Vancouver: Answering threats of an exodus from the West Coast, the B.C. government announced on Jan. 20 that it will match the recently increased service and domestic tax credits of Ontario.

B.C.’s labor tax credit for service producers has jumped from 11% to 18%, on par with Ontario levels and just two percentage points below the recently boosted credit for Quebec. Domestic producers in B.C. saw an increase in labor credits from 20% to 30%.

The changes are retroactive to Jan. 1 and will be made official in the provincial budget, to be delivered Feb. 15. The credits will be in place until March 2006, after which the province will review the results.

‘The film industry is an important and vibrant part of our economy,’ says Colin Hansen, B.C.’s minister of finance. ‘The tax-credit changes… are just one part of a larger effort to ensure British Columbia remains one of the best places in the world for film production.’

Long frustrated by B.C.’s tax climate, about a half-dozen producers threatened to pull up stakes for Ontario when that province boosted its credits in December – putting the B.C. Liberals, who are facing an election later this year, in a tight spot.

The boost means B.C. producers can ‘keep their projects filming in our province and continue to build our industry,’ says Julia Keatley, chair of the B.C. producers branch of the CFTPA and producer of the domestic drama Godiva’s for CHUM.

‘We’re extremely pleased,’ says Peter Leitch, chair of the Motion Picture Production Industry Association of B.C. ‘[The increase in tax credits] shows the government continues to be supportive of this industry. We clearly understand that the industry has an obligation to be competitive. We’ll be working hard over the next 12 months to remain the first choice as a film production base.’

Brightlight Pictures, the company that led the most recent charge for more favorable credits, says it will keep its US$50-million video-game adaptation Dungeon Siege, and its 300 jobs, in Vancouver this summer. The company had threatened to shift the picture and another US$50 million in production to Ontario.

‘We love living in Vancouver and don’t want to leave this market,’ says Steve Hegyes, a Brightlight principal. ‘The attention that the provincial government has taken to this issue not only saves jobs in the local film and television industry but many other spin-off industries, from transportation, hotels and restaurants to the trades.’

Vancouver producer Larry Sugar of No Equal Entertainment also considered moving at least five series worth US$110 million, including CHUM drama The Collector. He might have had trouble following through on that threat, however, given that CHUM’s spending levels in B.C. are set, in part, by the CRTC.

And yet the B.C. government hedged its announcement with concerns about the industry’s other issues, including the problems outlined in last year’s Tysoe Report, which slammed some key B.C. unions.

‘The film industry in B.C. has been highly successful,’ says John Les, B.C.’s minister of small business and economic development. ‘But members of B.C.’s film industry recognize continued success cannot depend solely on provincial tax incentives. They recognize the need to enhance competitiveness in areas under their direct control such as labor, location costs, and service levels.’

The B.C. government says it will also consult with other federal, provincial and municipal levels of government to explore opportunities for a more coordinated effort to attract film and television production to Canada.