In the topsy-turvy world that is Hollywood location shooting, Canada got a break this week: cash-strapped New York State ran out of money to fund its popular tax credit program.

‘Due to the program’s enormous success, the allocated funds for this tax credit incentive have now been exhausted,’ the Empire State Development Corp., which administers a program that got New York City soundstages to record film and TV production in 2008, said Thursday in a statement.

New York’s pain could be Canada’s gain, according to Ken Ferguson, president of Filmport Studios.

He first heard rumblings before Christmas that the major studios were worried over losing New York City tax breaks, and wanted to know about soundstage availability in Toronto.

New York, which introduced a tax credit in 2004 to steer film and TV production away from Canada, set aside US$515 million for tax incentives to 2013.

But the state also tripled its tax credit to 30% of labor costs in April 2008 to keep pace with neighboring Connecticut and its 30% tax sweetener.

The result is the Empire State ran through its tax credit money early, and may not renew the program when the next state budget is unveiled on April 1 as Governor David Paterson tackles a growing fiscal crisis.

Tax breaks brought 19 pilots to New York City soundstages in 2008.

NBC Universal chief executive Jeff Zucker told the AdAge Future of New York City economic conference on Monday that no new pilots will shoot in New York City in 2009 without tax breaks.

Ferguson predicts New York state will likely renew its tax credit, but at a far lower rate to recapture lost revenues.