Liberal senators say they plan to amend the film-financing section of the government's omnibus tax legislation, Bill C-10, which has been opposed by the movie industry.

Senators Francis Fox and Wilfred Moore made the amendments public on Wednesday.

The proposed changes would:

• Remove the right of the heritage minister to refuse tax credits based on "public policy" or to issue guidelines about film content.
• Give producers an efficient judicial appeal mechanism if the minister blocks or delays funding.
• Continue to prevent government funding of pornography, child pornography, and hate propaganda.

The senators said they plan to send the amended clause back to the House of Commons for final approval. That is unlikely to happen before the fall. Senators are still going over other clauses in the bill and will only be ready for a committee vote and a Senate-wide vote after the summer recess ends, according to Liberal party spokesman Marc Roy.

The Conservatives have said passing the bill, which contains hundreds of amendments to Canada's tax laws, is a matter of confidence in the government. That means an election could be triggered over the Liberal amendments.

Liberals in the Commons allowed the bill to pass last fall, but at that point nobody had noticed the controversial clause involving film financing. The clause would allow the government to withdraw tax credits from movie productions determined to be “contrary to public policy.”

"What we are proposing are amendments that will protect this vital industry as well as the principle of artistic freedom," Fox said in a statement released by the Liberal party.

In a news conference Tuesday, Fox said Liberal Leader Stéphane Dion has encouraged Liberal senators to make the necessary changes and has pledged support in the House.

A stream of film-industry people and groups opposed the bill during Senate hearings this spring.

They said it would give a small group in the Heritage Department the latitude to censor Canadian films and would lead to the collapse of the film funding system, where bank financing is often contingent on getting tax incentives.

"Witnesses from all segments of the film industry, including producers, writers, directors and actors, as well as civil liberties groups, have all agreed that Bill C-10, in its current form, would have a devastating impact on the Canadian film industry," Fox said.

"This view was reinforced by financial institutions, municipalities and labour groups."

He said he doesn't believe the Tories will make a change to a single clause a matter of confidence.

"Everybody in the country is saying this is a terrible bill," Fox said. "It's going to have the consequence of shutting down the Canadian film industry.

"Would the government want to destroy the Canadian film industry? Would the government want to destroy the Canadian film industry by making this a confidence motion?"

These amendments give the government the chance to reconsider what it may well now consider to be hastily conceived legislation, he said, adding that even some Conservative senators have doubts about the film provisions.

Canada's actors union, ACTRA, issued a statement Wednesday saying it was "relieved" at the proposal to fix Bill C-10.

"We'll be looking at these amendments in detail and consulting with our partners in the film and television community to ensure that these fixes insulate our industry from uncertainty in film financing and that they remove the threats to artists' freedom of expression," said ACTRA executive director Stephen Waddell.

With files from the Canadian Press