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Page 3 of 3 “Prescribed persons” who are allowed to have an interest in and deduct eligible production amounts include:
Since a direct investment in a production by a non-“prescribed person” may result in a reduction or even elimination of the Federal Content Credit, many producers structure private equity investments as investments in the production company, rather than in the production itself. Instead of receiving an ownership interest in the production, the investor receives shares in the production company. Any profits generated by the production would be paid out to the production company’s shareholders through dividends. Investing in the production company, however, must be undertaken subject to the securities laws of the applicable province, and the rules and regulations of the provincial securities’ regulator.  |
