Vancouver: The B.C. industry let out a sigh of relief last month when the provincial government announced it is extending its film and TV production tax credits to 2008, contrary to the advice of a recent government report.

The credits, which pay back 18% or 30% of labor costs – to foreign and domestic productions, respectively – were set to expire on March 31, but B.C. Finance Minister Carole Taylor announced her decision on Jan. 20, well ahead of her upcoming budget.

‘I know how production financing works. It’s highly competitive and time-sensitive,’ says Taylor, herself a former broadcaster. ‘I wanted to eliminate the uncertainties while we conduct a further review of whether to continue credits beyond 2008.’

Industry-watchers were alarmed late last year when a report released through the Ministry of Economic Development argued that B.C.’s economy would be $45 million richer without the tax credits. Doubts about the credit for foreign shoots put a cloud over the coming spring and summer production season, when so many Hollywood shoots look north.

‘The timing of this announcement was very important. Productions are crunching the numbers now for future shows,’ says Peter Leitch, chair of the Motion Picture Production Industry Association of British Columbia. ‘Now, Vancouver is back on the radar.’

But Taylor, like B.C. Minister of Economic Development Colin Hansen, reminded the industry that it must also take steps to keep the province competitive. ‘Tax credits can’t carry the load,’ she warned. ‘In the past, our people, expertise and locations have been our positives. But we have to be practical.’

The announcement came just hours after negotiations wrapped up between the Teamsters and IATSE, which represent the province’s film crews. The unions had been renegotiating their rates, also a key issue for attracting shoots, though the outcome of those talks, now up for ratification by the union members, has not been made public.

‘The government is doing their part to support the industry, and labor will continue to do what we can, too,’ says Gerry Rutherford, business agent for IATSE Local 669.

The province’s unions have been criticized in the past, most notably in the 2004 report by B.C. Supreme Court Justice David Tysoe, for undermining the province’s production industry with a backlog of grievances and restrictive hiring practices.