This one from the Chronicle Herald on 12 September.

Nova Scotia film makers point out that tax credits and ‘infrastructure support’ are better in other provinces, and argue that this is leading businesses away from investing in the far eastern province.

Inter-provincial or regional competition can be healthy if it means that residents and businesses have choice of service provision, rather than being faced with a virtual monopoly.

The provision of incentives such as tax concessions to attract investment however, can be a different game to ensuring effective and efficient services. To what extent are these incentives in place to attract sustainable investment, and how much of these policies merely pander to local rent seekers?

In this case, criticism of the government comes in varying shades. Some are aimed at municipal governments, others at the Nova Scotia provincial governments.

“MacKenzie (CEO of provincial film fund) pleaded with Halifax Regional Municipality to up the ante on its contribution to film production, …[stressing] the importance of tax incentives, free rent on municipal buildings used for filming and even discounts on goods and services.”

“Like the industry association, MacKenzie wants the Nova Scotia tax credit raised to 50 per cent from 35 per cent.”

Others indicate the frustration filmmakers feel in less subtle tones.

“We are going to lose a lot of people in the industry if the government maintains its current policy of inaction. I’m really pissed off by the half-assed action of the government,”

“We are losing millions, a lot of talent is dropping out of the industry or moving away and we can’t get that back overnight. My two films speak to the fact that . . . we can create higher-profile film projects out of the region. It’s a show of hope for others in the region.”

– Nova Scotia filmmaker Chaz Thorne

 

One question that comes to mind is, if Thorne’s films are indicative of the high-profile films that can be made in the province, why can it not be done in the current environment?

 

Nevertheless, this plea still follows the ‘rent seekers rule’ of demonstrating how valuable the industry is, then showing close the industry is to being wiped out, and all that economic value with it.

As with most ‘perks’ in life, aren’t financial incentives really a way of encouraging people to choose an option they would normally judge as sub-optimal? In this vein of thought, the larger the incentive, the greater the signaling effect of the option’s underlying demerits should be.

But when it comes to location shooting, production certainly seems to follow the money, and hence the incentives that are being offered in various jurisdictions around the world. But just how sustainable a policy is that? Location shooting is one of the most mobile forms of investment there are, but it possibly looks good for politicians as it almost definitely means local jobs.

But do such policies allow for the development of local talent through knowledge spillovers? Do these financial incentives become catalysts for further investment? Or does it result in local focus pullers and gaffers waiting around until producers can convince investors that the state will offer them adequate tax credits to make their investment viable?