Just weeks after the Harmonized Sales Tax arrived in British Columbia amid a swirl of angry protest, the province's $1.3 billion film industry says the new tax is great for business.
As president of North Shore and Mammoth Studios in Vancouver, Peter Leitch is already seeing savings since the tax came into effect on July 1.
"What the HST does is reduce our costs on a lot of the goods and services that we rent by some 7 per cent. That's extremely significant in a marketplace where a difference of 3 percent can take a project from here to New Mexico, Louisiana or even Ontario," the chair of the Motion Picture Production Industry Association of British Columbia told CTV.
Leitch believes HST savings will be a boon to a range of related industries, including equipment rental shops, caterers, set builders and wardrobe, hair and makeup artists.
And he's not alone in his praise of the HST. In fact, filmmakers have joined forces with the newly-formed "Smart Tax Alliance," a coalition of 30 B.C. business and industry groups organized to support the HST.
In their estimation, the HST will create 100,000 new jobs and lead to more than $10 billion in investments by 2020.
"When you cut the cost of doing business by $2 billion, when you reduce the tax rates on new investment by 35 to 40 per cent, you will get over time -- not overnight or in five weeks -- a significant business response," alliance spokesperson Jock Finlayson said.
Before the introduction of the HST, the film industry paid PST on goods and services, but because production companies were not viewed as manufacturers, they could not recover that money from the government.
The HST is recoverable, however, meaning many production costs are effectively reduced by 7 per cent.
But the lead organizer of B.C.'s anti-HST lobby doubts anyone in the industry will actually see those savings.
Chris Delaney, who owns a film and television production company specializing in animation, says the Smart Tax Alliance is little more than an elite "who's who of Liberal supporters."
"We know there are winners and losers with the HST," Delaney told CTV. "The losers are everyone in B.C., the winner is a small group of big businesses and that's them!"
While waiting for signs of long-term benefits, Delaney says he's going to keep an eye out for rising labour costs.
As workers confront higher prices on the goods they buy, including the DVDs and tickets for movies made in Hollywood North, Delaney expects a lot of them to be looking for a raise.
"It's gonna be a wash at the end of the day."
B.C. restaurateurs say they've already seen the new tax take a bite out of their business.
According to a recent survey by the Canadian Restaurant and Foodservices Association, 47 per cent of respondents in B.C. said the HST has already led to staff reductions.
With files from CTV BC's Peter Grainger
