Ontario considers tweaking game incentives

Government-funded report advises increasing tax credits to developers, providing $1 million annually to fund new prototypes.

The province of Ontario is home to one-third of Canada's population, but only a fraction of its gaming industry. Whereas British Columbia and Quebec play host to some of the largest third-party publishers and highest-profile studios in the world, Ontario's gaming companies were responsible for just $70 million in revenue in 2006, according to a new article on IT Business.

However, Ontario is hoping to grow that sector considerably, and the article runs down a list of recommended changes to provincial tax incentives made in a recently released government report. Titled Ontario 2012: Stimulating Growth in Ontario's Digital Game Industry, the report advocates hiking the potential tax credits that developers can receive for making games in the province. Currently, Ontario studios that own the intellectual property of the game that they're working on can earn as much as a 30 percent tax credit, whereas their counterparts in Nova Scotia and Manitoba can qualify for 35 percent and 45 percent, respectively.

Nevertheless, not all developers are in favor of that move. The article cites Digital Extremes president Mike Schmalz as saying that he would rather see an easier-to-use tax-credit system, or perhaps one that didn't have the intellectual-property requirement. Schmalz noted that gaming startups frequently seek to sell their IP to publishing partners.

The report also recommends that Ontario set aside $1 million every year to help developers prototype new next-generation console games for publisher pitches. As Secret of Monkey Island creator Ron Gilbert has attested to, funding prototypes can be a major hurdle when pitching a game to publishers.

Other suggestions made in the report include extending the length of time for which developers can claim credits (currently it's limited to three years per project). The report also suggests letting developers claim the credits annually instead of only at the project's end, creating a public-private fund to attract venture-capitalist investment, and using an existing job-creation fund to entice international companies into the province.

In addition to Dark Sector developer Digital Extremes, Ontario also plays host to such notable companies as Silicon Knights (Too Human), Rockstar Toronto (The Warriors), and Digital Leisure (Dragon's Lair).

61 Comments

  • HellaStoned

    Posted Aug 28, 2008 2:14 pm PT

    Ontario is sweet because we throw pot smokers in jail.

  • Phazevariance

    Posted Aug 28, 2008 12:30 pm PT

    Meh, not going to help in the short run.

  • ScottEFresh

    Posted Aug 28, 2008 11:15 am PT

    This is a good start. Considering the amount of tech people and the need for jobs in Ontario, this is a very good idea.

  • -AK47-

    Posted Aug 28, 2008 11:06 am PT

    I LIVE IN MISSISSAUGA ONTARIO. ONTARIO RULES


    not really

  • ranman1990

    Posted Aug 28, 2008 10:52 am PT

    hmm.Now that i notice Ontario doesn't have that many gaming companies. Probably because they spend money on the roads ( that desperatly need to be redone in some parts).Im always glad to see whenever a Canadian gaming company is working on a videogame. The only ones that are actually worth playing are the prince of persia games lol. But no in all seriousness we should get more gaming studios in Ontario.

  • Permafried-

    Posted Aug 28, 2008 10:40 am PT

    There's more than one reason game companies struggle in Ontario and its not strictly due to funding. Living in London, Ontario we have the likes of Digital Extremes just down the street from my work, and there was an interesting article in the paper some time ago how game developers are complaining they are unable to find the young talent to grow their companies.

    As a software developer I can say this is not due to a lack of young developers in the area, there's UWO and Fanshawe College both of which put out talented young engineers (developers, whatever you want to call it) with a good number of them more than willing to work for a game developer, but there's one thing standing in the way.

    On one hand, these developers want years of experience in the industry with at least X number of shipped products and a bachelor's in this, that and the other course. On the other, they want the young, innovative talent to drive their companies forward and keep the fresh ideas rolling. Here is where the problem is, you can't find young, ambitious talent out of school who have X years of experience with a shipped product..make up your mind.

    I forget who said it below, but instead of soaking my tax dollars into an aging game development workforce (which will continue to age as long as developers set their recruitment standards as high as they do), how about we put it towards some of the shortcomings our province has today which would be for the greater benefit of all, and not just a means to bringing in additional dollars in taxes, exports, etc. which will go towards wasted programs and incentives.

  • Dixteel

    Posted Aug 28, 2008 8:23 am PT

    Indeed i found it really wierd that Ontario doesn't have many game developers, and comparing to BioWare in Alberta, Relic and EA in BC, UbiSoft in Montreal, the development companies in Ontario seem smaller as well...just another example showing more people doesn't necessary mean more success in certain field, perhaps?

  • grand17

    Posted Aug 28, 2008 8:06 am PT

    the center of the universe is a little late to the party

  • kaypro1234 posted Aug 28, 2008 8:03 am PT (does not meet display criteria. login to show)

    kaypro1234

    Posted Aug 28, 2008 8:03 am PT (hide)

    Great. More &#%@! corporate welfare in Canada. Our Ontario based family business has been slogging away for twenty years and the Government has taxed us to death and never given us a red cent. If some pointless video game company can't make it on their own then too damn bad. The video game industry is rolling in cash. The last thing that they need in this world is to be sewn to the public teat.

  • peeweeshift

    Posted Aug 28, 2008 7:34 am PT

    Awesome news. If I had known this I would happen now I would have gone too learn programming instead of engineering. Making games seems like more fun

  • giglebits

    Posted Aug 28, 2008 7:26 am PT

    its the year of the media.

  • darkride66

    Posted Aug 28, 2008 5:46 am PT

    AgileNate "Doesnt Canada pay more for video games as it is? Now they have to pay more taxes for them too?"
    Um, no and no. We don't pay more for videogames - our prices are the same as the US and are dollar is just a bit under the US so actually we get games slightly cheaper now. Your second point doesn't really make sense. We aren't paying anymore taxes, are tax dollars are just being spent on business incentives. Ontario had a strong economy based in a large part around the automotive industry. Now that industry is in shambles and plants are closing left right and center while their provincial government comes to grips with decades of overspending. Ontario is going from a province that used to have money to a province that relies on the western provinces and their oil wealth to bail them out through equalization payments. These type of business incentives encourage growth in new areas and I, for one, feel it's much more appropriate then continuing to support failing industries that struggle due to their own mismanagement.

  • pink_floyd123

    Posted Aug 28, 2008 4:49 am PT

    The weird thing about this is, it's basically a tax subsidy (corporate welfare) yet the Canadian government (which is more liberal than the US) supports it. The things that Canada provides assistance to with taxpayer money boggle my mind.

  • Cloud737

    Posted Aug 28, 2008 3:35 am PT

    Seems more and more states are scrambling and in a frenzy for more game incentives. Guess people started to finally realize the importance of the gaming industry (more jobs, more tax dollars, more great products, more bragging rights ).
    Well, good for Ontario to start considering this. Any chance we'll see something like this applied to single individuals?

  • sunilian

    Posted Aug 28, 2008 12:53 am PT

    could there be a possibility that ontario is getting gaming companies to open their game studios here

  • DaFrop posted Aug 27, 2008 11:10 pm PT (does not meet display criteria. login to show)

    DaFrop

    Posted Aug 27, 2008 11:10 pm PT (hide)

    Quebec will always have the best video game studios in Canada. Ontario is just jealous of Quebec like they always have been in the past...

  • mariomusicmaker

    Posted Aug 27, 2008 10:29 pm PT

    yea this is all good and well but if i end up haveing to pay an extra tax on games ( like alcohol ) then i will have to deeply consider giveing up on games... i mean, is 72 bucks not enough for 1 game? im glad i can go to detroit in less then an hour...

  • DarknessMageX

    Posted Aug 27, 2008 10:29 pm PT

    "This is proposterous! I CANNOT believe that MY tax dollars are going in to video games. I am a resident of Ontario and I am apauled to hear this news. A MILLION dollars of our tax money goes to pointless videogames each year!! Why not take that money and FIX MY DAMN ROAD!!!"

    Maybe you don't realize this, but the economy in Ontario took a big hit not so long ago. Pouring our money into some roads is more of a waste right now than stimulating an industry that will actually generate revenues. Who can afford to drive in this city anymore anyway? What good are pristine roads when gas is $1.25/litre?

  • yboucher posted Aug 27, 2008 10:20 pm PT (does not meet display criteria. login to show)

    yboucher

    Posted Aug 27, 2008 10:20 pm PT (hide)

    Give it up, Ontario ! You got the auto industry, and that's what's been keeping you afloat. Now BC and QC are on the rise and there ain't nuthin' y' can do about ("aboot"?) it !!

  • SSJ_GOTENKS

    Posted Aug 27, 2008 10:08 pm PT

    i live in toronto...........doh....

  • AgileNate

    Posted Aug 27, 2008 9:40 pm PT

    Doesnt Canada pay more for video games as it is? Now they have to pay more taxes for them too? Ouch...

  • snipergimp

    Posted Aug 27, 2008 8:42 pm PT

    This is awesome news indeed. Maybe my other half will realize there are more to games than just playing around.

  • radiocreed

    Posted Aug 27, 2008 8:30 pm PT

    The manufacturing sector is not doing so well here, it's good to see the govt is doing something is the software sector.

  • AuthenticM

    Posted Aug 27, 2008 8:18 pm PT

    Québec rules! Bring more developpers here!

  • footfoe2

    Posted Aug 27, 2008 8:14 pm PT

    yeah more games the better

  • funsohng

    Posted Aug 27, 2008 7:33 pm PT

    i luv vancouver

  • tawagivercetti

    Posted Aug 27, 2008 7:20 pm PT

    Ontario made warriors, (puts beer bottles on fingertips) Waaaaarrrrioorrrsss come out and playeeeee!

  • Holdwick

    Posted Aug 27, 2008 7:11 pm PT

    Yeah, this is awesome!!!

  • Lord__Darkstorn

    Posted Aug 27, 2008 7:10 pm PT

    Wow. Canada is so much more progressive than the U.S. I'm so tired of Jack Thompson and Fox News trying to censor people's art. Maybe Canada will actually become the 'Hollywood of Gaming' if this legislation passes

  • Caer_Death

    Posted Aug 27, 2008 7:01 pm PT

    Is the purpose of government really to help encourage the building/destruction of video games and the industry as a whole? One can only wonder if they offer the same fair tax breaks to the pornography industry. Such would be the perfect socialist world, eh?

  • recon_recon

    Posted Aug 27, 2008 7:01 pm PT

    I live in Canada and this isn't in any newscasts.

  • Waffen_SS84

    Posted Aug 27, 2008 6:54 pm PT

    >xNJN
    Because your road do not generate money.

  • Waffen_SS84

    Posted Aug 27, 2008 6:49 pm PT

    Ontario is trying to save his ass eh? Car industry is no longer enough or what?

  • xNJN posted Aug 27, 2008 6:49 pm PT (does not meet display criteria. login to show)

    xNJN

    Posted Aug 27, 2008 6:49 pm PT (hide)

    This is proposterous! I CANNOT believe that MY tax dollars are going in to video games. I am a resident of Ontario and I am apauled to hear this news. A MILLION dollars of our tax money goes to pointless videogames each year!! Why not take that money and FIX MY DAMN ROAD!!!

  • Merl57

    Posted Aug 27, 2008 6:20 pm PT

    I actually am considering moving to canada for a job after Im done with my degree in Game Art from Full Sail

  • MiltoxBeyond posted Aug 27, 2008 6:09 pm PT (does not meet display criteria. login to show)

    MiltoxBeyond

    Posted Aug 27, 2008 6:09 pm PT (hide)

    They don't live in igloos... they live in log cabins... sheesh... everyone knows that

  • Anthony9000

    Posted Aug 27, 2008 5:51 pm PT

    I also live in Ontario and wanna join the gaming industry =D

    Now all i gotta do is finish school

  • death919

    Posted Aug 27, 2008 5:49 pm PT

    I live in Ontario and NO WE DON'T LIVE IN IGLOOS!

    BTW this news is good.

  • Tremblay343

    Posted Aug 27, 2008 5:37 pm PT

    I hope we can get more developers in here other than silicon knights. I think it'd be pretty cool if ontario suddenly saw a flood of game developers.

  • dooby95286

    Posted Aug 27, 2008 5:19 pm PT

    Quebec owns Ontario." -onething77
    in what way would that be?

  • AAwiidog

    Posted Aug 27, 2008 5:15 pm PT

    yey! ontario got mentioned in something! lol

  • bunyipbrown

    Posted Aug 27, 2008 5:07 pm PT

    Silicon Knights (Too Human), Rockstar Toronto (The Warriors), and Digital Leisure (Dragon's Lair). Its funny beacause 2 of those games were complete crap, so a market boost in ontario is a good thing. And no, Quebec blows.

  • shadyelf

    Posted Aug 27, 2008 5:06 pm PT

    I would love for Canada to become the "gaming Hollywood", even though I don't live there anymore.

  • Stealth-S-117

    Posted Aug 27, 2008 4:58 pm PT

    This is actually pretty cool. Wonder how long it will be before the rest of the world catches on. I bet Australia won't do something like this though. They seem to be doing everything in their power to make gamer's life hell these days.

  • Jono465

    Posted Aug 27, 2008 4:37 pm PT

    "Quebec owns Ontario." -onething77
    As an Ontario resident this statement somewhat dumbfounded me.

  • ChrnoTrigger

    Posted Aug 27, 2008 3:48 pm PT

    karnis, why isin't it good? helping developers make more money is a bad thing? -_-

  • teirdome

    Posted Aug 27, 2008 3:43 pm PT

    When Canada is the Hollywood of game development in 20 years, we all will know why.

    This frustrates me because it's so freaking smart. Bring the people to your country that are intelligent and make a lot of money. You'll make more in the end than these tax breaks will cost your taxpayers.

  • Franko_3

    Posted Aug 27, 2008 3:40 pm PT

    "Quebec owns Ontario."
    yeah, I don't know why they even bother, we have ubi soft, ea, dreamcatcher and many others...

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