Award-winning Canadian director Rob Heydon is due to begin filming the novel, set in Edinburgh and Dunfermline, on Monday.
He said Scottish Screen, which became Creative Scotland in July, "scuppered" the project and at one stage maintained that the Leith-born Trainspotting author was not Scottish.
Producers of the 3.2 million film starring Lord of the Rings Scottish actor Billy Boyd, Canadian actress Kristin Kreuk and Scots actor Adam Sinclair, have put out an appeal for locals in Ontario who can pass for Scots, to act as extras. They are also seeking businesses and homeowners whose properties could pass for locations in the Scottish capital and the Fife town.
The film of Welsh's Trainspotting, famed for its chronicle of Edinburgh drug abuse, was the most profitable film of 1996.
Ecstasy, a "dark romantic comedy" about a Dunfermline social worker who leaves her husband and becomes involved in the rave scene of the early 1990s, is also tipped for worldwide success.
Mr Heydon, whose films include Go Further starring Woody Harrelson, said: "Part of the consideration for filming in Canada was that they offer very attractive tax breaks, but if we had had equally attractive breaks in Scotland that is where we could have made it.
"But Scottish Screen did everything in its power to disqualify the project, even saying that Irvine Welsh was not Scottish.
"When we questioned them about this they said 'no, no, we meant one of the writers wasn't Scottish'.
"It is challenging to finance the production with this system in place. The structure of the UK film tax credits, Scottish Screen and regional funding bodies made it very difficult despite us trying for many years."
Mr Heydon added: "We got fed up with Scottish Screen dictating what they think is Scotland and Scottish and decided to make it a wholly Canadian film.
"This is a great pity because this is a great story about someone leaving Ecstasy behind for the ecstasy of love."
Some of the movie will be filmed in Scotland but this will be mostly be external shots of areas such as Princes Street and Calton Hill in Edinburgh.
Welsh, who is expected to arrive in Canada on Tuesday, is to make a cameo appearance in the film.
Many films are shot in Canada for financial reasons as it offers tax breaks to movie production companies.
Andrew Brown, director of London-based Intandem which has been appointed international seller for the film, said: "We are very excited to be partnering with the team to bring another of Welsh's globally successful books to the big screen."
A spokeswoman for Creative Scotland said: "Mr Heydon was given as much assistance as was feasible during the preparation of his project. Ultimately he sought and secured financing in Ontario."