14 DAY TRIAL // No, the reason why European game developers are leaving European countries and move to Canada is not the latest Byron Review - that might be a reason for the more sensitive gamers to leave. No, the actual reason why game developers prefer Canada is represented by the tax incentives received by the Canadian companies. And according to The Vancouver Sun, England is not too happy about that.
It seems that some months have passed since the British companies have first felt the consequences of the exodus of European game developers to Ontario, Quebec and B.C. - the places that keep attracting multimillion-dollar investments and thousands of highly skilled foreign workers because of the tax incentives. And only now the U.K. Ministry of Culture, Media and Sport has initiated an investigation of Canada's trade practices, according to a spokesperson quoted by Canwest News Service:
"The U.K. government is concerned that state aid offered to computer games companies by a number of federal institutions in Canada may not be compatible with World Trade Organization principles."
Unlike the fellow Europeans, Canada comes with some really generous tax systems, with Manitoba allowing companies to cut 45 percent of labor costs, Quebec following closely with 37.5 percent labor tax credit. Ontario offers a 30 percent labor tax credit for small companies, while those who have annual revenues above $20 million have a 20 percent credit. Also, even though in B.C. there is no labor tax credit, private investors can receive a 30 per cent refundable tax credit, to an annual maximum of $60,000, when they invest in new media ventures, according to The Vancouver Sun.
"The Canadians have driven a tank over the French Citroen and have now parked on our lawn," said Paul Jackson, head of the industry organization representing British games studios. "It is becoming very challenging to keep core development studios here."