Canada's Heritage Minister has agreed to consult with the nation's film and television production community in drafting new tax credit guidelines.

The move comes in wake of producers' complaints that proposed amendments to Canada's tax law could threaten their access to production tax credits should a production be deemed 'contrary to public policy'. The lack of precision in what constitutes 'public policy' is at the heart of the matter.

Speaking yesterday to the banking committee of the Canadian Senate, Minister Josee Verner said her department would work with members of the industry to establish qualifications for and application of the amendments over the next year.

That said, the Minister's later statements made clear producers will face a fight over semantics. She said her department would be guided by the principle that there are some productions that may be legal but which tax dollars should not be subsidizing. She said filmmakers' complaints that such provisions are censorious in nature were misguided. 'Producers will remain free to finance their projects without public funding.'

Filmmakers have argued that existing laws, including the Criminal Code and the Broadcasting Act, are guidelines enough. Further, the power to withhold a tax credit, particularly after a production was completed, would create a financial impediment for lenders, effectively inducing self-censorship on filmmakers.

The committee heard that only two films in the past five years would not have received a tax credit had Bill C-10 been implemented at the time. The Minister was not at liberty to name the films due to privacy issues; however she said they were pornographic in nature.