Finance Minister Blaine Higgs says the government had no choice but to cut the film tax credit. (David Smith/Canadian Press)

An economic development agency in Moncton, N.B., is hoping the provincial government takes another look at cutting the film tax credit.

John Thompson, the CEO of Enterprise Greater Moncton, says he's worried about the fallout after the tax credit was eliminated in the provincial budget last week.

"We realize the government's had to make some very tough decisions as it relates to this particular budget because of our fiscal situation," Thompson told CBC News on Tuesday.

"At the same time, this is one that we feel that we need to support that industry, especially on a go-forward position here."

One of New Brunswick's leading film and television production companies, Connections Productions, has already announced it will move to Nova Scotia because of the tax-credit elimination.

Part of large spending cut

Premier David Alward's Progressive Conservative government says it is trying to lower the provincial deficit to $448 million by cutting $220 million in spending. The tax credit for the film production industry cost the province $2.7 million last year, down from a high of $4.4 million in 2008-09.

As part of the incentive to the film and TV industry, New Brunswick offered companies a maximum of 40 per cent of salaries paid to New Brunswick residents. The province increased the tax credit by 10 per cent if the film projects were done in rural New Brunswick.

Finance Minister Blaine Higgs said the Progressive Conservatives had no choice.

"It's not easy making tough decisions Mr. Speaker," Higgs told the legislature. " We don't think that fair-minded New Brunswickers believe that we should be subsidizing any industry by 40 or 50 per cent of their labour rate."

But news of the cut continued to spread Tuesday, with The Hollywood Reporter — an international entertainment publication — running an article on the subject.

Ben Champoux, a business development specialist for the City of Moncton, said he's worried about what may happen next.

"You start losing companies and obviously you're going to start losing manpower and brain power as well, so that is a concern."