Ubisoft and Warner Bros exempt from Quebec tax relief cuts

Ubisoft and Warner Bros exempt from Quebec tax relief cuts
Craig Chapple

By Craig Chapple

June 27th 2014 at 10:30AM

Special agreements means key publishers can continue enjoying higher subsidies until 2019

Ubisoft and Warner Bros are unaffected by cuts to Quebec’s games tax credits, a spokesperson for the province’s Ministry of Economy, Innovation and Exports has told Develop.

It had been believed that all of Quebec’s 130 studios would be affected by the drop in subsidies from 37.5 per cent to 24 per cent for games produced in English, which was made effective immediately as of June 5th.

However, due to special agreements sign by Ubisoft and Warner Bros, the publishers will maintain the high rate of tax relief until at least 2019. Both companies have significant operations in the region, with studios in Montreal and Quebec City.

The spokesperson said Quebec had also signed similar agreements with other “major industry players” to secure significant investment in the province’s economy. It is not clear however whether these are games firms or other businesses.

A review board on Quebec taxation is to be set up in Autumn that will recommend adjustments to tax credits in the upcoming budget. When asked whether this could mean further cuts or a raise in subsidies, the spokesperson said “it’s too early to know what the Finance Minister will do”.

“Finance Minister Carlos Leitao has announced a 20 per cent reduction in all provincial tax credits to businesses,” the spokesperson told Develop.

“Two of the main actors in Quebec’s video game industry, Ubisoft and Warner Bros, are exempt, at least until 2019, thanks to special agreements. The Government of Quebec has signed similar agreements with major industry players to secure significant investments for Quebec’s economy. A review board on Quebec taxation will be set up this fall and could recommend adjustments to tax credits for the upcoming Quebec budget. “

The news comes after Ubisoft CEO Yannis Mallat said the publisher was analysing its next step following the cuts, and was looking at what it could mean for the publisher's operations in the region.

Alliance Numerique and WB Games Montreal studio Martin Carrier head also recently expressed concerns over the sudden decrease in incentives, calling the development “worrisome” for the local game industry.