Under changes to Bill C-10 introduced by the minority Conservative government, the Income Tax Act would deny a production company its tax credit unless the Minister of Canadian Heritage was 'satisfied that public financial support of the production would not be contrary to public policy.' The government further muddied the waters by saying it would clarify the meaning of 'contrary to public policy' at a later date.
Many filmmakers including David Cronenberg, Atom Egoyan and Sarah Polley have castigated the government for both the amendment and its vagueness. Cronenberg drew comparisons with the draconian censorship laws of China while director Martin Gero, whose debut Young People Fucking was named one of Canada's Top Ten films of 2007, dismissed the legislators 'as old people fucking with Canada's film industry.'
Speaking on background to Screen International, a government spokesperson suggested the controversy was overblown and that the changes were a matter of harmonizing tax law with criminal law, a means of closing a loop-hole whereby a convicted child pornographer could technically be eligible for a tax credit.
David Zitzerman, a Toronto-based partner with the entertainment law group of Goodmans LLP dismissed this explanation. He told Screen International the Income Tax Act already defines exclusions. Any other so-called public policy issues could be resolved through the Criminal Code. He said the legislation, if passed, would undermine the financial footing of future production given the uncertainty engendered. 'Tax law is supposed to be about certainty.'
Banks might be unwilling to extend bridge financing if a production's tax credits could be withheld. 'It will lead to self-censorship,' said Zitzerman. 'Who is going to risk making a controversial film'' He pointed to critically-lauded Canadian films and their potentially controversial content such as Lynne Stopkewich's Kissed ('necrophilia) and Thom Fitzgerald's The Hanging Garden ('gay sex').
'The proper way to enact change it is to propose guidelines and then ask the industry to engage in discussion,' says Zitzerman. 'Given that we already have definitions of pornography and child pornography, that we have regulatory codes for broadcast, even assuming you think new guidelines are needed how can you not have a dialogue''
Another irksome detail: the proposed changes do not affect tax-credit eligibility of foreign-financed productions.
Opposition MPs admitted that the changes had slipped by them, buried as they were in a 600-page document. The Liberal-dominated Canadian Senate, the so-called chamber of sober second thought, may refer the bill back to committee.