PricewaterhouseCoopers (PwC) in Canada is pleased to welcome changes announced in Ontario’s Fall Economic Statement which support large, specialized video game developers that are developing eligible interactive digital media games in Ontario.
Retroactive from March 27, 2009, the tax credit provides certified game developers that incur at least $1 million of Ontario labour expenditures per year in the development of eligible interactive digital media games a 35 per cent Ontario Interactive Digital Media Tax Credit on Ontario salaries and wages. A certified game developer generally would have at least 80 per cent of Ontario payroll or 90 per cent of annual revenues attributable to interactive digital media game development.
According to Tracey Jennings, leader of the PwC Canada Entertainment and Media practice, “We have long advocated changes to the tax incentives to encourage use of the talent pool located here. The government’s numerous enhancements to the incentives over the past few years were not sufficient for video game developers; video games take a long time to develop (up to five years for some of the more serious games), and access to capital is essential throughout the development cycle. The existing incentives could only be claimed when the game was completed.”
These latest changes further notes Jennings, “positions Ontario to become a centre of excellence for the development of digital media by allowing specialized game developers to claim the tax incentives annually.”
Video games revenue has grown even through the recession. PwC’s Global Entertainment & Media Outlook 2009-2013 showed the Canadian video game market to be growing at 24 per cent in 2008. PwC forecast that it will remain one of the fastest growing segments through 2013, propelled by changing consumer behaviour and enabling technologies.
