Halifax – The Atlantic Institute for Market Studies (AIMS) is calling for a market-based solution to a recent budgetary announcement to eliminate the Nova Scotia Film Tax Credit.
AIMS believes the Nova Scotia government is correct in examining the Film Tax Credit as it relates to the film industry. In addition, AIMS’ President and CEO Marco Navarro-Genie argues that subsidies are not good enablers of thriving economies and are often exploited by out-of-province companies.
“Subsidies often create a ‘come-by-chance’ economy where companies in unstable industries utilize the handout – it’s something we must look at across the board in this province,” says Navarro-Genie. “There is some evidence that out-of-province production companies are using loopholes to take advantage of the tax credit, ultimately putting local companies at an unfair disadvantage.”
While Navarro-Genie agrees that public consultation is a good first start, he is concerned about cries to reverse the government’s position.
“In a democratic society we elect governments to make tough decisions,” adds Navarro-Genie. “Sometimes these decisions are politically unpopular, especially when financial data as it relates to return on investment is subjected to closer inspection. We need cooler heads to prevail instead of knee-jerk reactions that instantly criticize government for doing or not doing enough to make a decision.”
AIMS supports public consultation, but are hopeful that all parties involved will make a commitment to understanding the evidence and allow market forces to shape economic choices. “Governments shouldn’t be in the business of paying off industries in the form of subsidies. It only prolongs economic decay and inevitably undermines healthy, competitive companies.”