Video game developer 'disappointed' province axed digital media tax credit

Alberta-based video game developers will no longer be able to rely on a provincial tax credit to cover some of their costs after it was cut in the provincial budget.

The Interactive Digital Media Tax Credit provided a 25 per cent refundable tax credit for labour costs but it was axed in the UCP’s first budget, released on Thursday. The tax credit was brought in by the former NDP government back in 2018.

Aaryn Flynn, the general manager, North America, with game developer Improbable, calls the cut disappointing.

“As a new business in Alberta, it was a driver for securing investment for us,” he said. “It levelled the playing field with other more established Canadian jurisdictions like British Columbia, Ontario and Quebec, who, in some cases, have had a generation worth of programing similar to this to help build up a real critical mass of talent.”

Although the tax credit only covered 25 per cent, Flynn, the former GM of BioWare, said the break played a very important role, especially for smaller studios.

BioWare Studio general manager Casey Hudson, during the opening of the video game developer’s new downtown Edmonton studio in September, praised the tax credit.

But the cut doesn’t mean the province has completely stopped providing support.

Flynn noted the province is committing to fund $25 million a year over the next three years for innovation, but clear direction is needed.

“The longer we go without a clear signal as to how the province wants to support this industry, the more we have to consider options elsewhere,” he added.

While the digital media tax break is being cut, the UCP is establishing a $90-million film and television tax credit over a three-year period to help with labour and production expenses to attract medium and large productions to Alberta.

Flynn said some people still find it shocking that the video game industry is worth $150 billion globally, which is larger than television and film.

Alberta is Canada’s fourth-largest film and television production centre, with a workforce of more than 2,700 in the industry and an overall GDP impact of $236 million in 2018.

Flynn hopes for more clarity during the upcoming Reboot Development Red conference in Banff on Oct. 30 and Nov. 1. Government officials are slated to be there to speak to developers and other industry representatives.

jlabine@postmedia.com

Twitter.com/jefflabine