Global Video Inc. Gets No Credit

To promote cultural programming in film, the Canadian government provides tax incentives to producers who make films with significant Canadian cultural content. Many producers rely on these tax incentives to make Canadian films they otherwise could not afford. However, to qualify for this incentive, producers must meet requirements. Producers falling short of the requirements could find themselves responsible for the entire production costs, like the unfortunate producer in Global Vrdo Inc. v. Ihe Queen.¹

Section 125.4 of the Income Tax Act (Canada)² gives film producers a refundable tax credit of 25% of qualified labour expenses³ incurred making a film. To be eligible, a film must be made by a qualified corporation and certified as a Canadian film or video production ("CFVP") by the Canadian Audio-Visual Certification Office ("CAVCO"). One of the tax credit's main objectives is to motivate Canadian producers to make films focussed on Canadian content. The credit also ensures that