[38] Bill 166 Original (PDF)
Bill 166 2004
An Act to amend the
Corporations Tax Act
Preamble
As of December 2004, the Ontario film and television industry is in a state of crisis. It needs greater support in order to survive.
The industry employs roughly 50,000 people, the majority of whom reside in the Greater Toronto Area. If the industry does not survive, those jobs will be lost.
The purpose of this Act is to fulfil the promise that the Government elected in 2003 made during the election campaign to support the industry by increasing the tax credits available to the industry.
Therefore, Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:
1. (1) Subclause 43.5 (4) (a) (ii) of the Corporations Tax Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 19 and amended by 2004, chapter 16, section 2, is amended by striking out "and" at the end of sub-subclause (A) and by striking out sub-subclause (B) and substituting the following:
(B) 20 per cent of the amount by which the company's qualifying labour expenditure for the taxation year in respect of the production exceeds the lesser of the amounts determined under sub-subclauses (i) (A) and (B), multiplied by the ratio of the company's Ontario labour expenditure incurred on or after May 7, 1997 and before January 1, 2005 for the taxation year in respect of the production to the company's Ontario labour expenditure for the taxation year in respect of the production, and
(C) 33 per cent of the amount by which the company's qualifying labour expenditure for the taxation year in respect of the production exceeds the lesser of the amounts determined under sub-subclauses (i) (A) and (B), multiplied by the ratio of the company's Ontario labour expenditure incurred on or after January 1, 2005 for the taxation year in respect of the production to the company's Ontario labour expenditure for the taxation year in respect of the production; and
(2) Clause 43.5 (4.1) (b) of the Act, as enacted by the Statutes of Ontario, 1998, chapter 5, section 13 and amended by 2000, chapter 42, section 16 and 2004, chapter 16, section 2, is repealed and the following substituted:
(b) 20 per cent of the amount, if any, by which the company's qualifying labour expenditure for the taxation year for the production, multiplied by the ratio of the company's Ontario labour expenditure incurred before January 1, 2005 for the taxation year in respect of the production to the company's Ontario labour expenditure for the taxation year in respect of the production, exceeds the sum of,
(i) the lesser of the amounts, if any, determined under subclauses (a) (i) and (ii), and
(ii) the company's qualifying labour expenditure, if any, for the production for the previous taxation year;
(b.1) 33 per cent of the amount, if any, by which the company's qualifying labour expenditure for the taxation year for the production, multiplied by the ratio of the company's Ontario labour expenditure incurred on or after January 1, 2005 for the taxation year in respect of the production to the company's Ontario labour expenditure for the taxation year in respect of the production, exceeds the sum of,
(i) the lesser of the amounts, if any, determined under subclauses (a) (i) and (ii), and
(ii) the company's qualifying labour expenditure, if any, for the production for the previous taxation year; and
(3) Clause 43.5 (6) (a) of the Act, as re-enacted by the Statutes of Ontario, 1997, chapter 43, Schedule A, section 19 and amended by 2004, chapter 16, section 2, is amended by striking out "and" at the end of subclause (i) and by striking out subclause (ii) and substituting the following:
(ii) 20 per cent of the amount determined by multiplying the company's qualifying labour expenditure for the taxation year in respect of the production by the ratio of the company's Ontario labour expenditure incurred on or after May 7, 1997 and before January 1, 2005 for the taxation year in respect of the production to the company's total Ontario labour expenditure for the taxation year in respect of the production, and
(iii) 33 per cent of the amount determined by multiplying the company's qualifying labour expenditure for the taxation year in respect of the production by the ratio of the company's Ontario labour expenditure incurred on or after January 1, 2005 for the taxation year in respect of the production to the company's total Ontario labour expenditure for the taxation year in respect of the production;
(4) Subsection 43.5 (6.1) of the Act, as re-enacted by the Statutes of Ontario, 2000, chapter 42, section 16 and amended by 2004, chapter 16, section 2, is repealed and the following substituted:
Same, productions commenced after October 31, 1997
(6.1) Subject to subsection (6.1.1), the eligible credit of a qualifying production company for a taxation year in respect of an eligible Ontario production that is not a first-time production and for which principal photography commences after October 31, 1997 is the sum of,
(a) 20 per cent of the amount by which the company's qualifying labour expenditure for the taxation year in respect of the production, multiplied by the ratio of the company's Ontario labour expenditure incurred before January 1, 2005 for the taxation year in respect of the production to the company's Ontario labour expenditure for the taxation year in respect of the production, exceeds its qualifying labour expenditure, if any, for the production for the previous taxation year; and
(b) 33 per cent of the amount by which the company's qualifying labour expenditure for the taxation year in respect of the production, multiplied by the ratio of the company's Ontario labour expenditure incurred on or after January 1, 2005 for the taxation year in respect of the production to the company's Ontario labour expenditure for the taxation year in respect of the production, exceeds its qualifying labour expenditure, if any, for the production for the previous taxation year.
Same, feature films
(6.1.0.1) Subject to subsection (6.1.1), the eligible credit of a qualifying production company for a taxation year in respect of an eligible Ontario production that is a feature film but that is not a first-time production and for which principal photography commences on or after January 1, 2005 is 40 per cent of the amount by which the company's qualifying labour expenditure for the taxation year in respect of the production, multiplied by the ratio of the company's Ontario labour expenditure incurred on or after January 1, 2005 for the taxation year in respect of the production to the company's Ontario labour expenditure for the taxation year in respect of the production, exceeds its qualifying labour expenditure, if any, for the production for the previous taxation year.
(5) Subsection 43.5 (6.1.1) of the Act, as enacted by the Statutes of Ontario, 2000, chapter 42, section 16 and amended by 2004, chapter 16, section 2, is repealed and the following substituted:
Same, regional Ontario production
(6.1.1) The eligible credit of a qualifying production company for a taxation year that ends after May 2, 2000 in respect of an eligible Ontario production that is a regional Ontario production and that is not a first-time production is the sum of "A", "B" and "C" where,
"A" is 33 per cent of the amount by which the company's qualifying labour expenditure for the taxation year for the production exceeds its qualifying labour expenditure, if any, for the previous taxation year, as determined in relation to expenditures that are incurred on or after January 1, 2005 and included in the Ontario labour expenditure for the taxation year in respect of the production,
"B" is 30 per cent of the amount by which the company's qualifying labour expenditure for the taxation year for the production exceeds its qualifying labour expenditure, if any, for the previous taxation year, as determined in relation to expenditures that are incurred on or after May 3, 2000 and before January 1, 2005 and included in the Ontario labour expenditure for the taxation year in respect of the production, and
"C" is 20 per cent of the amount by which the company's qualifying labour expenditure for the taxation year for the production exceeds its qualifying labour expenditure, if any, for the previous taxation year, as determined in relation to expenditures that are incurred before May 3, 2000 and included in the Ontario labour expenditure for the taxation year in respect of the production.
(6) Subsection 43.5 (19) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 24, section 27 and amended by 1997, chapter 43, Schedule A, section 19, 2000, chapter 42, section 16 and 2004, chapter 16, section 2, is amended by adding the following definition:
"feature film" means an eligible Ontario production that is at least 120 minutes in running time, that is intended for exhibition to the public, that is not a first-time production and that satisfies the other conditions prescribed by the regulations; ("long métrage")
Commencement
2. This Act comes into force on the day it receives Royal Assent.
Short title
3. The short title of this Act is the Corporations Tax Amendment Act, 2004.
EXPLANATORY NOTE
The Bill amends the Corporations Tax Act to increase the amount of the Ontario film and television tax credit for a qualifying production company from 20 per cent to 33 per cent of the company's qualifying labour expenditure. It also expands the tax credit to cover 40 per cent of the company's qualifying labour expenditure in the case of a feature film that is not a first-time production.