1. (1) The definition of “labour expenditure” in subsection 125.4 (1) of the Federal Act is amended by striking out the portion before subparagraph (b) (i) and substituting the following: “labour expenditure” of a corporation for a taxation year in respect of a Canadian film or video production means, in the case of a corporation that is not a qualified corporation for the taxation year, nil, and in the case of a corporation that is a qualified corporation for the taxation year, subject to subsection (2), the total of the following amounts to the extent that they are reasonable in the circumstances and included in the cost to, or in the case of depreciable property the capital cost to, the corporation, or any other person or partnership, of the production: (a) the salary or wages directly attributable to the production that are incurred after 1994 and in the taxation year, or the preceding taxation year, by the corporation for the stages of production of the property, from the production commencement time to the end of the post-production stage, and paid by it in the taxation year or within 60 days after the end of the taxation year (other than amounts incurred in that preceding taxation year that were paid within 60 days after the end of that preceding taxation year), (b) that portion of the remuneration (other than salary or wages and other than remuneration that relates to services rendered in the preceding taxation year and that was paid within 60 days after the end of that preceding  taxation year) that is directly attributable to the production of property, that relates to services rendered  after 1994 and in the taxation year, or that preceding taxation year, to the corporation for the stages of production, from the production commencement time to the end of the post-production stage, and that is paid by it in the taxation year or within 60 days after the end of the taxation year to . .  . .  . (2) Subsection 125.4 (1) of the Federal Act is amended by adding the following definitions: “production commencement time” in respect of a Canadian film or video production means the earlier of (a) the time at which principal photography of the production begins, and (b) the latest of (i) the time at which a qualified corporation that has an interest in the production, or the parent of the corporation, first makes an expenditure for salary or wages or other remuneration for activities, of scriptwriters, that are directly attributable to the development by the corporation of script material of the production, (ii) the time at which the corporation or the parent of the corporation acquires a property, on which the  production is based, that is a published literary work, screenplay, play, personal history or all or part of the script material of the production, and (iii) two years before the date on which principal photography of the production begins. “script material” of a production is written material describing the story on which the production is based and, for greater certainty, includes a draft script, original story, screen story, narration, television production concept, outline, or scene-by-scene schematic, synopsis or treatment. (3) Subsection 125.4 (2) of the Federal Act is amended by striking out “and” at the end of paragraph (b), by adding “and” at the end of paragraph (c) and by adding the following paragraph: (d) an expenditure incurred in respect of a film or video production by a qualified corporation (in this paragraph referred to as the “co-producer”) in respect of goods supplied or services rendered by another qualified corporation to the co-producer in respect of the production is not a labour expenditure to the co-producer or, for the purpose of applying this section to the co-producer, a cost or capital cost of the production.