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Video game industry hot sector for public funding in Ontario, Quebec 
Issue No. 02 - July 19, 2011
Canada is increasingly gaining international recognition for its entertainment software industry, which is currently the world's third most successful.

The industry, which employs 14,000 Canadians and contributes $1.7 billion to the economy, is also rapidly developing-it grew by 30% in 2009, and is expected to grow another 29% each year for the next few years.

The digital media industry is showing particular growth in Ontario, and is now contributing an estimated $1.5 billion a year through about 1,000 companies and 16,000 jobs.

Last year, the Government of Ontario supported 341 digital media projects, and continued its work with companies like Ascension CrossMedia, Drinkbox Studios, Ubisoft and Digital Extremes to grow the sector.

The provincial government is also supporting the sector through the Interactive Digital Media Tax Credit, which was valued at almost $20 million in 2009-2010.

The Ontario Interactive Digital Media Tax Credit is a refundable tax credit available to businesses that develop digital media products in the province. Eligible expenses may include labour, contractor payments, marketing and distribution expenses.

Quebec is also a hotbed for video-game companies - including Ubisoft, Visceral Games, Activision, Eidos and THQ - thanks to its advantageous operating costs, which are 21% lower than the North American average for the sector, and a tax credit that can cover up to 37.5 per cent of labour expenses.

The credit is managed by Investissement Qu�bec.

The province is home to over 80 digital media companies, and represents about 7,000 jobs.

But despite these measures, the video game industry could still benefit from more direct funding.

In its April 2010 submission to the federal government's co-sultation on the national digital economy strategy, the Entertainment Software Association of Canada (ESAC) called for more reliable access to financing and capital to further grow the industry.

"While access to capital is an endemic challenge in all technology-related sectors, it is particularly challenging in the digital media sectors, where projects often require substantial investments at early stages but are unproven and cannot guarantee a predictable return," ESAC wrote.

ESAC further stated that access to capital is viewed quite poorly by Canadian video game companies.

The Association recommended direct government funding and tax incentives for R&D, development, marketing and distribution.

The federal Conservative government is currently developing a digital economy strategy. In early June the Conservatives released a budget that included preliminary details of the strategy, which will focus on digital skills development and businesses' adoption of new technologies.

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This Week's Top Story: Ready to innovate?

The Honourable Rona Ambrose, Minister of Public Works and Government Services and Minister for Status of Women, announced Thursday that the federal government is once again accepting applications from local businesses to help kickstart their innovative ideas.

Launched last year, the $40M Canadian Innovation Commercialization Program/Kickstart initiative (CICP) helps Canadian businesses by testing their products and services within the government before taking them to the marketplace. The tested innovations will fall within four sectors: environment, health, safety and security, and technology.

A Web conference is being held today at 1 p.m. EDT for parties interested in the call for proposals.

See the release for more details. 

 

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Funding News
 

BC invests $140k to find skilled workers for wine industry

The BC government announced Monday it is providing HortEducation BC $140,000 to study ways to meet the demand for skilled labour in the province's grape and wine sectors. BC is home to about 200 wineries and 700 vineyards. View the release for details.

 

Manufacturing company Usine Rotec Inc. receives $500k

The Honourable Denis Lebel, Minister of Transport, Infrastructure and Communities and Minister of the Economic Development Agency of Canada for the regions of Quebec, announced Monday that Usine Rotec Inc. has received $500,000 in repayable funding. The company will use the funding to acquire specialized equipment and increase its productivity. View the release for details.

 

Nova Scotia government awards Kentville company $121k

The government of Nova Scotia announced Friday it is investing $120,600 in a Kentville-based manufacturing company. Crown Fibre Tube Inc. will use the funding to buy new equipment. The funding was awarded through the Productivity Investment Program. View the release for details.

 

Forest industry strengthened by $53.5M in funding

The Honourable Joe Oliver, Minister of Natural Resources, announced Thursday investments totalling $53.5 million to advance the transformation and evolution of Canada's forest industry. View the release for details.

 

Three meat processing projects receive combined $8M

Agriculture Minister Gerry Ritz announced Thursday $8 million for three new projects that will help improve meat processing facilities and increase profitability for the entire livestock sector. Montpak International received $3M, St. Ann's Foods received $3M and Les Viandes du Breton received $2M. View the release for details.

 

Quebec's silvicultural industry receives $20M

The Honourable Denis Lebel, Minister of Transport, Infrastructure and Communities and Minister of the Economic Development Agency of Canada for the Regions of Quebec, announced Thursday that the federal government will allocate $20 million in 2011 and 2012 to support Quebec's silvicultural sector. View the release for details.

 

Imaginary Friends pays off for Nova Scotia's Stitch Media

The Nova Scotia government announced Wednesday that Stitch Media is the province's first recipient of funding from the Canadian Media Fund's Experimental Stream. The company will receive $600,000 for its interactive project, Imaginary Friends. View the release for details.

 

Neepawa hog processing plant receives $10M in funding

The federal government announced Wednesday a repayable contribution of $10 million under the Slaughter Improvement Program to the Hylife Foods facility in Neepawa. The company will use the funding to upgrade its operations, purchase new equipment and improve its workflow. View the release for details

 

Agriculture Canada contributes $1M in funding for wild blueberries

The federal government announced Wednesday that BioAtlantech will receive more than $1 million to study the health benefits of wild blueberries and develop innovative ways of including wild blueberries in processed food to increase demand. View the release for details.

 

Farinart Inc. receives $936k through Economic Action Plan

The Honourable Christian Paradis, Minister of Industry and Minister of State (Agriculture), announced Wednesday an investment of $935,834 in support of Farinart Inc. The company will use the repayable contribution to improve its processing lines and its opportunities to market its products. View the release for details.

 

Olymel's Aliments Prince receives $2M through Economic Action Plan

The Honourable Christian Paradis, Minister of Industry and Minister of State (Agriculture), announced last Tuesday an investment of $2,000,000 in support of Aliments Prince. Aliments Prince, which is owned by Olymel S.E.X., will use the repayable contribution to improve its processing lines and get its products to market. View the release for details.

 

Quebec Aerospace Association awarded $984k

The Honourable Denis Lebel, Minister of Transport, Infrastructure and Communities and Minister of the Economic Development Agency of Canada for the Regions of Quebec, announced last Tuesday the Quebec Aerospace Association will receive a contribution of $984,150 in non-repayable funding to support its operations for three years. View the release for details.

 

Northern Alberta home to new incubator

The Honourable Lynne Yelich, Minister of State for Western Economic Diversification, announced last Tuesday a federal investment of $500,000 towards the Mobile Business Incubator. The incubator will create economic opportunities for rural entrepreneurs. The Province of Alberta is investing $500,000 towards the project. View the release for details.

 

Laiterie Chagnon Ltd receives $150,000 in funding

The federal government announced last Tuesday the awarding of $150,000 in repayable financial assistance to Laiterie Chagnon Ltd. The company will use the funding to acquire new equipment that will allow it to develop its export markets. View the release for details. 

 

Profile: Marielle Pich�, Funding Expert at The Funding Portal

Marielle Marielle Pich� is Chair of THE FUNDING PORTAL's Expert Review Panel.

In this role, she oversees a Panel of public funding experts who bring extensive experience selecting applications for public funding within federal, provincial and municipal funding agencies.

Pich� rose within Canada's National Research Council (NRC) to the position of Secretary General at the Industrial Research Assistance Program (IRAP), which provides funding to thousands of Canadian companies each year to develop and commercialize technologies.

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