Meanwhile in Canada
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Meanwhile in Canada: An Interview With ESA Canada President Jayson Hilchie

Meanwhile in Canada: An Interview With ESA Canada President Jayson Hilchie

AUSTRALIAN gaming enthusiasts know all too well that our national government (as opposed to certain state governments that are certainly trying) does not, it would seem, support the local games industry in any meaningful sense. 

If you board a plane at Brisbane, however, and fly north-west across the Pacific Ocean, you’ll find yourself in a country which has not only fully embraced its games industry but is reaping the benefits in a wide range of sectors as a result.

Canada has a strong tradition of supporting its creative industries – like Australia, they have local content requirements for free-to-air TV and radio broadcasts – and the lessons from our Commonwealth cousins in North America could pay big dividends here.

Entertainment Software Association of Canada president Jayson Hilchie visited Australia earlier this month as a guest of Australia’s own Interactive Games and Entertainment Association (IGEA), taking the time to speak with Australian politicians about the Canadian games industry and the benefits supporting the Australian games industry would bring.

Mr Hilchie said part of the reason his country’s video games sector had become successful was a combination of government support and geographic location.

“There has been a focused and concerted effort by eight provincial governments across the country and at the federal government level to put in place policies to attract investment, create jobs and foster innovation,” he said.

“Vancouver’s proximity to the west coast of the US made it a natural choice in the 1990s for US foreign investment to grow. This was mostly an organic process that was driven by talent, geography and exchange rates. British Columbia is now home to 6,000 full-time employees in our industry. Quebec tried a different strategy and in 1997 was the first jurisdiction in the world to adapt its film tax credit for interactive multi-media projects, such as video games.

“This decision was a massive success and has led to the creation of more than 10,000 high paying jobs in 20 years.

“The current environment in Canada lends itself to continued growth due to clustering. We now have close to 22,000 full-time employees in our industry and 600 companies, creating the winning conditions for increased investment and growth.”

Eight of Canada’s provinces offer refundable tax incentives to help with job creation, Mr Hilchie said, with said incentives ranging between 17.5 and 45 percent.

“The (Canadian) Federal Government also offers CAD$40,000,000 in the form of the Canada Media Fund, which funds Canadian-owned independent studios to create Canadian-owned IP. The provinces of Quebec and Ontario also offer similar funds for locally-owned companies,” he said.

“In conjunction, these incentives work to both attract larger employers to the country, but also grow Canadian-owned and -made studios, resulting in a dynamic ecosystem that is leading the world.”

Meanwhile in Canada
Entertainment Software Association of Canada president Jayson Hilchie

Mr Hilchie explained the tax incentive programs all worked differently but essentially refunded a percentage of the eligible labour costs involved in making a specific game, with the company getting the reimbursement at tax time.

With respect to the Canada Media Fund and the funds in Ontario and Quebec, they are an application-based system that is adjudicated by a panel, whereas tax credits are more democratised in the sense that any eligible company can claim them,” Mr Hilchie said.

There were lessons from Canada’s success which could be applied to Australia’s industry as well, with Mr Hinchie pointing to programs that support both domestically-owned studios while attracting foreign investment as something our government should really be thinking about.

“For example, while 83 percent of the 600 studios in Canada are Canadian-owned, 86 percent of the jobs are with larger studios, the vast majority of which are foreign-owned,” he said.

“It is the larger firms that have the ability to create a lot of jobs. That said, supporting smaller studios is necessary and valuable as they create innovative and riskier games and contribute to an overall ecosystem that helps drive the industry forward.

“But it does really come down to two different approaches, IP creation or job creation. Both approaches don’t necessarily end with the same result.  A balanced approach of both is ideal. In addition, making sure that immigration programs that allow fast-tracked entry for high skilled workers are in place is paramount, as in Canada, our industry has simply outgrown the number of intermediate and senior talent available domestically.”

The benefits for Australia of having a thriving video games industry like Canada’s went beyond job creation and revenue, too.

“Ultimately our (Canada’s) industry is an amazing economic development case study,” Mr Hilchie said.

“We are mobile and can set up new investments very quickly if the environment is right. Our employees are young – average age of 34 – which is important to Western countries that are ageing and have an uneven demographic base. The average salary is just over CAD$77,000 a year, which is more than double the average Canadian wage rate.

“The skills in our industry are transferable, meaning the skills that video game developers have are equally as useful in other industries such as healthcare simulation, defence, autonomous cars, film and TV etc. The more of these people you have in your economy, the more chance they will spark innovation in other industries.”

Mr Hilchie said Canada overall was seeing the benefits of government support in many ways, too.

“Aside from a lot of highly paid and highly skilled young people thriving and starting families and buying homes and cars, we have seen increasingly connected sectors that are benefitting from the skills and technology of the Canadian video game industry,” he said.

“In October 2017, we produced and hosted a new conference called Beyond Entertainment where we showcased the way that the video game industry is driving innovation in other sectors. We highlighted Graphics, Healthcare, Virtual and Augmented Reality and Artificial Intelligence.

“Montreal, for instance, is becoming a global leader in AI research and deep learning and some of this is being driven by the video game industry and/or people who honed their skills in the video game industry who have now moved on to AI. It’s extremely exciting.”

While the Australian Government’s support for gaming seems lacklustre at best lately, Mr Hilchie said he believed there was hope for the future.

“In my meetings with Australian government representatives I did feel that they were listening and very keen to do something,” he said

“It is such an amazing industry that not supporting, in my eyes, is a mistake.

“I’ve seen firsthand how it has made a significant impact on the Canadian economy and how it has gone beyond what the people who first came up with the thought to support it ever imagined.”

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