By Alan Hollingsworth and Jennifer Francis

There’s a reason why Canada’s entertainment industry is often referred to as “Hollywood North.”  

It’s an increasingly popular location for U.S. productions – among the most recent, filmed in British Columbia, were Star Trek Beyond and Deadpool 2. And the country’s wealth of facilities, talent and financial incentives led to Netflix’ decision last year to invest at least $500 million Canadian ($400 million U.S.) to establish its first permanent, multipurpose film and television production presence there

Sweetening the pot for its entertainment industry neighbors from the south (and other shores) has been good for Canada. Volume by its Foreign Location Service production sector reached $3.76 billion in 2016/17, supporting 77,000 fulltime Canadian jobs.

And the exchange rate on the Canadian dollar (there’s currently a 25-cent margin) has been the frosting on the cake. 

Even so, it’s important to be aware of the risks and other considerations that cross-border productions can involve. Here’s what to keep in mind. 

  • Tax Incentives: The federal government and each province in Canada provide tax incentives if you bring your production there. They can take the form of a tax incentive or rebate or grant and can range between 25 percent of eligible labor costs to a cap of 60 percent of the total production costs. There are a host of caveats, though. For example, you must partner with a Canadian production company, and 75 percent of the production costs must go to Canadians

  • Licensed Risk and Insurance Consultants: Your risk and insurance consultants and the policies to cover your liabilities must be licensed in one province – the one where your production office is established and where you are applying for the tax credit. If that’s not done, the premium may be subject to a government excise tax that can range from 10 percent to 50 percent.   If you’re going to be claiming the tax incentives, there’s a good chance that your books will be audited. A 10 percent levy (or higher) on a million dollar insurance premium can be substantial.

  • Worker Benefits: On the people side, the Canadian government does not require visiting production companies to provide medical or occupational accident insurance for their crews. However, it should be considered as the risk of accidents and sickness tends to increase when people are away from their home country for extended periods or may not be traveling with any sort of medical or income protection. Liability carriers offer more attractive rates knowing the risk of a potential medical claim is placed elsewhere. There’s been an uptick in claims that the lead production companies have had to pay out of pocket.
  • Insurance types to consider include:
  • Visitors to Canada insurance is emergency medical coverage, designed to cover an individual’s medical bills in Canada that result from unforeseen accidents or illness. Key benefit features are medical evacuation, out of pockets cost for physician fees and hospital charges  

  • Occupational Accident insurance includes lump sum payouts in the event of accidental death, dismemberment or permanent total disability, a weekly accident indemnity similar to workers compensation. It also includes a benefit that pays for paramedical services, medical equipment and funeral expenses.  

Both policies are inexpensive protection against the elevated financial burden of unexpected medical costs.  Premium for a combined medical and occupational accident package runs a minimum of  $1,000, depending on the number of people, and coverage amounts.

HUB International’s team of Entertainment Insurance experts are ready to guide your team on all the risk considerations that should be factored into planning for any type of show – in the U.S., Canada and other locations, too. Contact us today.