The Canadian province ofSaskatchewan has announced it will boost its labour-based production tax creditto 45% from 35% of total eligible costs for film and television productionsshooting in the region.

The Saskatchewan FilmEmployment Tax Credit (SFETC) can increase to 55% if certain criteria are met,including a new 5% bonus tax credit for mid-sized and large productions thatuse Saskatchewan residents in key positions as well as the established 5% ruralbonus for productions filming 40 kilometres outside of the principal cities ofRegina and Saskatoon. The new tax incentives will be in place by 1 January2006.

At the AFM to woo potentialproductions to the province, Valerie Creighton, CEO and Film Commissioner ofSaskFilm told Screen Internationalthe enhancement and refinements are aimed at increasing production whilebuilding capacity. The province is placing a cap of 25% on the number ofnon-Saskatchewan residents who can qualify for tax-credit support, an effort toslow growth until capacity can catch up. Currently, film production volumeshave been outstripping the local industry's ability to support them.

Saskatchewan's film industrygenerated $68m (C$80m) in the province in 2005, a return of C$6 on every C$1invested in the tax credit. Terry Gilliam's Tideland was one of the higher-profile titles to shoot in theprovince last year

Creighton said that despitethe strength of the Canadian dollar relative to the US dollar, tax credits inSaskatchewan and other Canadian provinces make the country a compelling choicefor US producers. 'Even if the [Canadian] dollar went to 90 cents [US], itwould be a lucrative incentive.' The C$1 is worth $.84 today.