Administration

1. Responsibilities of CAVCO

CAVCO is responsible for determining whether a production meets the requirements under section 1106 of the Regulations. CAVCO may then recommend that the Minister of Canadian Heritage issue two certificates:

  1. Canadian film or video production certificate (Part A)

    The Canadian film or video production certificate (Part A) is based on an analysis of detailed cost estimates, financing plans (including deemed assistance), as well as Canadian content issues and may be provided before or during the course of production to facilitate interim financing and the claiming of a tax credit at the end of the first corporate fiscal year of production.

    This certificate performs two functions as follows (the second is optional):

    1. projects that the production will be a Canadian film or video production;

    2. estimates the appropriate amounts for determining the qualified labour expenditure of a qualified corporation, for the purpose of calculating the tax credit.

    This certificate may be revoked by the Minister of Canadian Heritage if:

    1. an omission or incorrect statement was made for the purpose of obtaining the certificate, or

    2. the production is not a Canadian film or video production.

    A certificate that has been revoked is deemed never to have been issued.

  2. Certificate of Completion (Part B)
    Once the production is completed, a Certificate of Completion (Part B) may be issued. This certificate certifies that the production was completed within two years after the end of the corporate taxation year in which the principal photography began. If a production is not completed (answer print or master video) within that period, the production will be an excluded production and the Canada Revenue Agency will refuse any tax credit claimed in the year and reassess the corporation for any tax credit previously allowed.

    Because the Certificate of Completion must be issued within 30 months after the end of the corporation's taxation year in which the production's principal photography began, the Department of Canadian Heritage cannot give any assurance that it will issue the certificate within this time frame if the application for a Certificate of Completion, along with all required documents, is not received at the latest 25 months following the end of the taxation year in which the principal photography began.

    When applying for a Certificate of Completion (Part B), producers will need to provide an audited statement of production costs prepared by a certified accountant independent of the production company for productions with a total cost of $500,000 or more. For productions with a total cost ranging from $200,000 to $499,999, a Review Engagement Report will suffice. For productions with a budget of less than $200,000, CAVCO requires a notarized affidavit, signed by the producer, attesting to the total cost of the production. Please see CAVCO's Audit Accounting Guidelines (Appendix III) with respect to this matter.

    Producers may decide to apply for both certificates once the production is completed. In such a case, the Canadian film or video production certificate (Part A) and the Certificate of Completion (Part B) will be issued at the same time.
    CAVCO, on behalf of the Minister of Canadian Heritage, may require that the producer provide all necessary records and financial documents for audit by a third party. The producer will ensure that adequate space and time are provided and that all relevant documents are made available for this audit.

    CAVCO reserves the right to require that its representatives be present at the filming or taping of a production and to require any information, affidavits or sworn statements that it deems necessary in order to issue a certificate.

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2. Responsibilities of the Canada Revenue Agency

In order to claim the tax credit, a qualified corporation must file with its return of income for a taxation year:

  1. a Canadian film or video production certificate (Part A) issued in respect of a Canadian film or video production of the corporation;

  2. the Canada Revenue Agency's form "Claiming a Canadian Film or Video Production Tax Credit" (T1131), for each film for which a tax credit is being claimed;

  3. any other document prescribed in respect of the production.

Once the production is completed, the Canada Revenue Agency will require that the corporation provide the Certificate of Completion (Part B) issued by the Minister of Canadian Heritage, in addition to any other information it deems necessary.

If no tax is payable, a qualified corporation will be entitled to a refund of income tax, subject to the right of the Canada Revenue Agency to offset any other amount owed by the corporation.

3. CAVCO's electronic screen credit

Available for downloading from the CAVCO Web site : www.pch.gc.gc.ca/cavco.

This credit is to appear in all domestic and international versions of each production and in all related advertising, publicity and promotional materials.

4. Processing fees

The fees are as follows:

Part A: 0.15 per cent of the Eligible Production Cost (Line D of the Section 5 of the application form)
Part B: 0.15 per cent of the Eligible Production Cost (Line D of the Section 5 of the application form)
Part A/B 0.30 per cent of the Eligible Production Cost (Line D of the Section 5 of the application form) (The minimum fee is $200 in this case)

Make cheque payable to the Receiver General for Canada.

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