Ontario Premier Dalton McGuinty has dismissed criticism that his province is drawing production from British Columbia with a new 25% all-spend tax credit.

‘It’s aimed at everyone,’ McGuinty told Playback Daily.

‘Our intention is to make foreign producers an offer they can’t refuse,’ he said, pointing to Michigan, Louisiana and other competing jurisdictions that already offer film tax breaks for all local production expenditures.

McGuinty also denied that Ontario has been fiscally irresponsible by shelling out money to lure foreign film producers and video game developers like France’s Ubisoft to the province in hard times.

‘This is an investment, and when you net out our tax credits, we’re still coming out ahead, in terms of the jobs that we support and the investments that are made in communities,’ he said.

McGuinty added the spin-off benefits from the enhanced tax credits are enabling Ontario film production crews and talent to be more hopeful about their industry, and to spend more freely on local basic goods.

‘And we think those who are bold, particularly during difficult times, stand to benefit when the economy recovers,’ the premier said.

The B.C. industry has expressed surprise and dismay at Ontario’s decision to follow Quebec and introduce a blanket 25% tax credit, and is has already told local and Los Angeles producers that the province will not match Ontario and Quebec with an all-spend tax credit.

B.C. in January 2008 followed Ontario and Quebec in raising its labor-based tax credits from 18% to 25%, but has resisted the latest enhancement to avoid a costly game of one-upmanship between Canadian provinces to lure Hollywood back across the border.

Continuing intransigence by the B.C. government has Ontario producers and studio operators anticipating a significant shift in production out east.

Paul Bronfman, chairman of Pinewood Toronto Studios, sees Ontario’s blanket 25% tax credit as a major game changer.

‘This puts us right up front with Louisiana and New Mexico and all the other states that broadened their tax credit to an all-spend,’ he said.

Dan McLellan, EVP and GM of Deluxe Toronto, expressed optimism about revived foreign production in Toronto ‘because we are desperate for it. The market here in Toronto is going through its most difficult year ever for service work, and we need it.’