A month has yet to pass since Ontario boosted its labour tax credit for foreign film productions to 18%, but BC's film industry is already on the verge of being wiped out- or at least that's what some industry folks would have you believe.

This isn't the first time that the industry has invoked doomsday predictions and it certainly won't be the last. But taxpayers should hear the full story before allowing their wallets to be pried open.

BC's film industry may have originated from a low loonie and tax incentives, but after 15 years of highly successful productions, it has a reputation that it can stake its hat on. It has an experienced, reliable and skilled talent pool that other competing jurisdictions, like Romania, haven't been able to match. British Columbia and the industry's hub, Vancouver, have a multitude of competitive advantages over the rest of Canada, including Ontario. To list but a few: diverse settings like mountains, oceans, urban centres, year-round shooting, film industry infrastructure, proximity to Hollywood and a growing domestic base.

The Vancouver Sun's Michael McCullough points out that California not only has the world's highest production costs it also has no tax credits. How do they do it That's the question BC's film industry should be asking, rather than looking to taxpayers to buck up.

In BC, the Production Services Tax Credit (PSTC) is a refundable corporate income tax credit. What that means is when a production company is filing a tax return, it can claim 11% of the labour costs incurred while making a film. The credits are then applied to reduce the tax payable and the balance is paid out to the production company. But, here's the catch that McCullough notes, production companies are transitional and have a budget set by their parent (usually foreign) company and operate on a cash-neutral basis. So with no income to report and an eleven percent tax credit, production corporations fare pretty well in BC courtesy of the taxpayer.

The tit for tat tax credit game is one in with only one loser, the taxpayer. There will always be other jurisdictions that will out-subsidize BC. Louisiana offers a straight 20% subsidy for production costs, is that the next industry demand It is not the job of the government to keep up with incentives but the industry's role to remain competitive.

Perhaps the most troubling sign for BC's film industry isn't the increase to Ontario's tax credits but rather its automatic reliance on government to solve their competition woes. Why should BC taxpayers be forced to subsidize an industry that isn't willing to make some sacrifices for itself Why should taxpayers subsidize any industry that isn't competitive And who decides which companies deserve a break

It is a disappointing sign that Colin Hansen's first big move as finance minister will be to bow to industry pressuring after three short weeks. Minister Hansen will surely have many more industry representatives banging at his door before February's budget asking for similar treatment. The floodgates will be open and a new era of corporate welfare will begin to take root.

The demands of the BC film industry are identical to the outrageous transfers of taxpayer money to mega-corporations like Bombardier in Quebec or any of the auto manufacturing companies in Ontario. The best way to end the tax incentive competition is to level the playing field through trade agreements that prohibit unfair and costly tax practices.