Film tax jack cut back By Oona Woods Power to the film people. The sheer outrage of the celluloid crew and threats from foreign filmmakers to pull out of productions in Canada forced Revenue Canada into retracting its proposal to tax foreign film actors at full Canadian rates. Ian Waddell, British Columbia’s Minister of Small Business, Tourism and Culture, welcomed the Jan. 22 announcement. "This excellent news will alleviate fears that threatened to damage our $700-million film and television production industry," Waddell said in a release. The decision to enforce the policy would have required foreign actors working in Canada to file Canadian tax returns and pay taxes of up to 50 per cent of their income earned here. Previously, they were required to pay only a 15 per cent withholding tax that was usually reimbursed in their own state. The State of California however, refused to co-operate with the Canadian system in an effort to stem the tide of production outside of their jurisdiction. Waddell also expressed hope that the policy reversal shows that the federal government understands the distinct nature of the film community in B.C. and its value to the provincial economy. However, there are indications in Ottawa that Heritage Minister Sheila Copps is considering some type of tax credit which would favour Canadian-made films over foreign films. Industry people in B.C. say this may favour Ontario, as most of the film production in that province is "Canadian." "The federal government must understand that 85 to 90 per cent of B.C.’s film and television industry activity is due to foreign production," Waddell said. Waddell is looking to entice Revenue Canada further over to the side of the industry. "The only outstanding issue that needs to be resolved is the proposal to eliminate the federal production services tax credit for foreign film producers." Waddell says film revenues from 1998 are expected to exceed the $700-million mark, up from $630 million the previous year. A release from the Sea to Sky Film Commission estimates that filming in the corridor benefits the local community to the tune of $2-million a year.