qualified corporation retains an acceptable share of revenues from non-Canadian markets. Continued... << Previous Page - Next Page >>

 

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