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Prepared for:Ministry of Economic Development October 2005 
Film and TelevisionIndustry Review
Final Report 
 
British Columbia Film and Television Review Page iOctober 2005
Table of Contents
Executive Summary..................................................................................................................iiiList of Terms and Abbreviations.............................................................................................xii1.0Introduction...................................................................................................................12.0Overview of British Columbia Film and Television Industry........................................2
2.1Size and Scope of the Film Industry........................................................................................22.2Tax Credits Available for Productions Filming in BC..............................................................5
2.2.1Federal Tax Credits......................................................................................................52.2.2British Columbia Tax Credits.........................................................................................52.2.3Impact on Effective Wages............................................................................................7
2.3Review of Existing Film Industry Data......................................................................................8
3.0Economic Impact of the Film and Television Industry in British Columbia...............12
3.1What is Economic Impact?.....................................................................................................123.2Economic Impact Methodology..............................................................................................13
3.2.1Analysis of the Payroll Data.........................................................................................143.2.2Employment Survey....................................................................................................16
3.3Direct Employment Generated by the BC Film and Television Production Industry...........18
3.3.1Economic Impact Estimates Based on 2004 Data........................................................183.3.2Economic Impact Estimates Adjusting for Production Levels........................................19
3.4Multiplier Impacts.....................................................................................................................203.5Tax Revenue Impacts.............................................................................................................22
3.5.1Personal Income Taxes..............................................................................................223.5.2Consumption Taxes Paid by Individuals.......................................................................233.5.3Consumption Taxes Paid on Production Spending.......................................................233.5.4Corporate Income Taxes.............................................................................................233.5.5Total Provincial Tax Revenues Generated...................................................................24
4.0Factors Affecting the Film and Television Production Industry – Overview..............25
4.1Literature Review....................................................................................................................254.2Interviews with Industry Stakeholders....................................................................................274.3Comparison of British Columbia with Other Jurisdictions.....................................................29
5.0Statistical Analysis of Film and Television Industry Production Levels....................36
5.1Data..........................................................................................................................................365.2Preliminary Data Analysis.......................................................................................................38
5.2.1Visual Examination of the Correlation Between Production Spending and Tax Credits..385.2.2General Trends in Production Spending – Pre and Post Tax Credit Implementation......425.2.3Rank-Order Analysis...................................................................................................44
5.3Econometric Analysis..............................................................................................................55
5.3.1Introduction to Regression Analysis.............................................................................555.3.2Econometric Analysis of Film/TV Industry Data............................................................575.3.3Summary of Additional Regression Analysis................................................................62
5.4Assessment of the Econometric Analysis..............................................................................63
 
British Columbia Film and Television Review Page iiOctober 2005
6.0Costs, Benefits and Opportunity Costs of Tax Credits Offered to the Film andTelevision Industry in British Columbia.....................................................................65
6.1Fiscal Costs and Benefits: Taxes Paid and Tax Credits Received by the Film/TVProduction Industry.................................................................................................................656.2Assessing the Opportunity Cost of the Tax Credit Program.................................................67
6.2.1Opportunity Cost Assessment Based on the Econometric Analysis..............................696.2.2Limitations to the Opportunity Cost Assessment..........................................................716.2.3Sensitivity Analysis.....................................................................................................72
6.3Multiple Account Evaluation: Consideration of Other Costs and Benefits...........................76
7.0Summary and Conclusions.........................................................................................80 Appendix A: Employment Survey...........................................................................................81 Appendix B: Economic Impact Multipliers..............................................................................84 Appendix C: Details of the Tax Revenue Calculations...........................................................85 Appendix D: Full Regression Results.....................................................................................89 Appendix E: Summary Literature Review................................................................................94
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