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UK Gov't Complaint On Canada Subsidies Fails
UK Gov't Complaint On Canada Subsidies Fails
February 11, 2009 | By David Jenkins

February 11, 2009 | By David Jenkins
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The UK government's lobby against Canada's subsidies for game companies has been unable to gain any footing with the World Trade Organization.

Tiga has long campaigned for tax breaks for UK games developers, similar to those enjoyed in Canada, France and some U.S. states. Although the UK government has been reluctant to explore such breaks, it agreed to look into complaints that the subsidies of other countries constituted an unfair advantage under international trade rules.

However, the UK government now admits that no rules on subsidies exist under the WTO General Agreement on Trade in Services and therefore no complaint can be made.

"We cannot stop our competitors from benefiting from tax breaks, but there is a simple solution: copy them," says Tiga CEO Richard Wilson.

"Just as Australia, Canada, China, France, Singapore, South Korea and some American states help their games industries to grow through extensive tax breaks, so the UK government should back our games industry with a tax break for games production. If you canít beat them, join them."

"The government stands naked before the games industry, bereft of a credible fiscal policy with which to support the sector," Wilson added, urging the government to introduce a 20 percent tax break into the budget "similar to the EU approved French regime that applies to games that pass a cultural test."

Wilson says such a tax break would mean an additional £220 million ($317m) would be invested -- and could create up to 1,600 jobs.

"This measure would cost HM Treasury £150 million ($216m) over five years Ė a fraction of the recent £100 billion ($144bn) taxpayer bailout of the UK banking system," he concluded.


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Comments


Logan Foster
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Actually it should be made clear that it is not the Government of Canada that offers the subsidies but the individual provincial governments of Quebec, our Maritime Provinces and Ontario that offer such lucrative grants and funds. The rest of Canada gets screwed over just as much as anyone in the UK (probably worse since it makes it very difficult to compete with companies from these jurisdictions when you are bidding on the same work).

Mark Harris
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Isn't it interesting how taken burdens OFF of the people and businesses creates jobs, increases productivity, and helps to cushion economies against recessions (less money tied up in government = more liquidity in the private sector). Do you think any of our brilliant politicians will ever start using facts and data to drive their policy decisions instead of whatever they think will sound good and get them re-elected?

Dean Wadsworth
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Last year the Gov't org Telefilm dropped the New Media fund which was one of the few funds game companies could apply for in BC. This fund was for any media based company, not just games. But even when this fund was around the only game companies that got any subsidies from the Canadian gov't were mostly US based companies and any other foreign based company. Strange though, according to the rules to apply for this fund you needed to be 100% Canadian owned and operated.

nathan vella
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Just FYI Dean, the latest federal budget renewed the CNMF. Read more here: http://interactiveontario.com/news/view/255



Also, while i dont know much about subsidies given to US companies with shops in Candad, i do know that has nothing to do with Telefilm's CNMF, which is exclusive to Canadian owned companies.

nathan vella
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side-note... gamasutra really needs to provide post-editing functionality so when i make a stupid typo like "candad" i can fix it and sound less moronic.

Josh Neff
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Agreed :)

Kristian Roberts
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Dean,



Small point of interest. BC approaches subsidy for the video games sector (and indeed all new/digital media) in a different, yet not necessarily less effective manner. It provides INVESTMENT tax credits (see: http://www.investbc.com/businessincentives.htm). The province also makes equity investment in games companies eligible for BC Renaissance Fund financing. So, while individual projects may be more difficult to finance, the idea is that companies should have easier access to investment. Incidentally, Quebec - often viewed as having the most aggressive (and arguably most successful) tax incentives for game companies, issues these credits on a case by case basis.



All, for more detailed information on the tax credit and digital media funding landscape in Canada, see: http://www.telefilm.gc.ca/document/en/01/17/Telefilm-New-Media-fi
nal-report.pdf

Yannick Boucher
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I can tell you that tax credits and incentives in Quebec are very, very effective, and are given out on the basis of workforce, innovation, production quality, and so on. Very specific reports have to be filed in yearly which describe what type of technology has been developed, and basically, "how do these credits make you the best in class". That's why you often see a lot of innovation in both products and production methods (for example from Ubi Mtl), because it's tied to those credits.


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