Conservative Leader Stephen Harper's promise to reverse plans to scrap tax credits for productions deemed offensive to Canadian viewers came as a pleasant surprise Tuesday to those in the film and television business and a major blow to the religious right.

"The arts community, I think, can almost relax and unpack their bags," actor Gordon Pinsent said in a telephone interview with the Canadian Press.

Pinsent said he never would have expected such a change of heart from the Conservatives, and he wondered whether it means Harper may be open to other new ideas.

"This flexibility shows he can be flexible again."

Harper revealed the change of heart as part of his party's much-anticipated election platform.

While Pinsent suspects the decision, which came just a week before the election and with the Conservatives flagging in the polls, was largely political, he said he'll take what he can get.

Harper may be hoping the reversal will help his party at the ballot box on Oct. 14, particularly in Quebec, where opposition to Tory cuts to cultural programs has been the fiercest in Canada.

The controversial changes to film and television tax credit eligibility were folded into a massive, 569-page, highly technical tax reform bill that passed in the Commons earlier this year despite widespread protest.

Plan would've killed growing industry: producer

The government argued the provision was needed to keep tax dollars from funding objectionable productions, and Heritage Minister Josee Verner was to spend the next year consulting with industry to find a formula for assessing taxpayer-subsidized productions.

A film about the sex lives of young singles entitled Young People F---ing  — which coincidentally comes out on DVD the day of the election — became a lightning rod in the debate over the bill.

Producer Steve Hoban called Tuesday's decision "good news all around" and a sound economic move, given the worldwide market meltdown.

He said the plan would have ultimately killed the domestic film industry at a time when it's growing and generating billions in economic spinoffs.

"It would have been a really dumb move to do that to an industry that's actually contributing to our economy," he said.

"What this would have meant is that banks would not have known for certain whether productions would get that tax credit or not and if a production was not certain to get it, the bank couldn't guarantee it.

"If a bank couldn't guarantee it, it meant we wouldn't have that chunk of financing to make the films with in the first place.

"There would be 140,000 people thrown out of work immediately, and there would be billions of dollars of economic benefit to Canada disappear overnight."

Change comes too late

While the tax credit received for his last, highly controversial, $1.5-million film was just under $100,000, his next movie will benefit from a $1.3-million tax credit deemed integral to the production.

With a price tag of $26 million, Splice, starring Sarah Polley and Adrien Brody, is among the most expensive films to come out of Canada. Hoban said $20 million of it was raised outside the country but will be spent locally.

"It's an investment in our economy, it's not a handout," Hoban said of the tax credit.

"I don't think [the Conservatives] will be more friendly to the arts but what [this experience] will hopefully have done is opened their eyes .… Arts contribute not just to the culture of this country but to the economy of this country."

Jean-Pierre Lefebvre, of the Quebec directors' association, was pleased the tax cuts are being saved but predicted the move is coming too late to help the Conservatives in the key Quebec battleground.

"This will absolutely not appease the artistic community, which has suffered all these cuts without consultation and without reason," he said, referring to deep cuts to arts funding that were announced previously by the government and which have drawn fire in Quebec.

Harper abandoning conservative base: McVety

Still, the abrupt change in Conservative strategy did not please everybody. Prominent evangelical leader Charles McVety, who boasted last winter that his lobbying for "conservative values" had influenced the Harper government's decision to include the tax provision, suggested Tuesday's move was little more than a desperate play for votes.

"Unfortunately I think the prime minister is pandering to some vocal people and in turn abandoning his conservative base," he said.

"Now you have four parties that are all socially left so who do you vote for?"

McVety said Harper has repeatedly forsaken his social conservative values in funding the CBC and reversing his decision to support a controversial private member's bill that supported unborn victims of crime.

"When you abandon your principles on one issue, people don't believe you'll maintain other principles and Stephen Harper fought for these issues over an extended period of time and then the polling numbers go down and he rolls over," he argued.