Ontario tech cluster points to tax credits as key to burgeoning biz

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With Gamescom 2012 kicking off in Cologne, Germany, the Ontario International Marketing Centre (OIMC), based in Munich, is on hand to lure big gaming and digital media firms to the province.

But according to the Ontario Technology Corridor, a cluster of companies in the province’s tech and gaming sector, and partner of the OIMC, the province is already an attractive place to get into the entertainment biz, thanks in large part to its healthy regime of tax incentives and its large pool of educated workers.

Indeed, Ontario has more than its fair share of homegrown firms, such as Christie Digital, Digital Extremes, Keyframe Digital Productions, Nulayer and RocketOwl.

But recent times have seen companies, including Arkadium, Capcom, Electronic Arts, Gameloft, Rockstar Games, Ubisoft, and Zynga expand their businesses into Ontario, or shutter up their doors elsewhere in favour of the province’s greener tax credit pastures.

“When you add Ontario’s strategic focus on gaming and digital media, government incentives can cut costs for game developers and producers by up to 40 per cent, and fast-track policies that make it easy for companies to relocate key personnel,” said Bill Elliott, integrative trade consultant and Waterloo regional member of the Ontario Technology Corridor, in a statement.

Leading the charge in building the province’s digital and gaming industry is the OMDC, says an Ontario Technology Corridor press release.

Its Digital Media Tax Credit, created specifically for game developers and producers, refunds up to 40 per cent of the costs of labour, and offers further support for marketing and distribution of games created in-house in Ontario, with no per-project or per-year limit on the amount that can be claimed.

In addition, the province offers hefty R&D tax credits, and according to the press release, “$100 in R&D expenditures can be reduced to about $57 or $39 for a small business in Ontario.”

Ontario-based firms also receive labour incentives in the form of the refundable Cooperative Education Tax Credit, for hiring Ontario students.

Under the credit, game developers can claim 25 per cent, or up to $3,000 of student salaries.

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