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Studio heads speak out against Quebec tax break reduction

Studio heads speak out against Quebec tax break reduction

June 24, 2014 | By Christian Nutt

The next budget for Quebec will cut tax credits to the game industry by 20 percent. This is, unsurprisingly, making studio heads in the region antsy.

The Canadian province's game development business has boomed over the last several years, thanks to its economic favorability. Just last year, for example, Ubisoft announced plans to invest $370 million in the region, creating 500 jobs. But Ubisoft Montreal's Yannis Mallat more recently said that his company is reconsidering its commitment to the region in light of the reduced tax breaks.

Now, more voices are joining Mallat. "You have to understand that there are other [funding] programs in other territories in the world, whether in England, for instance, in Louisiana, or even in Ontario -- which have programs that are more generous than here. And jobs will be created elsewhere," Martin Carrier told reporters in a speech yesterday.

Carrier is not just studio head of Warner Bros. Montreal -- he's also president of Alliance Numerique, a Canadian video game industry lobby group. "I'm not sure we can talk about job cuts per se today. I think looking down the road, we can talk about jobs that may not be created. It's a little early on and we want to make sure we voice our concern," Carrier said.

Meanwhile, other studio heads are grumbling -- because Ubisoft and Warner Bros. negotiated private deals (that last until at least 2019) last year, while other companies are forced to accept the new rates, Polygon reports.

"I do not know how Ubisoft and Warner will react but it is clear they could take the opportunity to offer more competitive salaries. It makes a big difference, especially in a market like Montreal," David Anfossi, CEO of Eidos Montreal, told French-language newspaper La Presse, as translated by Polygon.

In a press release accompanying the new budget, Quebec's Minister of Finance, Carlos Leitao, said, "Quebec has many targeted tax assistance measures for businesses, particularly large corporations. These measures are costly and can create unfairness. The government wants to gradually change these incentives so that they are general rather than specific in scope."

That suggests a major policy shift -- and that the game-specific subsidies won't be coming back. The cut is part of an effort to reduce spending and balance Quebec's budget; the Ministry is promising that its overall strategy around cutting or eliminating tax subsidies will cut spending by CAD $348 million ($324 million) by 2016.

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