The Canadian government is planning to increase the labour-based tax credit available to local film and television producers.

The long awaited move follows up an increase to the tax credit available to off-shore producers in February 2003.

The changes are designed to boost Canadian production and to increase Canada's attractiveness as an international coproduction partner. The announcement was made on Friday following a leak to the media.

Under the new regime, the Canadian Film and Video Producers Tax Credit (CFVPTC) will provide a tax credit equal for Canadian labour costs up to a maximum of 60% of the budget spent in Canada, up from 48%.

The government will also classify any equity it holds in a production as assistance rather as part of the budget, thereby enhancing the potential benefit of the tax credit.

In a statement, Canadian Film and Television Production Association acting president and CEO Guy Mayson said, ""While foreign location shooting is important, we can't have the domestic industry at a disadvantage. I think the government has helped fix that."

According to the CFTPA, the new credit will "provide assistance up to 12% of the cost of production, net of assistance."