It’s going to take more than a little CGI to fix Québec’s visual effects (VFX) industry.
Catch-up: On May 31, Québec enacted a 65% cap on tax subsidies that foreign production studios receive for contracting Québec-based VFX and animation companies to work on projects. The province believed that keeping tax credits uncapped was growing too costly.
Driving the news: Québec VFX and animation firms are now teaming up to lobby the province to change tax rules again ahead of next year’s budget to reinvigorate their industry.
- Aside from raising the cap, one proposed solution is to add a stipulation to contracts that foreign studios must employ a minimum of 40% to 45% of Québec-based workers.
Why it matters: The tax subsidy system was the driving force behind Québec’s ascent as a global hub responsible for VFX on countless movies, shows, and games — including recent mega-hits like Barbie — generating $8 billion for Québec’s economy last year alone.
Bottom line: The cap plus last year’s Hollywood strikes has left the industry near collapse. Recent grads are unable to find work, studios estimate a 63% dip in revenue next year, and the number of employees in the industry dropped to 3,100 this year from 8,000 in 2022.—QH