BC Production Services Tax Credit: Eligible Labour Expenses Explained

BC Production Services Tax Credit: Eligible Labour Expenses Explained

If you are filming in British Columbia, labour costs are often your biggest expense. The BC Production Services Tax Credit (PSTC) helps reduce these costs, but only if your labour expenses meet strict rules. This guide explains which labour expenses are eligible under the Distant Location Production Services Tax Credit and shows how to avoid common claim mistakes.

The PSTC is a refundable corporate income tax credit. Accredited film and video productions in BC can apply. If your production takes place outside major urban centres, the distant location bonus can add valuable savings to your budget.

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What Is the Distant Location Production Services Tax Credit?

The Distant Location Production Services Tax Credit is an extra benefit within the BC Production Services Tax Credit. It applies when principal photography happens in a “distant location” in British Columbia, which means areas outside the Vancouver–Whistler–Hope corridor.

Key program facts:

• Credit value:
  • 6% refundable tax credit
  • Calculated only on qualified BC labour expenditures
• Who can apply:
  • Canadian or foreign production companies
  • Must have a permanent establishment in BC
  • Must mainly carry on a film or video production business
• Production type:
  • No Canadian content requirement
• Stacking rules:
  • Cannot be claimed if the BC Film and Television Tax Credit (BCFTTC) is claimed for the same production

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What Counts as Qualified BC Labour?

Eligible labour expenses must meet all of these conditions:

• Paid to BC-based individuals
• For work done in British Columbia
• Directly related to the production
• Paid during the eligible tax year

Examples of eligible labour expenses:

• Salaries and wages paid to:
  • Cast
  • Crew
  • Directors
  • Production staff
• Taxable benefits included in employment income
• Employer-paid statutory benefits tied to eligible wages

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What Does Not Count as Eligible Labour?

Some expenses are often misclassified and are not eligible:

• Payments to loan-out corporations
• Fees paid to independent contractors who are not BC residents
• Per diems, accommodation, and travel costs
• Post-production services performed outside BC
• Non-labour production costs of any kind

The credit covers labour-only expenses, and claims are closely reviewed for compliance.

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How the Distant Location Requirement Affects Labour Claims

To qualify for the distant location credit:

• Principal photography must take place in a qualifying area of BC
• Labour expenses must be tied directly to work done in that location

For example:

• A crew member hired in Vancouver but working on set in Northern BC may qualify
• A Vancouver-based editor doing remote post-production work does not

Clear payroll records and location tracking help support your claim.

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How to Claim the Credit

The Distant Location Production Services Tax Credit is claimed through your corporate income tax return with the Canada Revenue Agency.

Steps to claim:

1. Obtain production accreditation from the Province of BC
2. Track and document all qualified BC labour expenses
3. File your corporate tax return and include the credit claim
4. Receive the credit as a refund, even if your corporation owes no tax

GrantHub’s eligibility matcher can help you check if your production location and labour structure meet the program rules before you file.

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Common Mistakes to Avoid

1. Including non-labour costs
   Only labour expenses qualify. Equipment rentals and travel costs will be denied.

2. Claiming ineligible workers
   Payments to non-BC residents or loan-out companies are a frequent audit issue.

3. Double-dipping with BCFTTC
   The PSTC cannot be claimed if the BC Film and Television Tax Credit is used.

4. Weak documentation
   Missing payroll records or unclear work locations can delay or reduce your refund.

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Frequently Asked Questions

Q: How much is the Distant Location Production Services Tax Credit worth?
The credit is worth 6% of qualified BC labour expenditures. It is refundable, so you can receive the amount even if your corporation owes no tax.

Q: What is considered a distant location in BC?
A distant location is anywhere in British Columbia outside the Vancouver–Whistler–Hope corridor. Rural and northern regions usually qualify.

Q: Do foreign production companies qualify?
Yes. Foreign producers can apply if they have a permanent establishment in BC and mainly carry on a film or video production services business.

Q: Can I claim this credit with the BC Film and Television Tax Credit?
No. The Production Services Tax Credit and the BC Film and Television Tax Credit are mutually exclusive for the same production.

Q: Are post-production wages eligible?
Only if the work is performed in British Columbia and meets the qualified BC labour criteria. Remote or out-of-province work does not qualify.

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Next Steps

Knowing which labour expenses are eligible is key to making the most of the BC Production Services Tax Credit, especially for distant location shoots. GrantHub tracks hundreds of active grant and tax credit programs across Canada, including provincial film incentives. Check which ones fit your production profile.

See also:

• How Transferable and Production Tax Credits Work in Canada
• How Canadian Film and Media Companies Use Tax Credits and Coproduction Treaties
• NWT Film Rebate Program: Is Filming in the Northwest Territories Worth It?