New Declaration For Private Production or Distribution Companies and Update on Canadian Content Information

The Canadian Audio-Visual Certification Office (CAVCO) is pleased to announce the new "Private production or distribution company declaration" (less than 50 shareholders) as part of its on-going simplification process and continuing efforts to better serve the film and video industry.

Starting immediately, private corporations will only have to fill out the new CAVCO declaration instead of submitting the Certificate of Incorporation, Articles of Incorporation, Memorandum of Association and other paperwork previously required by CAVCO in order to confirm private corporations as "prescribed taxable Canadian corporations" for the Canadian Film and Video Production Tax Credit Program^[1] (CPTC).

Please take the time to familiarize yourself with the following "Private Company Declaration" form and feel free to contact us for any questions.

Important Notice:

• The Meaning of "Canadian" Concerning the Corporate Structure

CAVCO has been dealing with an increasing number of ineligibility issues concerning the corporate structure and Canadian control of production companies that apply for the CPTC. Please note that the precise definition of "Canadian" when dealing with the ownership of corporations is set out in section 3 of the Investment Canada Act. For that purpose, "Canadian" means:

"(a) a Canadian citizen, (b) a permanent resident within the meaning of the Immigration and Refugee Protection Act (2001) who has been ordinarily resident in Canada for not more than one year after the time at which he first became eligible^[2] to apply for Canadian citizenship, (c) a Canadian government, whether federal, provincial or local, or an agency thereof, or (d) an entity that is Canadian-controlled, as determined pursuant to subsection 26(1) or (2) and in respect of which no determination or declaration has been made under subsection 26(2.1) or (2.2)".

This definition must be kept in mind when referring to subsection 1106(1) (c) of the Income Tax Act for a "Canadian-controlled corporation", as determined for the purposes of sections 26 to 28 of the Investment Canada Act. According to these sections, a corporation needs to have the majority of its voting interests held by Canadians within the meaning of section 3 of the Act.

For greater clarity, if majority shareholders (50% and more) have not become Canadian citizens^[3] within the required time, and before their involvement in the production company, the production will not qualify for certification under the CPTC program.

Canadian Content Information:

• CPTC Series or Collection of Films Certification

With regards to the certification of a television series or a collection of films, CAVCO wishes to remind producers that each of the episodes in the series or each of the films in the collection must meet the same requirements of the Regulations individually and must earn the required number of Canadian content points. No points will be allotted for a Canadian who shares the functions of a key creative position with one or more non-Canadians. Where the functions of a position are carried out by more than one person, only the number of points provided for in the Regulations will be allotted, regardless of the number of individuals named in the credits for this position.

• Canadian Screenwriter Points for a Series

CAVCO also hereby reiterates its policy to deny the screenwriter points for every episode of a television series or mini-series where non-Canadians holding positions such as story editors or creative consultants are involved in the story department. For greater certainty, the screenwriter points will be denied even in cases where a Canadian writes any, or all episodes, but non-Canadians are in the previously mentioned positions.

Please consult CAVCO's guidelines for more information. For questions, contact us at:
CAVCO

9th Floor, 25 Eddy Street
Gatineau, Quebec
K1A 0M5
Telephone: (819) 934-9830
Toll-free: 1-888-433-2200
Fax: (819) 934-9828
www.pch.gc.ca/cavco

• ^[1]Please note that CAVCO could require subsequent information on a case-by-case basis.
• ^[2]In order to be eligible, a person has to have been lawfully admitted to Canada for permanent residence, not ceased since such admission to be a permanent resident pursuant to section 24 of the Immigration and Refugee Protection Act (2001), and, within the four years immediately preceding the date of his application, accumulated at least three years of residence in Canada.
• ^[3]Please refer to the Citizenship Act for specifics.

[ Back to the Canadian Film or Video Production Tax Credit page ]

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