Filmmakers, actors and writers across Canada took a turn in the critics' chair Friday, attacking a government plan to limit tax credits for films deemed "offensive."

Bill C-10, which is in its third reading in the Senate, would pull the plug on tax credits -- and therefore massive amounts of funding -- on films the Department of Heritage finds to be morally lacking.

The country's actors union has demanded the government drop the plan, and the national writer's union is planning a protest. The Director's Guild of Canada says the plans will give the heritage minister the ability to censor projects that don't fit with the Conservative government's political agenda.

"It's a provision that's wide enough to drive a bus through," Brian Anthony, the executive director and CEO of the Director's Guild, told CTV Newsnet on Friday. "It will have a chilling effect on artistic expression and ... investment in film and television production in Canada, which is already under-resourced."

The problem, said Anthony, is that government approval comes at the end of the fundraising process, so investors may be afraid to commit money to anything that has the possibility of getting a last-minute veto.

"You could go all the way through the process only to discover at the back end that you have been denied certification," he said. "We feel there are enough checks and balances already available to the federal government to determine what it will or will not support... It's called the Criminal Code."

Lauded filmmaker David Cronenberg has spoken out about the bill as well, saying the kind of edgy films that give Canada an international reputation as an innovator would soon become things of the past.

NDP House Leader Libby Davies brought up the issue in Friday's Question Period, accusing the government of contorting a bill that had already been approved in the House of Commons "to suit their friends from religious right."

However, Conservative MP Jim Abbott, Parliamentary Secretary to the Minister of Canadian Heritage, said the bill does nothing to obstruct filmmakers -- it just stops the government from footing bills for films that don't fall in line with Canadians' morals.

"Filmmakers are free to make movies as they see fit as long as they are within the law," he said. "Canadian taxpayers should not be forced to pay for material that is gratuitously violent or denigrating to identifiable groups."

The Conservatives were also quick to remind the Liberals that their party introduced a similar measure four years ago, and that the current bill passed through the House with all party support.

Charles McVety, an evangelical minister and head of the Canadian Family Action Coalition, claimed responsibility for the measure, telling Newsnet his group had been pushing the government to cut such funding.

"For a number of years we've been objecting to the Canadian government taking hard working taxpayers' dollars and putting them into (offensive) movies," he said.

However, later in the day on Mike Duffy Live he shrugged off the credit, saying most Canadians would agree with this type of legislation.

"It's nonsense that they're doing this because of pressure from the religious right, they're doing it because it's the right thing to do," he said. "David Cronenberg is saying this is some kind of charter right. It's no charter right for the government to give people millions of dollars to make smut movies."

Films that would not have been made if the current bill had been law earlier include Lynne Stopkewich's lauded necrophilia film "Kissed" and edgy Atom Egoyan thriller "Where The Truth Lies."

With a report from CTV's John Vennavally-Rao