With confusion still surrounding the status of Australia's tax laws for film investors, Canada could profit from international productions seeking an alternative tax-friendly location - especially now that its provinces are offering special incentives.

The weakness of the Canadian dollar, skilled crews and good locations have long drawn foreign and local productions to the cities of Toronto, Montreal and Vancouver and the central provinces of Ontario and Quebec. However, some producers, domestic and foreign, are now looking to other parts of the country as possible locations, both to save money and take advantage of Canada's beautiful and varied scenery. Many of the country's 10 provinces and three northern territories see opportunities for economic growth in offshore productions and co-productions. As a result, they are offering producers special incentives.

"Canada has become a much higher-priced place to film," says independent producer Sandra Cunningham, co-producer and line producer on Alliance Atlantis' Ararat. "It is the double-edged sword of being a location for offshore US production. You can't film in Toronto, Vancouver or Montreal the way you used to. It is a seller's market and when the demand is there, people will pay."

Alberta-based producer Chad Oakes of Nomadic Pictures agrees. "Vancouver has the advantage of great crews, both union and non-union, and it has great locations. But it is very busy there and sometimes it is hard to crew up with good crews. It is very expensive there and [in Montreal and Toronto] compared to other parts of the country, like Alberta, which I think is the most untapped area of the country."

That expense is one of the main reasons for going to other Canadian locations, such as the four maritime provinces on the Atlantic Coast, a region that offers historic Loyalist/Acadian architecture, lighthouses and windmills, red clay beaches, rugged shorelines, pastoral vistas and the historic cities of Halifax, Fredericton and Charlottetown. Films shot in the region include New Waterford Girl, Margaret's Museum, The Divine Ryans, Misery Harbour and Deeply.

The most easterly province is Newfoundland, with its fjords, whales and fishing villages. Its capital, St John's, is a seaport with rows of multi-coloured wooden Victorian houses. The province was recently the locale for majority US production The Shipping News, which wrapped in June and is based on the Newfoundland-set Pulitzer prize-winning novel by E Annie Proulx. The location was selected because no other part of the world could substitute for Newfoundland, according to Chris Bonnell, director of programmes for Newfoundland and Labrador Film Development Corp. Bonnell admits the province cannot serve all types of productions, since it does not yet have a soundstage (but probably soon will) and because most equipment has to be brought in from Halifax, Nova Scotia. But while the industry is developing in Newfoundland (production jumped from $1.3m [c$2m] in 1995 to $12.9m for 2000), incentives are in place to build crew and attract productions. For example, the Newfoundland tax credit allows for a 40% rebate on the money spent on either local crew or on imported keys engaged in training locals. Similar programmes run in other provinces.

Another option for would-be film-makers is Western Canada, with its prairie provinces of Saskatchewan and Manitoba (productions include Desire, Nostradamus, Law Of Enclosures and Cord), both of which have combined public-private initiatives to build up crews. Next door, the province of Alberta is home to the 3,700m-high Canadian Rockie Mountains, rolling hills, prairies, desert and badlands rich in dinosaur fossils.

The site for such films as Unforgiven, Heaven And Earth, Cool Runnings and Legends Of The Fall, it has a more developed film industry with a complete studio production centre and five full crews, while still offering locations that are less expensive than the bigger centres. That is why Oakes chooses to be based in Calgary, the province's largest city. For most of the shoot of his latest feature, Snowbound (pictured), he decided to go further afield to the Yukon Territory with its mountains, tundra and days of almost 24-hour sunlight. And lots of snow.

"Yukon locations cost next to nothing and the local government bends over backwards for you," Oakes says. "The Yukon Film Rebate Program gives a tax credit of up to 35% on the cost of labour. Another incentive to go up there is that there is a certain reimbursement on the cost of flights and accommodation of crew, whether it is a Canadian project or not."

Like other smaller centres, disadvantages include the lack of equipment and crew. The Yukon only has about a half crew. All electrics and camera equipment have to be shipped by tractor trailer from "down south' - Calgary or Vancouver.

"For Snowbound, we had to ship three tractor trailers of equipment, and fly up 30 crew members. But it was worth it for the setting - and the price was right," says Oakes.