CAVCO Public Notice 2016-02 – Call for Comments
Gatineau, February 18, 2016
Definition of "Advertising" for the Purpose of the Federal Film or Video Production Tax Credit Programs
- The purpose of this public notice is to seek written comments on proposed modifications to the definition of "advertising" for the Canadian Film or Video Production Tax Credit (CPTC) and the Film or Video Production Services Tax Credit (PSTC).
- While brand participation in audio-visual productions is a legitimate source of financing, the concern for the Canadian Audio-Visual Certification Office (CAVCO) is in determining at what point the programming has become more than branded content and is more rightfully considered advertising.
Relevant Clauses of the Income Tax Regulations
- A production will not qualify as a "Canadian film or video production" if it is an "excluded production" as defined in subsection 1106(1) of the Income Tax Regulations (Regulations). Paragraph (b) of this definition lists 11 categories of production which are ineligible for the CPTC, including "advertising".
- Subsection 9300(2) of the Regulations lists 10 types of production that may not be accredited as eligible productions for the PSTC, including "advertising".
CAVCO is seeking comments on the revised definition as proposed below.
A production that:
- includes a call to action to the viewer to take an action (e.g., to call, to visit a store, to visit a brand or retail website);
- includes a brand name in the title; or
exceeds the maximum permissible time on screenFootnote 1 of brand logos and/or positive references to a brand.
For clarity, the following elements will not make a production ineligible as "advertising". However, they may trigger a more in-depth review to ensure the production does not meet the definition set out in paragraph 5 of this notice:
- The name of a person that could also be considered a brand (e.g., Martha Stewart) is in the title of the production.
- A brand is involved in the creation of a program, without exercising editorial control.
- A brand has the right to final factual review of the production.
- The production is named after a book, video game or toy.
- The viewer is directed to the production's website for more information.
- There is a link to a sponsor's website or to a website where products can be purchased in the tail credits.
- The production is broadcast with commercial breaks or other promotional content (e.g., on a website) that is related to a brand featured in the production.
- The production is filmed at the brand's place of business.
- The production is partially or fully funded by a brand.
Coming Into Force
- CAVCO will set a coming into force date based on the start date of principal photography when a final version of the definition is published.
Call for Comments
- CAVCO requests written comments on this definition. All comments must be received by CAVCO by May 18, 2016. Submissions must include the name of the person or organization providing comments. Paragraphs should be numbered. All comments received will be given due consideration.
- Please submit your comments by email at PCH.bcpac-cavco.PCH@canada.ca to the attention of the Director, CAVCO.
- Any questions about this public notice can be sent to CAVCO by email (PCH.bcpac-cavco.PCH@canada.ca) or you may call us toll-free at 1-888-433-2200 (Teletypewriter toll-free: 1-888-997-3123).
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