By Etan Vlessing

TORONTO (Hollywood Reporter) - Hollywood is dominating the Canadian box office at the expense of homegrown films, according to a government report.

Telefilm Canada, the federal government's film financier, said Friday the market share for local product fell for the third year running to 2.9% in 2008, against a year-earlier 3.3%. The share was 5.3% in 2005.

While overall box office sales rose to C$919.6 million ($858.5 million) last year from C$857.4 million in 2007, the share claimed by Canadian films fell to C$26.3 million ($24.5 million) from C$28.1 million.

Paul Gross' epic war romance "Passchendaele," which earned C$4.4 million ($4.1 million), was one of only five homegrown films to break the C$1 million ($930,000) mark last year. The others were Quebec films, including "Cruising Bar 2" with C$3.4 million ($3.1 million) and "Babine" with C$2.2 million ($2 million).