New media producers will soon be able to turn their Ontario digital tax credit into bankable cash to help cash flow production, indie producers were told Friday.

Canadian producers have long been able to borrow against their film and TV tax-credit applications because lenders draw comfort from completion bonding.

And Ottawa’s long-standing tax credit for scientific research and experimental development is bankable because that digital media subsidy is contingent on a producer’s R&D expenditures, not on whether or not a project is completed.

But the banks have so far steered clear of the competition risk associated with the Ontario Interactive Digital Media Tax Credit because the Ontario Media Development Corporation only hands out the subsidy for finished product.

Jennifer Blitz, director of tax credits at the OMDC, told an Interactive Ontario forum on tax credits on Friday that lenders can no longer ignore the Ontario digital tax credit, however wary they remain about completion risk in digital media production. The explosive growth of the video game and online worlds can no longer be ignored.

‘We’re on the cusp. If [lenders] could make themselves comfortable [with the OIDMTC], it will happen,’ Blitz said.

The test remains when, and if, a new media project gets completed.

Blitz explained a film with steep up-front production costs that starts principal photography is more likely to be completed than smaller-scale work on a video game or website concept that might have to be abandoned owing to an insurmountable technology issue, for example.

But here the solution, says Santino Mariani, an associate tax partner at KPMG, is to apply to Revenue Canada for the more lucrative SR&ED subsidy on the non-completed R&D work.

Michael McGuigan, managing partner at Breakthrough New Media, said indie producers with long-standing banking relationships, as opposed to mom-and-pop digital creators, can already borrow against the OIDMTC on a selective basis.

McGuigan said Breakthrough hasn’t attempted to bank its Ontario digital tax credit because the complicated application process promises too little money, compared to a film or TV production tax credit that potentially returns millions of dollars in public subsidies.

‘I feel like we’re close,’ McGuigan told fellow producers on banks ignoring the delivery risk with digital media to lend against the OIDMTC.