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OPSTC Frequently Asked Questions

As of August 2018

*The August 2018 version of the FAQs has been updated to:
- address Public Notices issued by CAVCO in March 2017 on excluded genres and advertising; 
- address the Application Policy on assistance issued by CRA in April 2017; and
- remove references on how to apply for grandfathering or the Transitional Grant as the deadlines have closed. 

Numbering may have changed.

1. Are productions that are only exhibited on online platforms eligible for the OPSTC?

2. Does Ontario follow CAVCO Public Notice 2017-02 which defines ineligible genres and Public Notice 2017-03 which defines advertising for purposes of federal film or video production tax credit programs?

3. Has there been any change to the treatment of talk shows for the purposes of the provincial tax credits?

4. If my qualifying labour expenditures are less than 25% of my Qualifying Production Expenditures, am I still eligible for the OPSTC?

5. When are eligible expenditures incurred?

6. If I lease a location for shooting in Ontario, either directly from the property owners or via an agent or broker, will those expenditures be eligible tangible property expenditures under the OPSTC?

7. What is considered "assistance" and therefore grinds the tax credit?

8. Does crowdfunding impact a production’s tax credit?

9. Does the timing of an OFTTC or OPSTC Certificate of Eligibility impact OCASE?

10. What is the tax credit administration fee?

11. Where can I get more information?


1. Are productions that are only exhibited on online platforms eligible for the OPSTC?

Productions that are only exhibited online through a service which provides content to the end user for a purchase, license or subscription fee are eligible for the credit. Examples of such over-the-top streaming services are Netflix, Crave, Amazon Prime and Hulu.

2. Does Ontario follow CAVCO Public Notice 2017-02 which defines ineligible genres and Public Notice 2017-03 which defines advertising for purposes of federal film or video production tax credit programs?

Yes, OMDC uses these definitions in determining if a production is an excluded production by virtue of being one of the genres listed in the OFTTC and OPSTC Regulation (O. Reg 37/09) section 27(2) h and section 31 paragraph 4, or section 90(11) of the Taxation Act, 2007 for OCASE. While OMDC uses the same definitions, OMDC will conduct our own assessment of a production’s genre.

Public Notice 2017-02

Public Notice 2017-03

3. Has there been any change to the treatment of talk shows for the purposes of the provincial tax credits?

Talk shows have always been and continue to be ineligible for all provincial tax credits, including OFTTC, OPSTC, OCASE and OIDMTC. Talk shows are only eligible for the federal credit, the Canadian Film or Video Production Tax Credit administered by CAVCO, where principal photography began after February 16, 2016. Talk shows are not eligible for the federal Film or Video Production Services Tax Credit administered by CAVCO.

4. If my qualifying labour expenditures are less than 25% of my Qualifying Production Expenditures, am I still eligible for the OPSTC?

Yes, however, your production’s qualifying production expenditures will be capped at no more than 4 times your qualifying labour expenditures. Labour expenditures include salary and wages and labour paid under an eligible service contract.

5. When are eligible expenditures incurred?

They must be incurred for the stages of production after the final script stage to the end of post-production. In order to be qualifying production expenditures for a corporation’s taxation year, the expenditures must be incurred in the taxation year, paid in the taxation year or within 60 days after the end of the taxation year.

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6. If I lease a location for shooting in Ontario, either directly from the property owners or via an agent or broker, will those expenditures be eligible tangible property expenditures under the OPSTC?

To qualify as an eligible tangible property expenditure, an expenditure must meet all of the conditions set out in subsection 92(5.7) of the Taxation Act, 2007. This includes the condition that the expenditure must be paid to a person or partnership that is ordinarily engaged in the business of selling or leasing tangible property of the type of tangible property acquired or leased by the corporation. Whether a person or partnership is “ordinarily engaged in the business” is determined on an objective basis by weighing all of the facts and circumstances of the particular business. The person or partnership selling or leasing the tangible property must be ordinarily engaged in the business of selling or leasing the particular property and the use of an agent or broker by the corporation claiming the tax credit or by the person or partnership selling or leasing the property is not relevant in making this determination.

7. What is considered ‘assistance’ and therefore grinds the tax credit?

Assistance includes grants, subsidies and forgivable loans.  These will reduce (‘grind’) your tax credit. However, the 2015 Ontario Production Services and Computer Animation and Special Effects Transitional Fund is not considered assistance for the purposes of the OFTTC, OPSTC or OCASE.

Bona fide loans with a set repayment date, other tax credits, licence fees and equity investments are not considered assistance.

Sponsorships may be considered assistance if there does not appear to be an exchange of benefits (such as cash or goods) at fair market value between the producer and the sponsor.

Labour deferrals reduce the amount of labour that can be claimed for the OFTTC and OCASE tax credit. Deferrals for non-labour costs do not. The OPSTC is based on qualifying production expenditures (QPE) which is broader than just labour. Deferrals of qualifying production expenditures reduce the amount of QPE that can be claimed for the OPSTC.

We will want to see documentation of all the financial contributions to a production, including loans, deferrals and sponsorship amounts.

In April 2017, CRA posted an application policy to provide stakeholders in the film, video and television production industries with an overview of the legislation related to the definition of assistance. The application policy addresses various forms of financing and provides guidance to stakeholders to help them determine whether an amount would be considered assistance for purposes of calculating the Canadian Film or Video Production Tax Credit (CPTC) and the Film or Video Production Services Tax Credit (PSTC). The policy also applies to similar provincial tax credits that are co-administered by CRA such as OFTTC, OPSTC and OCASE.

CRA Application Policy
 
8. Does crowdfunding impact a production’s tax credit? 

Crowdfunding will not impact a production’s eligibility for a tax credit. However, depending on the type of crowdfunding model utilized, it may be treated as assistance. In April 2017 CRA posted an application policy on various forms of financing and how to determine if they were assistance. The policy also dealt with three crowdfunding models: donation, lending and investment. The donation model is the one that producers might be most likely to use where there are small gifts/items provided by the producer to the contributor based on tiered levels of donation. In accordance with CRA’s application policy the donation model of crowdfunding would be treated as assistance.
 
CRA Application Policy 

9. Does the timing of an OFTTC or OPSTC Certificate of Eligibility impact OCASE?
 
Yes. For purposes of OCASE, an eligible production is one that has already been issued an OFTTC or OPSTC Certificate of Eligibility. If you are a producer that will be applying for OFTTC or OPSTC and you have performed eligible animation or visual effects activities so you plan on applying for OCASE, you may wish to consider staggering your applications. Applicants for the OFTTC/OPSTC may apply to OMDC as early as the first day of principal photography or key animation. OCASE applicants may only apply to OMDC at the end of their fiscal year. If you have applied promptly, you will have your OFTTC/OPSTC Certificate of Eligibility in hand and it won’t hold up your OCASE application. Likewise, you may have contracted vendors to provide animation or visual effects services on your production. The processing of OCASE applications by those vendors for their work will be held up pending the processing and certification of your OFTTC/OPSTC. Producers are encouraged to communicate with their visual effects and animation suppliers as to when they file their OFTTC/OPSTC claims.

10. What is the tax credit administration fee?
 
The OPSTC administration fee is calculated as 0.15% of eligible expenditures for the application. There is a minimum fee of $5,000 per application and a maximum fee of $10,000 per application.

There is an additional filing fee of $100 applied to applications for Certificates of Eligibility received more than 24 months after the end of the first fiscal year in which principal photography began. Where a year-end has not been included in the application, the additional fee will be applied to applications submitted more than 24 months after the start of principal photography. As well, there is a fee of $100 for each Amended Certificates.
 
11. Where can I get more information?

If you have further questions, please contact the phone duty line by e-mail taxcredits@omdc.on.ca, or call us at 416-642-6659.Please leave a detailed message including your name, company, phone number and the file about which you are inquiring. There is a different person on phone duty every day, and he/she will respond to your email or call within one business day.

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