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Axed film tax credit cost taxpayers less than gov't estimated: study
Published Tuesday, October 30, 2012 2:23PM CST
Last Updated Tuesday, October 30, 2012 4:43PM CST
A new study suggests that the Saskatchewan film tax credit that was cut earlier this year cost taxpayers a lot less than the government had estimated.
The study, commissioned by SaskFilm and the Saskatchewan Chamber of Commerce, says the credit had a net cost of $1.3 million a year – a far cry from the government’s estimate of $3 million to $8 million annually.
It says projects that were approved for the credit generated $6.5 million in tax revenue for the province, while the government’s contribution averaged about $7.7 million.
Saskatchewan Chamber CEO Steve McLellan says the process the province used to cut the program had many flaws.
“Key facts were missing and no consultations were done before the announcement of what some thought would be a simple program cut,” McLellan said in a release.
“This decision represents a substantial lack of sector-specific knowledge and policy transparency on the part of the provincial government.”
Saskatchewan Culture Minister Kevin Doherty says the funding model was not sustainable because it cost taxpayers money.
Doherty says there could be economic activity with any tax credit that gives what he calls "preferential treatment."
He also disputes the chamber's numbers and says the cost to taxpayers is actually higher.
But he could not immediately provide a figure to back up his point.
The study surveyed film sector businesses to determine their full financials and used an economic model created by the culture ministry to determine the net cost of the credit.
SaskFilm CEO Susanne Bell says the study should prove to be a useful model as the government continues consultations on enhancing all sectors of the province’s creative industries.
With files from The Canadian Press