Will the U.S. fiscal-cliff legislation whack the B.C. film industry?
The Washington Post's Wonk Blog lists the 10 weirdest parts of the fiscal-cliff bill.
Number 8 mentions big deductions for Hollywood studios that make movies in the United States.
The fiscal cliff bill renews “special expensing rules for certain film and television productions,” at a cost of some $75 million per year. Studios in Hollywood and elsewhere can deduct up to $15 million of their costs if more than three-fourths of the movie’s production takes place in the United States. (They can get up to $20 million in deductions if they produce the film in a low-income community.)
This is terrible news for B.C.'s film industry, which is already under pressure from a higher Canadian dollar and the looming loss of the harmonized sales tax.
According to the provincial government, the B.C. film industry employs 20,000 people directly and supports another 15,000 indirect jobs.
B.C. is the fourth-largest production centre in North America, with nearly $1.2 billion spent making movies and television shows in 2011.
It's probably no coincidence that during the recent U.S. presidential election, Barack Obama received huge financial support from Hollywood glitterati.
According to a Forbes article, Dreamworks boss Jeffrey Katzenberg contributed $2 million. Meanwhile, producer Harvey Weinstein kicked in $500,000 and director Steven Spielberg donated $100,000 to the Obama campaign.