# Canada Film Tax Credits: CPTC, PSTC, and Provincial Credits

Source: https://storiara.com/incentives/canada
Last updated: 2026-09-14
Author: Charles Hirschhorn, Storiara

> Canada has two federal refundable credits. The Production Services Tax Credit (PSTC) pays 16% of qualified Canadian labour on foreign and service productions. The Canadian Film or Video Production Tax Credit (CPTC) pays 25% of qualified labour on certified Canadian productions, with labour capped at 60% of production cost. Provincial credits stack on top: British Columbia pays 36% of BC labour, Ontario 21.5% of all Ontario spend, and Quebec 25% of all Quebec spend.

Canada splits its incentives in two layers. The federal government pays one credit per production, and the province where you shoot pays its own on top. Service productions (a US series shooting in Vancouver, say) take the federal PSTC. Productions certified as Canadian take the CPTC. Both are refundable, so the production company gets cash even if it owes no tax.

## The two federal credits

| | PSTC | CPTC |
|---|---|---|
| Who uses it | Foreign and service productions | Canadian productions with a Canadian producer |
| Rate | 16% of qualified Canadian labour | 25% of qualified labour |
| Base limit | Labour net of assistance | Labour capped at 60% of production cost, net of assistance |
| Effective ceiling | None | 15% of net production cost |
| Minimum cost | More than CAD 1,000,000 (features); per-episode floors for series | Set by CAVCO guidelines |

The PSTC minimum trips people up. The CRA wording is that total cost must be more than CAD 1,000,000 over the 24 months after principal photography begins, so a feature budgeted at exactly CAD 1,000,000 doesn't qualify. Series episodes are tested individually: more than CAD 100,000 for an episode under 30 minutes, more than CAD 200,000 for anything longer.

## The provinces most productions pick

British Columbia pays a 36% production services tax credit on accredited BC labour. On top of that are a 6% regional credit, a 6% distant location credit, a 16% DAVE credit for digital animation, VFX, and post labour, and a 2% major production credit. BC's credit for Canadian-content productions (the film and television tax credit) pays 40% for productions starting principal photography on or after 1 January 2025. BC dropped the pre-certification step for productions first incurring accredited labour on or after 20 October 2025, and the accreditation certificate fee went to CAD 19,000 on 1 March 2026.

Ontario's production services credit (OPSTC) pays 21.5% of all qualifying production expenditure in Ontario, labour and non-labour. Ontario labour must be at least 25% of what you claim, and there are no per-project or annual limits. Canadian productions use the OFTTC at 35% of Ontario labour, 40% on the first CAD 240,000 for first-time producers, plus a 10% regional bonus for shooting outside the Greater Toronto Area.

Quebec's production services credit pays 25% of all-spend production costs in Quebec, labour and goods, on productions with a budget of at least CAD 250,000. Labour on computer-aided VFX and animation earns another 16%. When that work is done under a service contract, only 65% of the contract counts, so the effective rate is (25% + 16%) x 65% = 26.65%. SODEC issues the approval certificate and advance ruling, and Revenu Québec pays the credit.

## A service production in BC, worked through

A CAD 5,000,000 feature shoots in Vancouver with CAD 2,000,000 of accredited BC labour. Assume no regional credits and no other assistance.

- BC PSTC: CAD 2,000,000 x 0.36 = CAD 720,000
- The BC credit counts as assistance, so the federal base drops: CAD 2,000,000 - CAD 720,000 = CAD 1,280,000
- Federal PSTC: CAD 1,280,000 x 0.16 = CAD 204,800
- Total: CAD 924,800, about 18.5% of the budget

Run the same labour through Ontario and the math changes, because the OPSTC reaches rentals, stages, and purchases as well as payroll. That's why the [production accountant](https://storiara.com/roles/production-accountant) should model each province on the real budget before the location decision is locked.

For a CAD 1,000,000 Canadian feature with CAD 550,000 of qualified labour and no provincial credit yet, the CPTC works out as CAD 550,000 x 0.25 = CAD 137,500. The 60% labour cap is CAD 600,000, so this film sits under it. Push labour to CAD 700,000 and only CAD 600,000 counts, giving CAD 150,000, the 15% ceiling.

## Applying and waiting for the money

Everything federal goes through CAVCO Online. PSTC productions apply for an accreditation certificate, and the claim is filed with the T2 return on Form T1177. CPTC productions apply for Part A with a locked budget and labour figures, then Part B with the finished production, final cost report, and an audit for budgets of CAD 500,000 or more. CAVCO's service standard is 180 calendar days, so plan cash flow on the assumption that the refund arrives well after wrap.

Productions made under an official [co-production treaty](https://storiara.com/glossary/co-production-treaty) are eligible for the CPTC, but they need a separate application and recommendation from Telefilm Canada before CAVCO will certify them. For productions that go through the Canadian content points instead, the [cultural test guide](https://storiara.com/blog/the-cultural-test-how-to-qualify-for-international-film-incentives) explains how content tests like Canada's are scored, and the [cultural test](https://storiara.com/glossary/cultural-test) glossary entry covers the basics.

## Canada against the US options

The closest competitors for a US producer are [New York](https://storiara.com/incentives/us/new-york) and [California](https://storiara.com/incentives/us/california), plus [Georgia](https://storiara.com/incentives/us/georgia) for all-spend shows. Those states pay on different bases, and the exchange rate moves the comparison from month to month, so compare on the actual budget. Our piece on [shooting overseas](https://storiara.com/blog/tax-incentives-and-global-film-production-why-shoot-overseas) covers the tradeoffs, and the [incentives hub](https://storiara.com/incentives) lists every jurisdiction.

## Frequently asked questions

### What is the minimum budget for the Canadian PSTC?

The CRA guide says a production's total cost must be more than CAD 1,000,000 in the 24 months after principal photography begins. Series episodes must cost more than CAD 100,000 if under 30 minutes, or more than CAD 200,000 otherwise, and each episode is tested on its own.

### Can you claim both the CPTC and the PSTC?

No. The CRA allows one federal credit per production. Canadian-certified productions take the CPTC at 25%, and everything else takes the PSTC at 16%. Either can be combined with provincial credits.

### Does a provincial tax credit reduce the federal credit?

Yes. The CRA treats provincial film tax credits as assistance, and assistance comes off the labour base before the 16% federal PSTC is calculated.

### Which Canadian province has the best film tax credit?

It depends on how your budget splits. British Columbia pays 36% on BC labour only. Ontario pays 21.5% on all Ontario production spend. Quebec pays 25% on all Quebec spend with a 16% bonus on VFX and animation labour. A labour-heavy shoot tends to favor BC, a spend-heavy one Ontario or Quebec.

## Sources

- [CRA: Film or Video Production Services Tax Credit, guide to Form T1177](https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/rc4385/film-video-production-services-tax-credit-guide-form-t1177.html)
- [CRA: Canadian film or video production tax credit overview](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/film-media-tax-credits/canadian-film-video-production-tax-credit-overview.html)
- [CRA: Film or video production services tax credit overview](https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/film-media-tax-credits/film-video-production-services-tax-credit-overview.html)
- [Canadian Heritage: Film or Video Production Services Tax Credit](https://www.canada.ca/en/canadian-heritage/services/funding/cavco-tax-credits/film-video-production-services.html)
- [Province of British Columbia: Production services tax credit](https://www2.gov.bc.ca/gov/content/taxes/income-taxes/corporate/credits/production-services)
- [Province of British Columbia: Film and television tax credit](https://www2.gov.bc.ca/gov/content/taxes/income-taxes/corporate/credits/film-tv)
- [Ontario Creates: Ontario Production Services Tax Credit](https://www.ontariocreates.ca/tax-incentives/opstc)
- [Ontario Creates: Ontario Film and Television Tax Credit](https://www.ontariocreates.ca/tax-incentives/ofttc)
- [SODEC: Quebec refundable tax credit for film production services (fact sheet, March 2026)](https://sodec.gouv.qc.ca/wp-content/uploads/fact-sheet-quebec-pstc-2026-march.pdf)