Is Canada’s reputation for the stability of the film tax credit about to collapse?
The question has arisen after the energy-rich province of Alberta cut by $35 million to $60 million the province’s expected funding for the Film and Television Tax Credit to support domestic and foreign producers who film locally. The western Canadian province, home of the popular HBO drama The last of us It was filmed during its first season, and he says no foreign film or TV series he looks to shoot locally in the future will be turned away.
“The film and television tax credit remains well funded at $60 million,” Hunter Burrell, press secretary for Alberta’s Ministry of Jobs, Economy, Trade and Immigration, said in a statement. Hollywood Reporter. This follows Alberta’s announcement on February 28, in its most recent provincial budget, of a “$35 million reduction in the Film and Television Tax Credit” as it shifted expected funding from the FTTC to other government departments to drive economic growth.
“Reducing the amount allocated in the 2026 budget allows the ministry to increase funding for other programs instead of not using it for the FTTC,” Burrell added. As a lead, MGM Television Studios recently announced an eight-part television drama for MGM+ based on a reimagining of the 1960 Western. The Magnificent Seven Star Matt Dillon will begin production in Calgary, Alberta in June 2026.
It is understood the Hollywood studio is not anticipating any disruption to its plans to film in Alberta as it awaits written confirmation that the province will fulfill its promise on a future FTTC rebate to MGM. The Alberta Federal Trade Commission offers a refundable tax credit on qualifying production and labor costs, at rates of 22 per cent or 30 per cent, depending on the volume of major production taking place in the province.
But while the FTTC cut projections were put forward as an accounting measure, rather than a cap on the program, the budget line move reflects an energy-rich Canadian province that relies on oil exploration and drilling revenues and is grappling with declining tax revenues to fund government expenditures. A sharp decline in global oil prices ahead of this week’s Middle East war has squeezed Alberta’s tax revenues to the point that the province now projects an operating deficit in each of the next four years.
Dylan Pearce, an Edmonton-based independent producer and board chair of the Alberta Media Production Industries Association, said the $35 million reduction in the planned provincial support for the film and television tax credit should not affect domestic and foreign producers because it only impacts the amount of funding Alberta has allocated to the film tax credit program based on fluctuating production levels and payments on the FTTC in recent years.
“There is no actual reduction in funding,” Pierce said. “It is an estimated number.” THR. Alberta paid domestic and foreign producers through the FTTC $26.7 million in 2023, then $103.3 million in 2024, before paying $55.3 million in 2025.
The ebb and flow of support for the film tax credit has come at a time when Alberta has attracted filming shoots in foreign locations for American television series such as the HBO series. The last of uswhere the zombie apocalypse drama turns Calgary and other regional locations into dystopian wastelands. This increase in production coincided with a rise in global oil prices, briefly reaching $120 per barrel in the spring of 2022.
Alberta has also hosted Western-themed dramas like Netflix Abandonment and Fargo And Prime Video Billy the Kid Season 2, The county provided American producers with diverse rural areas such as mountains, badlands, prairies, and foothills. But global oil prices have since fallen back, leaving Alberta without windfall tax revenue to invest in attracting Hollywood to produce locally.
“Although the budget announcement was not what we had hoped for, ACTRA remains committed to collaborating with government and industry stakeholders to ensure Alberta continues to be viewed as an attractive and competitive place to film and to prioritize the growth and participation of our skilled local artists,” Blair Young, president of ACTRA Alberta, which represents local union artists, said of the FTTC’s $35 million cut in a statement.
That’s because Alberta has become timid about breaking the bank to keep up with competing jurisdictions like British Columbia and Ontario where generous film tax breaks continue to attract American producers seeking foreign locations as part of production hubs in Vancouver and Toronto. ““The outlook is always risky, but it seems likely that Alberta will lose productions to jurisdictions that offer a better deal,” says Charlie Keel, a senior professor at the University of Toronto’s Film Studio Institute. THR.
He adds that the war currently underway in Iran and the surrounding oil-rich Gulf states could raise oil prices to the point that Alberta, a major oil producer on its own, would have more tax revenue to allocate to film tax credits and other production subsidies. But until then, Alberta, which prides itself on being fiscally conservative, will manage expectations about whether Hollywood can film locally to keep creatives and crews in the province busy.
“Most Canadian production centers cannot survive on domestic products alone,” Keil added. “So what will Alberta do to make sure its production infrastructure doesn’t go fallow? The sunk cost investment — not to mention the fake revenue that comes from visiting production staff spending money in Alberta — will be wasted, so that loss has to be part of the calculation.”
While the first season of the popular video game on HBO is an adaptation The last of us Alberta was used for extensive location filming, and Season 2 saw production largely move from Calgary to Vancouver, where Season 3 of the locally popular series begins this week. On Canada’s west coast, most film and television production is represented by service productions where a Canadian company produces an American or foreign project for a fee, often without retaining royalties.
This makes foreign producers taking advantage of film tax credits crucial whether they establish locally, or go to a competing jurisdiction with more generous incentives, and local producers have to pick up the slack to keep theaters and locations buzzing.
