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Is Canada a threat to the US film industry? The Screen Actors Guild seems to think so.

The actors' union has signed on in support of a federal investigation exploring whether Canadian communities have unfairly pulled productions out of the US. A petition signed by union officials and presented to the US International Trade Commission and the Commerce Department claims that film subsidies north of the border are illegal and have caused "substantial injury" to American workers, primarily in California, by taking work away from them.

Backers of the petition hope to win passage of a Senate bill that would encourage domestic film production through the use of tax credits.

"We need to have a very extensive and thorough examination of the subsidies being offered in Canada and see if there is a determination that these may constitute illegal subsidies under our trade agreements," said SAG's director for governmental relations, Lance Simmens. "We believe focusing attention on this issue in this way will enhance the prospects of passage of legislation on a federal level."

The union has quoted statistics indicating that as much as $3 billion annually in TV and film production goes north, resulting in a loss of as many as 25,000 American jobs. A US government report has put the total much higher, at $10 billion. The figures were questioned by British Columbia film commissioner Mark DesRoches, who dismissed the controversy in a discussion with theLos Angeles Times. "I really think this is a little like the Chicken Little scenario," DesRoches told Times reporter Megan Garvey. The value of film production done in British Columbia last year was $1.2 billion, compared with Southern California's $28 billion. "That's not even apples and oranges," DesRoches joked. "It's watermelons and limes."

While it's true that many films supposedly set in the US are shot in Canada—Toronto is a favorite stand-in for New York—many people in the industry believe that a free market is healthier than one hampered by tariffs and regulations. Some of SAG's industry partners are somewhat taken aback by its America-first stance. "The alliance is not in support of this," said Dawn Keezer, a Pittsburgh film commissioner and head of Film US, a group of 200 American film commissioners. We see it as something that will cost us jobs." Motion Picture Association of America spokesman Rich Taylor agreed, stating "We are in favor of a free market."

The phenomenon of "runaway" productions is partly SAG's own doing, according to some insiders. Last year's protracted strike by commercial actors resulted in a bonanza of shoots for Canada, as production companies sought locations that would let them meet their commitments without crossing picket lines. Many US films have been made almost entirely outside of North America; George Lucas's next installment of Star Wars is in production in Australia. The problem may not be Canada at all, but the high cost of labor, real estate, and compliance with environmental and safety regulations in Los Angeles, the capital of the world's film industry.

Smaller film communities have sprung up elsewhere in the US, for instance in Wilmington, NC, where unions aren't as powerful and regulations are more lenient. SAG, of course, isn't campaigning to pull productions out of Wilmington, but union members who hate to leave LA may wish they could. "My fear is Los Angeles could turn into the Rust Belt as far as film production is concerned," said Brent Swift, chairman of the Film and Television Action Committee.