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Posted: Sun., Jan. 2, 2005, 2:37pm PT

Quebec ups tax credits to lure film prod'n
Province responds to changes in Ontario incentives

MONTREAL -- The Quebec provincial government is increasing tax credits for foreign film producers to counter a similar tax-credit increase recently unveiled by the neighboring province of Ontario.

On Thursday, Quebec Finance Minister Yves Seguin announced that the province will increase its tax credit from 11% to 20% of labor costs on foreign film and TV productions shooting in Quebec. The change comes a week after Ontario announced a C$48 million ($40 million) package of tax credits to bail out that province's faltering production industry. Ontario increased its tax credit for foreign producers from 11% to 18% of labor expenses and upped its credit for domestic producers from 20% to 30%.

Just a month ago, Quebec government officials were sounding cool to the notion of increasing film tax credits. The cost-cutting government of Premier Jean Charest has been aggressively chopping tax credits for most industries.

But Quebec's Finance Dept. changed its tune rapidly once Ontario brought in its new measure. Following the Ontario announcement, there were reportedly nine Hollywood projects that had been set for filming in Quebec in 2005 that were all of a sudden mulling a move to Toronto.

Montreal down

It has been a dismal year for American shooting in Montreal, with foreign production dropping from a record $316 million in 2003 to an estimated $140 million in 2004. Production in Montreal, as in the other main centers in Canada, has been hurt by the booming Canuck dollar and more aggressive tax breaks elsewhere in the world, including south of the border. Montreal also benefited in 2003 from the SARS crisis in Toronto that led a few foreign productions to relocate.

The increase in the tax credits for filming in Quebec was greeted with enthusiasm by the local industry.


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