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Group of Hollywood unions to investigate tax breaks offered by Canada

A group of Hollywood unions will investigate tax breaks offered by Canada to lure TV and film production north of the border.

The independent Film and Television Action Committee, along with the Screen Actors Guild and several other unions presented a petition Tuesday to the U.S. trade representative alleging that Canada's tax breaks are illegal and cost thousands of American jobs.

"We are asking the federal government to step up and save U.S. film industry jobs," SAG National Legislative Committee Chairwoman Gretchen Koerner said Wednesday.

The petition's backers say Canada harms U.S. workers by offering American studios a federal tax credit equal to 16 percent of their payroll in addition to other tax breaks offered by individual provinces.

Those incentives have lured much TV production to Vancouver and films such as "Chicago" and "Brokeback Mountain." The flow of American production to Canada and other countries is known as runaway production.

The petition effort was denounced by Canadian actors' union, which has been complaining for years about the quantity of American films and TV shows being shown in that country.

"The bitter irony in this dispute is that we are drowning in U.S. product on TV and in the movie theaters," Richard Hardacre, president of the Alliance of Canadian Cinema, Television and Radio Artists said in a statement Tuesday.

"It's difficult to find a Canadian film in a Canadian theater with all the U.S. blockbusters dominating our screens," Hardacre said. "Yet this upstart organization has the nerve to insist we stop filming in Canada."

FTAC has been pushing for an investigation into Canadian subsidies since 2001, when the group considered filing a complaint with the International Trade Commission and U.S. Commerce Department.

Since then, a number of U.S. states have adopted aggressive tax break programs of their own, helping to lure some film production back from Canada.

FTAC opposes what it calls a "a major subsidy war," according to Gene Warren Jr., the group's executive director. He said he hopes that pressuring Canada to drop its subsidies can "help level the playing field."

The U.S. trade representative has 45 days to decide whether to investigate the complaint.

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