A Halifax media production house says it may pull out of Nova Scotia after a union collective agreement was imposed on the company.

Egg Films is the first business in the province to have a labour deal imposed under the first contract arbitration law, which imposes arbitrated settlements on first contracts for newly unionized workplaces. Under the law, which was passed by the NDP in 2011, the Labour Board of Nova Scotia can impose a contract when both sides fail to reach a first collective agreement.

"We don't have to be here. We chose to be here. We wanted to do something great here and we're not able to do that anymore," Mike Hachey, the executive producer of Egg Films.

"The Labour Board screwed us."

On Sept. 19, members of the International Alliance of Theatrical Stage Performers Local 849 were awarded a contract, two years after unionizing freelance employees at the company.

Egg Films said the first contract will add $38,000 a year in overhead and raise wages by 20 per cent to 30 per cent.

Both Hachey and his wife and business partner Sarah Thomas said the settlement is completely out of step with reality.

"We are looking at a business where revenue is decreasing and profit margins are shrinking. This is not the kind of increase in wage and admin overhead burden that our company can sustain," Thomas said.

"They were able to get a better deal out of the Labour Board and they did it because the Labour Board knows nothing about our business at all," Hachey added.

The ruling does not apply to the 20 full-time, non-union employees of Egg Films. The company is a producer of television commercials for both the private sector and government.

Rivals dismiss plan

Hachey and Thomas attended a campaign event Wednesday with Progressive Conservative Leader Jamie Baillie, who promised to get rid of the law if his party is elected to form government. Baillie said he believes it unfairly allows an arbitrator appointed by the province to force companies to accept wage proposals, even if they can't afford it.

"A Progressive Conservative government will rip up the job-killing first contract arbitration law," Baillie said.

A spokesperson for the Liberal campaign said a Stephen McNeil government would amend the law "to bring it more in line with federal policies wherein parties have to prove that there has been bargaining in bad faith."

"The current form of FCA that exists in Nova Scotia does not allow for the due course of collective bargaining," Kyley Harris, a Liberal spokesman, said in a statement to CBC News.

Frank Corbett, the New Democrat Labour Minister, said the rancour with Egg Films is an "exception."

"First contract works in so many ways. Nova Scotia is already one of the most difficult provinces to get certified. This is a reasonable step. Both sides should be able to meet that test," Corbett told CBC News.

He dismissed Baillie's "right wing Harperesque approach."

"If you give a worker a right he gets angry about it," Corbett said.