Some small video game companies are looking to set up shop beyond Quebec’s borders following cuts to industry tax credits that are making it harder to stay.
In June, Premier Philippe Couillard’s government announced it would slash by 20 per cent the very tax credits that have been a boon to Quebec’s fledgling video game industry.
It’s those tax credits that helped to attract powerhouse Ubisoft to Montreal’s Mile End, paving the way for other production houses to come to Montreal and elsewhere in the province.
The industry employs more than 9,000 people in Quebec alone, making for $740 million in economic spinoffs for the province.
Ubisoft and Warner negotiated a deal with the government to keep its tax credits at the current rate through 2019; however, smaller companies were not so lucky.
Now many of them are looking to go to Ontario, where tax credits are now upwards of 15 per cent and where the government offers support to new businesses on their first project.
“Right now, we will have to see whether it creates some doubts for these players. They will have to revisit their business plans, and it’s a bit of instability in an industry where we’re trying to promote growth, not the reverse,” said Martin Carrier, president of Digital Alliance, an organization that works to promote digital industries.
He said now there is little incentive for young people and companies to stay in Quebec.
“These are the future Cirque du Soleil of video games, the CGI of video games. They’re here, we need to help them. There’s now a void in the programs now available to these companies,” Carrier continued.
The designers and programmers at Compulsion Games are now working on the follow-up to their first opus, Contrast — a game that was bought by more than 1.7 million people and which won a number of awards around the world.
According to company president Guillaume Provost, though, financing is still a problem.
“I would say it’s really the main problem in the video games, because it’s an industry that is very high-risk. Either the games will make lots of money, or won’t make any money at all,” Provost said. “It’s hard to find financial partners who can really finance a project.”