Canadian producers are to get more bang for their buck when they shoot in British Columbia, which has vowed to extend its local tax credit to filmmakers country-wide to draw investment to the province.

Finance minister Colin Hansen said Thursday that the Film Incentive B.C. Tax Credit, which refunds 35% of local labor costs, will now be available to all Canadian-controlled companies, rather than B.C.-controlled corporations.

‘This change will strengthen the industry and is part of our overall effort to encourage businesses to choose B.C.,’ Hansen said in a statement.

Previously, Canadian producers from outside B.C. only qualified along with foreign producers for the Production Services Tax Credit, which provided a rebate on 25% of local labor costs. British Columbia offers tax credits for film, TV, animation, visual effects production and film training to enable producers to offset production activities and expenses.

Hansen said the tax credits help bring $1 billion worth of film and TV production business to British Columbia annually, which sustains 20,000 direct jobs and another 15,000 indirect jobs.

But the western-most province is looking to bolster its domestic sector after a steady reduction in U.S. service production in recent years.

Hansen argued the policy change, expected to be voted on in the provincial legislature in mid-2009, aims to make it easier for B.C.-based companies to access other Canadian markets, and to raise capital outside the province.

Until now, the province offered the production services tax credit to both non-Canadian and Canadian producers to entice big-budget projects with A-list stars that did not qualify for either a CAVCO federal tax credit or the Film Incentive B.C. Tax Credit.

Extending its local tax credit to all Canadian producers will also bring British Columbia into line with other provinces where Canadian producers qualify for a local production tax credit, and foreign producers are eligible for their own production services tax credit.

Once it becomes law, the expanded film incentive B.C. tax credit will apply to productions with principal photography that begins after Dec. 31, 2008.