Michel Roy, the head of Canada's federal film agency Telefilm, is urging the government to ease restrictions on allowing foreign stars to appear in publicly-funded movies.

Current tax rules require that the lead actor or the second lead be Canadian.

Michel Roy says he believes including more U.S. movie stars would help Canadian movies at the box office, especially the ones from English Canada, which accounted for only one per cent of box office receipts in the country last year.

"We just can't go on this way," Roy told CBC News, noting the industry in Quebec tends to be more dynamic while attracting a local audience, too.

"We need to make changes — in order to make those changes we will have to dare to do new things that at times might shock some people."

Roy understands some Canadians may question why their dollars are underwriting films with American stars but if the movies do well, they also give the Canadian talent more exposure.

Changes could be announced in weeks

Roy says Telefilm - which has plowed nearly a billion dollars into the domestic industry over the past decade - has been holding discussions with officials at Heritage Canada about relaxing restrictions on foreign stars.

Telefilm also wants to alter other guidelines to boost the number of co-productions, which have dropped dramatically in the past five years.

The changes could be announced in "a matter of weeks," Roy said.

"We're so advanced in these discussions and the reception has been very favourable."

Roy won't discuss the details of Telefilm's proposals and the minister of Heritage, James Moore, wasn't available to comment.

With files from Margo Kelly