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Game subsidies cut as Quebec slashes spending

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?

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Matthew Handrahan avatar
Matthew Handrahan: Matthew Handrahan joined GamesIndustry in 2011, bringing long-form feature-writing experience to the team as well as a deep understanding of the video game development business. He previously spent more than five years at award-winning magazine gamesTM.
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