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Game subsidies cut as Quebec slashes spending

Game subsidies cut as Quebec slashes spending

Tue 17 Jun 2014 6:38am GMT / 2:38am EDT / 11:38pm PDT
PublishingDevelopment

UPDATE: Tax relief cut to 24 per cent for games produced in English

Update:Tax relief for game companies in Quebec will be cut to as much as 24 per cent, according to the Canadian Interactive Alliance.

New details of the cuts were passed to Develop by Serge Landy, CEO of the Canadian Interactive Alliance, a not-for-profit trade association. Landy confirmed that the cuts would apply to every game developer in the province, significantly reducing the 37.5 per cent maximum relief that sparked industry growth in the area.

Developers can mitigate the against the cuts by producing their games in French, the official language of Quebec. Any studio willing to do so will qualify for 30 per cent tax relief, but games produced in English will receive only 24 per cent.

The cuts were introduced on June 5 this year.

Original Story: Game companies based in Quebec will have their subsidies cut as part of new measures to reduce spending and eliminate the provincial government's deficit.

Canada became a hub for the global industry largely due to generous subsidies offered by the Quebec government, which allow game companies to make significant savings in various areas of production and operations.

However, according to a report in the French-Canadian publication La Presse, the Quebec government plans to cut as much as $500 million from the incentives it offers multinational businesses, with Ubisoft listed among the companies that stand to lose as much as 20 per cent of their benefits.

Ubisoft is just one among many game companies with major operations in Quebec, but any complaint will seem insignificant to a government attempting to reduce a potential $6 billion deficit by cutting spending. The full weight of these cuts will not be felt until 2016.

Government subsidies can be a powerful motivator when it comes to the strategy of game companies. They certainly put Montreal on the map, and similar benefits offered by the government of neighbouring province Ontario helped Toronto to attract major new studios - Ubisoft Toronto, for example, received a $263 million grant.

But it cuts both ways. When Rockstar decided to close its studio in Vancouver, British Columbia and relocate any willing team members to Toronto, it was in no small part down to the greater financial incentives offered in Ontario.

That's why the EU Commission's approval of Games Tax Relief for the British industry was regarded as such a huge milestone for developers in the UK; it promised a more level playing field after years of losing talent to subsidised development clusters like those in Canada.

The question is, will these cuts be enough to make game companies look elsewhere?

7 Comments

These cuts might not make companies in Montreal look elsewhere, but they will make other companies think twice before moving there.

Posted:4 months ago

#1

Alexandre Moisan Art Director & Co-Founder, Pixel Crucible

1 1 1.0
That picture is misleading, as those cuts come from the latest Liberal Party budget, not the previous Parti Québécois government (currently pictured).

Posted:4 months ago

#2

James Berg Games User Researcher, EA Canada

176 220 1.3
First Vancouver, now Montreal :(

Posted:4 months ago

#3

Edward Buffery Pre-production Manager

149 96 0.6
Holy shit snacks! This is not the greatest time to start looking for a new job in Montreal :(

Posted:4 months ago

#4

Philippe Allard-Rousse Technical Game Designer, Gameloft Montreal

1 0 0.0
The subsidies that was cuts work are called "Tax Credit for Multimedia Titles":

An qualified companies can deducte up to 30% (was 37.5%) of his qualified labour expenditure on qualified title production.

All compagnie can be qualified (if they meet the requirement).

All other financial contribution are not touch.

Source: http://www.revenuquebec.ca/en/entreprise/impot/societes/credits/multimedia/default.aspx

Posted:4 months ago

#5

Jori Baldwin Artist Liaison, SUPERBROTHERS

1 0 0.0
This article is misleading. The sourced french editorial says the cuts are to subsidies for a bunch of companies including Ubisoft, but the other companies listed are not in game development (IBM, CGI, and two banks that invest in small businesses).

Posted:4 months ago

#6

Christopher Bowen Editor in Chief, Gaming Bus

457 734 1.6
@Vincent - the issue is that companies came flocking to Montreal in the first place in search of those subsidies. After awhile, you have to set roots down somewhere. Dev houses - good ones, anyway - can't just up and move stakes every time a government changes.

Posted:4 months ago

#7

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