Ontario juices video game industry, again

Funding ONtheEdge, GamesID programs for game entrepreneurs

TORONTO -- Despite a rising deficit during the slumping economy, the province of Ontario on Wednesday said it will pour another CAN$605,000 ($565,000) into its local video games sector.

Ontario is to fund a new ONtheEdge program to teach video game entrepreneurs much-needed business skills, the GamesID program to provide market intelligence, marketing and promotional support to local video game companies, and do more to pair Ontario video game and digital media developers with Canadian and international investors.

The latest investment, announced at the Game On Finance 2009 conference, follows Ontario government earlier this year investing $226 million in a new Toronto development studio planned by Ubisoft.

Sandra Pupatello, the provincial minister of economic development and trade, defended the latest injection of public funds into the local gaming sector, despite Ontario last week posting a record CAN$24.7 billion ($23.2 billion) deficit.

"Ontario is better placed financially than most of North America," Pupatello said, with an eye to cash-strapped U.S. border states.

"These tax credits are here to stay," she added as critics contend Ontario could be forced to curb its showbiz subsidies to cut its mounting deficit.

The province last week raised its interactive digital media tax credit for large game developers from 25% to 40% for companies that develop original content, and to 35% for producers working on a fee-for-service basis for international clients (HR, Oct. 23).

Additionally, Ontario is to allow game developers that spend at least $1 million annually to develop interactive digital media games to tap a new 35% Ontario interactive digital media tax credit to offset ongoing labor costs.

Pupatello said the video game investment is also warranted by the continuing convergence of traditional film and TV with emerging digital technologies.