One of the biggest players in the film and media sectors in Nova Scotia says his company will leave the province if the provincial government follows through on proposed changes to the film tax credit.

David Regan, the executive vice-president in charge of corporate development for DHX Media, says if the film tax credit is slashed, work associated with This Hour Has 22 Minutes — produced by DHX Media and airing on CBC Television — would be relocated to another province.

The provincial government announced Thursday that as of July 1, the film industry tax credit will only cover 25 per cent of eligible costs, allowing film companies to claim the other 75 per cent of the credit against taxes they owe to the province.

Eligible costs, including up to 65 per cent of salaries, can be fully refunded as it stands.

"Though it may seem as a reduction, in fact it means that it's not bankable, therefore we can't borrow against it. So we can't greenlight shows," said Regan.

His comments were echoed earlier on Friday by Michael Donovan, the executive chairman of DHX Media. It now owns Family Channel as well as some Disney services in Canada. DHX employs 175 people in Nova Scotia. 

"Our heart is in Halifax," Donovan told CBC's Information Morning.

"It's terrible, destroys the industry in Nova Scotia," he said.

si-inspector-gadget-dhx-300

Children's show Inspector Gadget is among the offerings on DHX Media's new paid YouTube channel. (DHX Media)

"We could have done much more in Nova Scotia over the years but the Finance Department, at the bureaucratic level, has been angling to get rid of this tax credit. Basically, since it started they hated it because they're bean counters."

Finance Minister Diana Whalen says the industry is exaggerating the benefits the credit brings to the province.

"Even if you added in double what we think is the return on a tax dollar, you're still a long way away from the dollar value that the industry is saying," she said.

"My point is really about the fact that with a compelling need to balance the budget so that we can do better with health care, with autism, with childcare, with educational needs — with that compelling argument we have to look so hard at what we're offering to all industries."

Donovan points out New Brunswick cancelled the tax credit in 2011, only to pledge "additional investments" in the film sector this year.

"Big vote getter, everybody being tough but dumb, hurt the province. Now they put it back. That's the real trend," he said.

Screen Nova Scotia says in 2013, film and television productions in Nova Scotia generated the equivalent of 2,700 full-time jobs and $139 million in spending.

The Department of Finance says 99 per cent of all productions shot in Nova Scotia pay zero tax.