Quebec now offers film producers one of the best tax incentives in North America. All production costs, not just labor expenses, are now eligible for a 25% tax credit.

The provincial government is increasing the tax credit for foreign filming from 25% of labor expenses to 25% of all spending. Because labor expenses usually comprise half of a film or TV production’s budget, this measure could potentially double the tax-credit rebate foreign producers currently benefit from, explains Montreal’s film commissioner Daniel Bissonnette. ‘If they spend $100 locally, whether it’s on construction materials or renting cars, they will get 25 % back,’ says Bissonnette.

The new rules make Quebec the most lucrative option for foreign producers; Ontario and B.C. offer a 25% tax credit, but only on labor costs.

Like Ontario, Quebec’s film and TV production industry has been slow for the past few years, because of state tax incentives and the parity of the American and Canadian dollars in 2008. There was only $65 million of Hollywood production in Quebec last year, down from $265 million the year before.

Will other provinces bring in similar tax rules? ‘All provinces are going to have to take a look at what Quebec has done. Ontario can’t ignore it,’ says Ken Ferguson, former boss of Toronto’s Filmport. ‘What’s always a concern is the race to the bottom. What was killing us were U.S. tax credits, but the current economic situation has wrestled this under control somewhat, some jurisdictions are reducing their credits,’ says Ferguson.

‘It’s a bit of a surprise seeing a province jump forward with such a major initiative.’