What is the Production Commencement Time (PCT) and how is it determined?
Only eligible labour incurred on or after the Production Commencement Time (PCT) can be claimed for a production. The PCT is the earlier of a) or b):
- is the commencement of principal photography;
- is the latest of the following 3 dates:
- first script labour expenditure *
- rights acquisition **
- 2 years prior to principal photography***
* The date of first script labour expenditure is the date the applicant production company (or its parent corporation****) first incurs an expenditure for salary, wages or other remuneration for the activities of scriptwriters, that are directly attributable to the development by the company of script material for the production. Script material can include a draft script, original story, narration, outline, synopsis, or treatment, etc. It does not include research.
** The date of rights acquisition is the date the applicant production company (or its parent corporation****) first acquires the property on which the production is based.
***The Province introduced an amendment to temporarily extend the claim period by 24 months, whereby eligible expenditures can be claimed up to 48 months, or 4 years, prior to the start of principal photography or key animation (“PP”). To qualify for this extension, the production must have: a) commenced PP after March 15, 2020; b) incurred an Ontario labour expenditure on or before March 15, 2020; and c) must not have applied for a Letter of Confirmation on or before March 15, 2020. Note that a production that applied for a Letter of Confirmation (“LOC”) on or before March 15, 2020 and later withdrew that application will still be considered to have applied for a Letter of Confirmation on or before March 15, 2020. The applicant production company must also file a valid, completed waiver with the CRA for each taxation year prior to PP in which the they claim an OFTTC for the production, and include a completed Ontario Creates Waiver Declaration & Statement of Intent to Claim COVID-19 Extensions (“Ontario Creates Waiver & COVID Statement”) for these taxation years with their application for a Certificate of Eligibility (or with their application for an LOC if the Certificate of Eligibility has already been issued). Alternatively, a production can claim eligible expenditures incurred prior to the year in which PP began in the tax credit claim for the year that PP began. No CRA waiver is required in this case, but companies must indicate that they are applying for this extension when completing the Ontario Creates Waiver & COVID Statement. Please consult the guidelines for further details on these requirements.
**** For the purposes of PCT, ‘parent corporation’ is interpreted to mean a corporation that 100% owns another corporation. If there are two or more shareholders of a corporation, that corporation is considered not to have a parent.