Hollywood’s Siren Song: Why Canada’s Not the Villain in the US Tax Incentive Debate

A worrying shadow falls across the border as Donald Trump suggests a federal tax incentive to keep film productions in the US. But is Canada really the target of this initiative, or is it just another chapter in the long-standing battle between Hollywood and its northern neighbor?

The data appears to support Trump’s claim that Canada is siphoning off film jobs from the US. Los Angeles County’s film and television sector has taken a hit, with employment down 26% since 2010 and shoot days plummeting by 61% in 2025. However, industry insiders point out that this decline is not solely due to productions fleeing south of the border.

A closer look at the numbers reveals a more complex picture. While it’s true that some US-produced TV series are filming in Canada, others are being made in states like Georgia and the UK. The UK has emerged as a major player in recent years, snagging productions such as Avengers: Endgame.

Canada’s early adoption of tax incentives in the 1990s may be one reason it’s getting singled out. As Jade Miller, an associate professor at Wilfrid Laurier University, notes, “Canada was really large enough that Hollywood took notice and packed up to film in Vancouver in the late ’90s.” This move sparked a backlash from US politicians and industry leaders, who claimed that Canada’s incentives were unfair and amounted to economic theft.

However, this narrative misses that Canada wasn’t just luring away US productions; it was also investing in Hollywood itself. As Miller points out, “Canada put money into Hollywood.” The Canadian film industry has long recognized the value of collaboration with its US counterparts, and tax incentives have been a key part of that strategy.

The global market for production incentives is now crowded, with over 120 programs operating worldwide. US states and countries are increasingly offering their own tax credits to attract productions. As Miller notes, “There was a brief period when Canada stood out from everyone else with the biggest tax incentives, and they were the first there.” Today, the game is more level than ever.

Industry insiders suggest that Trump’s sudden interest in a federal tax incentive may be as much about politics as it is about policy. With midterm elections looming, politicians are looking for ways to boost their economic credentials and appeal to voters. This latest salvo from the White House is part of a broader effort to “save American manufacturing” – a vague but emotive rallying cry.

The US film industry faces a nuanced set of challenges that Trump’s rhetoric doesn’t address. As Cynthia Littleton, editor in chief of Variety, notes, “There is a swell of trying to save American manufacturing, and this is a form of that.” However, the truth is that no single solution will magically restore the US film industry to its former glory.

Canada continues to shine on the world stage, but it’s time for the US to look inward and tackle the real issues facing its own industry. Instead of scapegoating its neighbor, Hollywood should take a hard look at its own business model – one that has long prioritized cost-cutting over quality and creativity. The future of film lies in collaboration, not confrontation.

As the lights dim on another Toronto International Film Festival, it’s time to separate fact from fiction. Canada is not the villain in this story; rather, it’s a symbol of the globalized film industry that the US must learn to navigate – or risk being left behind.