MONTREAL — In order to sweeten its brand as a one-stop shop for foreign producers, the Quebec government has made post-production work in the province 20% cheaper.

In what will likely be a boost to the province’s burgeoning effects industry, the minister of finance, Raymond Bachand, has increased the tax breaks on computer-aided special effects and animation for foreign productions.

Foreign shoots can now deduct 20% of labor costs — up from 5%. The change is effective retroactively from June 12, 2009, when the government introduced its new ‘all spend’ tax credit, which allows producers to claim 25% of all production-related expenses.

The recent changes for post-production work are not ‘all spend’ — only qualified labor costs are eligible — but it now allows producers to deduct the money spent on freelancers. Extending the tax credit to contract workers is key because so many effects shops can only afford to hire on a project-by-project basis, explains the Quebec Film and Television Council’s Sylvain Gagné.

‘It’s a big plus. Many effects shops have to hire temporary employees when they get a project. Before only salaried employees were eligible for the tax reduction,’ says Gagné.

Likewise, British Columbia moved last week to increase its tax break on effects and video game production.

The new tax credit may help stabilize the Montreal industry, which has been struggling to compete with India, Asia and the U.S. for special effects contracts. Because the competition is global, and the work sporadic, companies lowball bids to get work and then hire dozens of salaried employees to complete a project. In Montreal, the employees don’t always get paid right away.

Since 2007, effects artists have gone to Quebec’s labor standards commission twice to fight for back pay from two shops that worked on blockbusters that ultimately grossed hundreds of millions of dollars, Meteor Studios and damnfx.

But the new tax credit may only serve to increase the precarious nature of effects work for the artists themselves by making freelancing the industry standard. Quebec effects workers aren’t represented by the province’s two main unions, AQTIS and U.S.-based IATSE, whose members work mainly on American service shoots.