Liberal Senate amendments strip government of power to deny film tax credits

The senators say they talked it over with Liberal Leader Stephane Dion - whose MPs have abstained from recent confidence votes lest they trigger an election - and were told to "do their job."

Senator Francis Fox said the Senate will send the bill back to the Commons after deleting sections that would allow the minister of Canadian Heritage to deny tax credits to films that don't meet public policy standards.

"What we are proposing are amendments that will protect this vital industry as well as the principle of artistic freedom."

One change will remove a clause that allowed the minister to refuse tax credits based on "public policy" or to issue guidelines about film content. Another would give producers an appeal mechanism if funds are blocked or delayed.

"By making these amendments public at this time, those concerned about Bill C-10 will have the opportunity to review and comment on these proposals before they are voted on," Fox said.

The "public policy" clause drew angry criticism from the film industry, which accused the government of imposing censorship and claimed it would hamstring financing for film and TV productions.

The measures are contained in a 560-page omnibus tax bill and were completely missed by the opposition when it went through the Commons last fall.

They were finally noticed when the bill went before the upper house and triggered the outcry from actors, writers, labour unions and even some municipalities that feared the loss of film business.

A Who's Who of the Canadian film industry, from actress Sarah Polley to director David Cronenberg, trooped before the Senate banking committee to raise fears of catastrophe if the legislation became law.

While the bill is considered a tax measure by the government, and thus a matter of confidence, a government defeat in the upper chamber - where the Liberals have a majority - can't, by itself, trigger an election.

Fox said the amendments are vital.

"Witnesses from all segments of the film industry including producers, writers, directors, and actors as well as civil liberties groups have all agreed that Bill C-10, in its current form, would have a devastating impact on the Canadian film industry," he said. "This view was reinforced by financial institutions, municipalities, and labour groups.

"Everybody in the country is saying this is a terrible bill."

He said it is clear the legislation will ruin the industry.

"Would the government want to destroy the Canadian film industry? Would the government want to destroy the Canadian film industry by making this a confidence motion?"

He said even Conservative senators recognize the bill as a threat to the industry.

"The government now has the opportunity of standing back and saying, 'Well, you know, maybe we went too far.'

"Hopefully they will come to their senses and they will back off and they will say that the amendments make sense."

A spokesman for Canadian Heritage Minister Josee Verner had no comment.