Blame Canada’s Tax Incentives For Dual-Identity Helmers

A few years ago, a veteran U.S. TV director was having trouble finding a gig. So much production was ending up in Canada that Americans were competing for fewer and fewer jobs. “Work started tapering off in the U.S.,” the director said. “I went on two interviews [for work in Canada], and when they found out I wasn’t Canadian, they said, ‘Sorry.’ I remember standing out on the corner and thinking, This won’t happen again —  I’ve got to feed my family. So I got an immigration lawyer, established Canadian residency, and I’ve been working nonstop in Canada ever since. I know half-a-dozen guys who have done this.”

canada u.s. flagsDual residency has become a popular way for American filmmakers to find work with producers who get tax breaks when they hire Canadians. The veteran director says he has no qualms about his decision. “If it were Iran, I’d have a pang,” he said, laughing, “but I see Canada as a more refined version of the United States. It’s a cool country. I don’t see a big difference.

“People have been doing it for 20 years,” he continued. “Primarily it has to do with production companies getting a tax credit to film in a particular Canadian province. If you hire a certain number of Canadian workers, they give you a tax credit.” The credit can be as much as 60% of production costs, depending on the number of “points” a production accumulates.

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It takes at least six points for a film or TV show shot in Canada to receive the tax credits: two each for the director and screenwriter; one point each for the lead and second lead actor; and one point each for the director of photography, production designer, music composer and film editor. Ten points earns the full break.

Vancouver-based immigration attorney Catherine Sas has been helping American filmmakers become permanent Canadian residents for  more than  20 years. “Conservatively, I help five a year so that they can have the flexibility to work in both countries,” she told Deadline. “It’s got to be over a hundred people.” Sas said she’s one of many attorneys in British Columbia and Toronto who do the same thing — though perhaps none who have had more American filmmakers as clients as she has.

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Sas, a partner in the Miller Thomson law firm, says her clients include directors, producers, actors, art directors, musicians, animators and other skilled industry workers. She noted that being a permanent resident “allows you greater flexibility to work in Hollywood and Hollywood North” – as British Columbia often is called. “It makes sense for people who want to have the flexibility to pursue this option.”

ProudToCanadianAvvie2 The lure of dual citizenship for U.S. filmmakers began in 1994 with the adoption of the North American Free Trade Agreement. Canada refused to sign off on the deal unless a cultural exemption was included allowing it to subsidize its film and TV industry. American negotiators caved and threw Hollywood under the bus by permitting Canada to lure American productions and jobs north of the border with the promise of cost-cutting tax incentives. And the only thing Hollywood likes more than a good movie is a good tax incentive.


American filmmakers opting for Canadian citizenship see it as a way to recoup some of the tens of thousands of jobs lost to that unfair trade advantage. “I do know some people who have made that transition,” said an assistant director who became a Canadian the old-fashioned way – by marrying one.

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“I know of a lot of people who have done it,” says a Canadian filmmaker, “and it has done well for them. They can work in both countries. But I know others who it hasn’t worked out for. Once you become a dual citizen, you end up vying for Canadian productions, and usually not at the level of the bigger network and cable shows. A lot of guys went up there thinking this could get them jobs but ended up feeling stuck.”

One downside is that more than half of the Canadian tax credit is provincial,Toronto skyline and in order to qualify for the full benefit, production companies must employ workers where they reside and pay taxes. So a writer or director living in Toronto is less valuable to a Vancouver-based production than one living in the western province. This has led to a ghettoization of dual citizens in British Columbia, Ontario and Quebec.

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“I know directors who have done this, and a couple of actors too,” said an American producer who has worked on numerous U.S. films shot in Canada but who has yet to take the dual-citizenship leap himself. “It’s a long process. I thought about it, but I never did it,” he added.

“First you have to become a Canadian permanent resident” — akin to obtaining a U.S. green card — said Vancouver-based immigration attorney David Cohen. “After three years of residency, you can apply for citizenship. After that it usually takes a year or two to become a Canadian citizen.”

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Having a job offer, however, can cut that period in half. “In British Columbia, an Vancouveremployer can petition the BC government saying that you are a person with a particular skill, and if the government agrees, you will be put on a fast track,” said the veteran director who was made a permanent resident of Canada after only a year and a half. “Once you become a permanent resident, you become a ‘landed immigrant,’ which is like having a green card, and can work in the Canadian province where you reside and pay your taxes.”

And because the income from this runaway production is earned in Canada by a resident of Canada, the U.S. can’t tax it — though one of the prices of dual citizenship is that taxes are much higher in Canada. But for American filmmakers who have gone this route and managed to find regular work in Canada, it might be worth it. After all, another benefit is that their families qualify for free health care.


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