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Update – May 30 : new social media posts have been added to the article.
Article first published on May 22.
Above: picture shared by Rodeo FX on social media to raise awareness about the situation in Quebec, Canada.
In Quebec, Canada, visual effects and animation studios are facing tough times due to the new Quebec budget unveiled by Finance Minister Eric Girard. The budget plans to drastically change tax credits rules.
Specifically, the tax credits would increase from 20% to 25%, but they would now be capped at 65% of a contract’s value, whereas there was no cap previously. Practically, this translates to a decrease in tax credits by about 25-30%.
Rodeo FX Raises the Alarm
Rodeo FX CEO Sébastien Moreau, spoke (in French) on ICI RDI channel to ask the government to reconsider their plans. He explained that the studio tasked advisory firm AppEco to assess the tax credits. According to AppEco, each Canadian dollar saved by the new system will result in a $6 loss for Quebec’s economy.
Sébastien Moreau added that the new system could lead to “hundreds” of people laid off by studios and mentioned that some major Hollywood clients have already stated they are no longer interested in working with studios located in Quebec due to this announcement and the swift change it implies.
Moreau is requesting a delay in the implementation of the new system, which is set to take effect at the end of May. He hopes it will be postponed to early 2025, and that in the meantime, the government and the visual effects and animation industry will be able to discuss the situation.
If the plan goes into effect without changes, Moreau asserts that the industry will collapse: from nearly $1.4 billion (Canadian dollars) in revenue, it would drop to around $400 million.
Furthermore, Moreau noted that other countries are offering or planning to offer attractive tax credit schemes and could benefit from Quebec’s new policy. He cited France as an example, a country Rodeo FX knows well since it launched a studio in Paris.
Credit: ICI RDI
Artists react on social media
Rodeo FX also raised the alarm on LinkedIn, shared the picture shown below as well as a message to the Premier of Quebec. Rodeo FX argued that the survival of the industry is at risk and stated that studios have solutions to suggest, although they do not provide details at this point.
The post was widely shared and liked (nearly 1,000 reactions, 150 shares), indicating significant interest from the visual effects and animation community. Here is a translation of this post, published in French:
Quebec’s VFX and animation studios bring to life the world’s largest film and television productions. Despite this, our industry’s survival in Quebec is at risk due to cuts in government tax incentives.
Rodeo FX
Mr. Premier François Legault, the industry is mobilized and ready to present alternative solutions to maintain our position as a global hub, our studios, and the employment of 8,000 artists who contribute to a more creative and innovative Quebec. Help us preserve the VFX and animation industry.
Other VFX & animation studios also shared their concern, especially in the last few days, as May 31st nears. MPC, Hybride, Folks, and more, shared posts on social media, in French.
We will, of course, closely follow any announcements from the Quebec government and the impact of the measure if it comes into force as planned.
