Canada: We’re Number Three

Canada, according to data from the Entertainment Software Association of Canada (ESCA), is now the world’s third-largest home to game developers, surpassing the United Kingdom and trailing only Japan and the United States.

While the UK tries to compensate by finally passing tax-breaks for those in the game development sector, GamePolitics caught up with Peter White (pictured), President of the London (Ontario) Economic Development Corporation (LEDC), which, in turn, is a member of the Ontario Technology Corridor (OTC).

The five-year old OTC promotes Ontario as a region that is especially receptive to technology and videogame developers, complete with tax incentives, affordable cost-of-living and a treasure trove of universities turning out skilled graduates that are ready to go to work.

White began by describing some of his typical day-to-day duties, “In my capacity, we focus specifically on London and the immediate region, which represents an area of about 500,000 people for an economic base. In the focus of the OTC, really what we are trying to do is focus on the capabilities we have as a region and promote that in a number of different elements, whether that’s opportunities at trade shows, with foreign delegations or with foreign governments.”

The OTC was formed—and is driven by—both a combination of local municipalities and the Ontario government, along with input from other stake holders, such as local universities and colleges. The OTC represents the regions of Toronto, Ottawa, Waterloo, London and Niagara.

White explained:

Really, it was an opportunity for us together to promote the capabilities and strengths that we have along our corridor region. Canadians like to think that people know where Ontario is… but when you go to Europe and Asia, people know Ottawa and Toronto, but generally they don’t know the rest of the detail of the geography. Even in certain parts of the U.S. (this is the case).  So, we thought it was a great opportunity for us to promote the entire region.

The OTC has benefited from a government that is willing to formulate and implement strategies as it goes along. White noted that “it’s really been in the last 24 months that the government brought in some more aggressive tax incentives.”

Were these improved incentives a result of a lot of lobbying? White answered, “Both the Ontario and the federal governments have focused on digital media as being a core area, so it hasn’t really required a staff to go out and do broad lobbying. We’re able, actually, to go out and tell the government ‘Look you’re thinking of doing this, this is why this works even better’ and it just helps back up their strategies around that.”

Such unanimity, White said, makes it easier to woo prospective companies, “They can look and see that all three levels of government are involved in this process.”

White has a number of tiered interests to juggle: As a Canadian, he wants more developers to come to Canada. As a resident of Ontario, he wants developers to settle in that province. As President of the LEDC, he naturally wants developers to choose the London-area as home. These layers sometimes require the London-based White, at least initially, to work with competing locales, or other areas represented in the OTC:

It’s a team effort; we’re out promoting the region first and getting people interested in looking at Ontario, and once they decide that they are interested in Ontario, then it’s up to each of us as individual locations to promote the specific advantages we have for each of our cities.

White continued, “Anytime we can get a win in Ontario, it’s going to be beneficial for all of us. For instance, when the province worked with Ubisoft to have Ubisoft make their investment in Toronto that really helped the profile of us (Ontario) as a great site to be located. The province has done some great things in conjunction with the federal government to bring us down to the point where we are the lowest cost tax jurisdiction of all the G7 countries. On top of that, through both the provincial and federal governments we have outstanding programs around research and development.”

When dealing with developers considering Canada, White indicated that it’s a “fairly even split” in terms of whether the parent company (or decision maker) is based in North America or internationally. “A lot of the European countries have been particularly looking at the tax jurisdictions and talent that we have here. Those are the two key elements that they want to consider.”

One area in which Canada holds an advantage over the U.S. is in its less-stringent immigration laws. As White explained, “If European or Asian companies were thinking about a U.S. presence, a Canadian presence works as effectively for them and they don’t run into the issues on trying to get foreign staff in. It’s a much more straight-forward process to do that in Ontario particularly.”

Site selection inevitably boils down to what a company is specifically looking for. According to White, if a company is looking to set up shop in an area with more of a “world-city” feel, then they would probably lean towards Toronto. If a company has a focus on facility costs and being a larger player in a smaller market place, then “London works very well.” White added, “If London is not the right fit, we still want to make sure that they go to Toronto or Ottawa.”

Game developers in the region also tend to take an interest in the local education scene, which is important considering how fast technology can change. White stated, “All of our universities have panels set up where we bring in the industry support side to work in conjunction with the universities and colleges so that they are graduating students with a relevance to what the companies are looking for.”

“If it’s a situation where you’ve had a disruptive technology change,” added White, “You may not be able to address it in a 12-month period, but at least the people are aware of it and making sure the students are up-to-speed and as up-to-the-minute on the technology as they can be.”

The recent UK game developer tax incentives feature wording that would force games to be “culturally relevant” in order to qualify. When asked if Canadian incentives feature any such similar mandates, White replied, “We really don’t worry about what they are producing or the content.”

Correction: 10th paragraph, changed Ottawan to "resident of Ontario."