Tax relief joy for Canadaâ??s Vancouver hub

Tax relief joy for Canadaâ??s Vancouver hub

By Rob Crossley

February 5th 2010 at 10:40AM

Regionâ??s development army bolstered by new deal; threat to UK continues to grow

The famous game industry breeding-grounds of Vancouver will finally get what it’s long been campaigning for – development tax breaks.

Last night, ministers of Canadian province British Columbia said that the region’s vast video game sector will soon benefit from a 15 to 17.5 per cent tax credit to labour costs.

The move comes after persistent lobbying from the BC Interactive Task Force, which represents over 30 local developers, studios and related businesses in the area.

British Columbia’s new tax credit, set to be implemented in September, adds to Canada’s world-leading tax initiatives in provinces Ontario and Quebec, which both offer at least 35 per cent tax relief on labour and production costs.

The move adds yet more pressure on the UK government to implement its own tax breaks, or else risk diminishing its development workforce even further.

As more companies and studios find access to Canada’s advantageous tax break policies – now in three key provinces – publishers and businesses will have more reason to dedicate their resources there.

British Colombia’s tax break plan couldn’t have come at a more opportune time. The region has in recent months been shedding staff and projects, as investment swings to the nearby Quebec and Ontario regions.

At its peak in 2008, British Columbia employed over 4,000 people for game development. The sector makes over CA$500,000,000 to the province's GDP. But in the past 18 months, local employment in the industry has fallen dramatically.

The region is increasingly looking less attractive than its neighbours. In July last year, Ubisoft announced it was investing over $473 million in building a new studio in Canada, claiming it will create 800 new jobs over the next 10 years.

The studio was chosen to be in Toronto, Ontario.

Likewise, THQ recently announced it was going to open a new studio in Canada, set to create 400 new jobs and expand to include all sorts of disciplines including design, engineering, art, content and technology development, quality assurance and localisation.

That studio was chosen to be in Montreal, Quebec.

Recently, the MD of Ubisoft Vancouver told Develop that the province was losing its staff and studios to Canada’s Ontario and Quebec provinces.

The issue was first brought up in Develop back in early 2008.

Yet despite suffering heavy job losses, British Columbia is rich with its thousands of developers and numerous studios.

The likes of Ubisoft and Electronic Arts boast key studios in the region, rubbing shoulders with the likes of Activision’s Radical Entertainment, Microsoft’s Big Park, Backbone Entertainment, United Front Games, Propaganda Games, Rockstar Vancouver, Smoking Gun Interactive and Big Fish Games.

Some of those studios joined the BC Interactive Task Force back in 2009 when the region was suffering from heavy job losses.

"The BC video game industry sees the announcement as an important first step in creating a next-generation digital media hub and retaining our province's pre-eminent position on the world video game stage," said Howard Donaldson, chair of the BC Interactive Task Force (also VP of studio operations at Disney Interactive).

"We look forward to continuing to work collaboratively with the B.C. government as we finalise the details and implementation of this important new program,” he added.

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