Montreal: Quebec's cultural funding and certification agency SODEC issued $89.8 million in tax credits for 389 Quebec-content productions in fiscal 2000/01, representing cumulative production budgets of $582.3 million. The estimates are based on advanced rulings from SODEC's tax credit office, and are the equivalent of the Part 'A' schedule at CAVCO.

The 2000/01 certification level for content programs is 8% lower than the $97.8 million in refundable production credits issued by SODEC for 373 productions (representing budgets of $655.2 million) in fiscal 1999/00.

"Although the number of files has continued to increase, the overall credit level has basically decreased, which means production budgets have gone down," says SODEC's tax credit director Stephane Cardin.

Cardin says the average certified Quebec production budget has declined in the range of 21% to 23% in the past three years, from $2 million in 1998/99 to $1.8 million in 1999/00 and $1.5 million in 2000/01.

The decline in average production budgets reflects various developments in this market - most fundamentally, a shift in the period from English-track content export production to more local TV production. In the past year, Montreal has seen a reduction in the level of activity, or at least different kinds of production, from companies such as Cinar Corp., Telescene Film Group, Blackwatch Productions and TVA International.

At the same time, says Cardin, the number of tax-certified productions in the less expensive variety and magazine program categories has shown a marked increase. Variety and magazine shows made up 19% of all production tax credit files in 1998/99, or 9% of all tax credits in dollar terms, increasing to 37% last year, or 17.7% in total dollar terms.

In service productions, SODEC issued advanced tax rulings worth $3.9 million for 14 productions in 2000/01 - mostly MOWs - representing $221.3 million in combined budgets. Service producers are eligible for a tax credit equal to 11% of the labor costs paid to Quebec residents.

"Another interesting issue is that most [service] claims are made way after the film is finished," says Cardin. He says last year's service tally is only partial and does not include three theatrical and eight MOW projects, whose information has been submitted but not processed. The measurable practices of service producers indicates tax credits typically are not essential in up-front production financing, representing on average less than 2% of production budgets, adds Cardin.

The Quebec government is currently undertaking a comprehensive review of its cinema and audiovisual production policies.

Five working groups representing content creation, production, broadcasting and distribution, conservation and public education have filed reports with a co-ordinating committee made up of executives from Conseil des Arts et des Lettres du Quebec, the Regie du Cinema, broadcaster Tele-Quebec, SODEC and the Quebec Minister of Culture and Communications.

The reports are expected to set the stage for broader industry consultations this fall by Culture and Communications Minister Diane Lemieux. *

-www.sodec.gouv.qc.ca