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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.