Canada overtakes UK games business

Following George Osborne's balls up with games tax relief, Canada has now nudged the UK's games development industry into fourth place. Canada now sits at number three, behind the US and Japan in first and second place respectively.

A proud statement from the Ontario Technology Corridor explained that "a combination of a deep talent pool, strong economy and targeted incentives has helped the Province of Ontario push Canada past the UK as the world's third largest centre for video-game development talent."

Responding to the news, Gerry Pisarzowski, vice president of business development for the Greater Toronto Marketing Alliance, said: "our job now is to add to our tremendous home-grown crop of companies and help demonstrate that Ontario is a prime destination in North America for gaming investments."

According to the Ontario Technology Corridor, Ontario offers a number of incentives to the games development industry, including the following:

Intellectual property development fund - refunds 30 per cent of eligible early stage development costs to bring "screen-based content properties" closer to production.

Interactive digital media tax credit - refunds 35-40 per cent of production costs.
Computer animation and special effects tax credit - refunds 20 per cent of labour costs.

OMDC (Ontario Media Development Corporation) interactive digital media fund - provides up to $150,000 CAD in project production funding. In 2010, the OMDC has so far announced $2.9 million CAD in funding support.

The news follows a number of reports about games publishers being tempted away from the pricy cost of development in the UK. Mock Canadian passports were given out at the Game Horizon conference in the UK in June, trying to tempt businesses away from the UK and into Canada's arms.

Meanwhile, industry heavyweights such as Activision and Sony revealed they were rethinking their UK investment plans. Plus, Canadian officials from the Nova Scotia government also revealed their plans to visit the UK in July to drum up games development business.

UK gaming trade association TIGA has already added its tuppence, following a report on the situation by Develop. TIGA CEO Dr Richard Wilson claimed that "UK politicians have been asleep at the wheel - while the Canadian video games industry has soared in numbers and the UK development workforce has declined."

"There was nothing inevitable about this process," says Wilson. "Canadian policy makers simply took the farsighted decision to create an attractive environment to do games business, in particular, through the provision of generous tax breaks."

In July, the coalition government attempted to rebuild the bridge with the games business by offering £25,000 grants to developers. However, the government's own figures show that scrapping the original tax relief plans would save up to £50 million a year; ten times the amount offered with the new grants scheme.

"UK policy makers need to wake up," said Wilson. "If we are to rebalance the UK economy away from an excessive reliance on public sector employment and financial services then we must encourage the growth of other sectors, including creative industries such as the video games industry. It is not too late to ensure that the UK remains a leading developer of video games."