Ontario’s tax break will fall short of matching Quebec’s all-encompassing 25% credit, a glitch that may already be sending one project over the border.

In a backgrounder, the province’s Ministry of Finance has laid out the details of its plan to boost the Ontario Production Services Tax Credit, a move first announced in June in a bid to keep pace with the new all-spend tax break offered by Quebec.

The boost, if approved by lawmakers, will see the OPSTC expanded to cover acquisition or rental of tangible properties such as equipment, studio rentals and software.

But it will not cover less tangible expenses such as meals and entertainment (apart from on-set catering) or hotel accommodation, the ministry now says.

It will also not cover costs for travel out of the province.

Toronto-based producer Don Carmody, speaking to Playback Daily during a TIFF party hosted by the Ontario Media Development Corporation, says that because those costs will not be covered by the 25% OPSTC, he will likely shoot his Silent Hill 2 in Quebec.

Carmody (Chicago, Silent Hill) says the difference gives la belle province and B.C. a significant advantage over Ontario in attracting shoots. Tax changes have been central to the recently increased competition between the provinces.

Carmody’s Resident Evil 4 is facing budget issues and is due to start principal photography in nine days — making it too late to move the production.

The proposed changes would apply to expenditures incurred after June 30, 2009.