Tax Credit Changes Positively Impact Film and Television Production in Ontario

The Welcome to Ontario sign says “Open for business”—and that’s certainly true in the entertainment world. Offering ample location diversity, healthy infrastructure, and access to abundant big-city resources, Ontario has made a name for itself as a longstanding production hub. Recent changes have modernized Ontario’s cultural media tax credits by reducing red tape and expanding the reach of the programs, further adding to the appeal.

As Entertainment Partners’ VP of Tax Incentives, I’ve spent nearly two decades supporting Canadian and Ontario-bound productions. 

In this post, I’ll share:

• An inside look at Ontario’s production landscape
• How production tax incentives have evolved over the years 
• Some of the many unique benefits available to producers

Read on to learn what makes Ontario a standout filming location—and why it’s poised for continued growth.

Ontario film industry: A wide-angle view

Ontario hosts more than four hundred film and TV productions every year. A broad spectrum of projects—from crime dramas to documentaries to holiday-themed rom-coms—are filming in the area at any given time. 

The province has built a hearty production ecosystem by continually investing in people and physical infrastructure and focusing on enhancements that feed industry growth. For example, Ontario currently has 3.85 million square feet of stage space, with an additional 1.6 million square feet scheduled to be completed over the next few years. 

Ontario is also dedicated to supporting the future of production by training the next generation of great talent. The Director’s Guild of Canada (DGC) Ontario partnered with EP to create a production accountant training program designed to fill a major skill gap. Together, these organizations have delivered countless hours of training and offered valuable mentoring opportunities for production accounting staff to take on more senior key accountant roles.

Cinespace Fim Studios also launched two substantial training programs in recent years. The first is a production accounting micro-credential program with York University. Second is the CineCares Workforce Training Program, a below-the-line focused program created in partnership with IATSE 873, NABET 700, and York University that offers training and job placement opportunities for new graduates at Cinespace’s studio locations.

Taking the initiative to lay the groundwork really paid off in 2022 when Ontario broke film and television industry records by generating $3.1 billion in direct spend. That same year, Toronto set a record by employing more than 35,000 people and generating $2.6 billion in direct spend. 

Things changed a bit in 2023 when actors’ and writers’ guild strikes resulted in a drop off in overall production volume. When direct spending fell to $1.8 billion, Neil Lumsden, Ontario's Minister of Tourism, Culture, and Sport, said he was disappointed but not discouraged. He explained that seeing how Toronto responded when things got tough made him even more confident in the jurisdiction's profitable future. EP has been supporting Canadian productions for 40 years; I've personally been involved for nearly 20 years—and we're in strong agreement. 

Much of the driving force behind the province’s unshakeable commitment to the industry comes from strong government and public support. Ontario Premier Doug Ford has been cited as having a target of $5 billion in production spend and plans to spend over $906 million on cultural and media tax credits and invest $6 million towards the film industry in Northern Ontario. Put simply, there’s lots to be optimistic about and a solid foundation to build upon.

Now, let’s look at how Ontario’s production incentives and recent program enhancements fit into the mix.

The evolution of Ontario’s tax incentive programs

Producers filming in Ontario can take advantage of refundable tax credits, issued to cover eligible expenditures incurred within the province. There are no per-project or annual corporate tax credit caps, and the programs are embedded into legislation with no sunset or end-date clauses. 

Over the years, changes in legislation have increased the scope of Ontario’s tax incentive programs. Most notably, in 2009, the Ontario Production Services Tax Credit (OPSTC) transitioned from a labor-based to a spend-based program, making it even more attractive to both domestic and foreign productions. 

In 2022, Ontario announced program changes designed to reduce red tape and allow more productions to take advantage of incentive benefits.

Ontario’s 2022 Budget changes introduced: 

• Eligibility for productions released exclusively online to use film and television tax credits 
• Better transparency into which productions are receiving tax credits with the introduction of a screen credit requirement
• An expansion of eligible expenditures to include fees for on-location filming (e.g., in private homes, restaurants, stores, etc.) instead of limiting it to studio space

These adjustments are part of a broader strategy to position Ontario as an attractive landing spot for productions in the face of increasing competition from other jurisdictions and reflect the growing importance of new formats in modern storytelling.  

More recently, Ontario’s 2024 Budget announced a change to the Ontario Computer Animation and Special Effects(OCASE) tax credit which untethered it from the other credits. This move simplifies credit eligibility and helps companies get their tax credits faster.

Niche benefits offer producers yet more reasons to film in Ontario, including:  

• Ontario producers using the province’s incentive program for the first time take advantage of a one-time enhanced credit and get more money back on qualified spend. Thanks to minimal eligibility criteria, tax credits can apply to a wide variety of projects.
• Ontario-based producers shooting outside the Greater Toronto Area can also benefit from a regional bonus, which adds a further 10% tax credit to all Ontario labour expenditures incurred for production.
• Animation and Visual Effects (VFX)-heavy projects benefit from generous VFX, animation, and post-production incentives, as well as access to top talent and cutting-edge technologies provided by the many award-winning visual effects shops and animation companies that call Ontario home. In some instances, producers can apply incentives by using Ontario-based talent and resources, even if they’re not physically present in Canada.

Given last year’s production slowdown, the benefits of all these positive changes have yet to be fully realized—but as the TIFF 2024 kicks off, Ontario is once again in the spotlight, showcasing its many attributes to the global production community. 

Beyond incentives, there’s more to explore. 

Big picture benefits of filming in Ontario

When debating where to film a project, producers have a lot to consider. Ultimately, they aim to strike a balance between affordability and having access to critical production resources—and Ontario offers multiple locations where both conditions are met. Situated just north or west of production hotspot, Toronto, are well-outfitted hubs in Hamilton, Ottawa, and Sudbury. 

Producers also have access to:

• A diverse talent pool: Diversity and inclusion are a priority for both above and below-the-line roles. Support from community recruiting partners at the Indigenous Screen Office and BIPOC TV & Film has empowered a more diverse talent pool to receive training and paid work placement opportunities at Cinespace’s studio locations.
• Lower labor costs: International producers often compare locations to determine where in the world their dollar will stretch the furthest. Canada is typically a great option because labor rates tend to be lower, and the exchange rates are typically more favorable than those seen in the United States or United Kingdom. 
• Sustainability resources: The Ontario Green Screen Initiative is run by a partnership of twenty-seven industry and government partners. These organizations work together to help productions protect the earth by driving critical green initiatives forward. 

Personally, one of my favorite things about supporting productions in Ontario is the local commitment to collaboration. There’s a real unity among local industry stakeholder groups like FilmOntario and the Computer Animation Studios of Ontario (CASO)—which helps producers feel welcomed and well-supported.

Get the most out of Ontario’s tax incentives with EP’s help

It’s clear that Ontario has a lot to offer—but it’s easy to leave money on the table. EP’s incentive experts are here to help you navigate nuanced programs and maximize your budget. We offer guidance on the best incentives to apply for and take care of all the legal, financial, and administrative tasks involved along the way, providing a truly seamless experience. Learn more about EP’s production incentive services.

This article contains general information we are providing on a subject that may be of interest to you. Nothing in this article should be considered tax, accounting, or legal advice. You should consult with your own advisors regarding the applicability of this information to your specific circumstances.