Yesterday the Ontario government released its 2009 budget which included significant improvements to the province's competitive edge in the interactive media marketplace. Through a series of improvements to the Ontario Interactive Digital Media Tax Credit (OIDMTC) and a boost to the Ontario Media Development Corporation (OMDC), Ontario now offers some of the most competitive production and development environments for the creation of interactive media products and services anywhere in the world.
The Interactive media industry is comprised of companies working on emerging and developing platforms such as video game consoles, the web and mobile phones. There are currently about 700 companies working in the interactive media industry in Ontario.
"This budget can leave no doubt that Ontario is very serious about its digital future" said Ian Kelso, President & CEO, Interactive Ontario. "It is a tremendous boost to our competitive edge, and I have no doubt the world will take notice."
"This new support from the Ontario Government will foster new growth in the interactive media industry. Not only will it be easier to market interactive projects, but the development support will give companies the freedom to incubate innovative, forward-thinking ideas and allow us to stay competitive in the global market," said Mark Bishop, Chair, Interactive Ontario Board of Directors & Partner/Executive Producer, marblemedia.
This budget proposes, effective for qualifying expenditures incurred after March 26, 2009 to increase the OIDMTC rates to:
• 40 % (from 30%) for qualifying corporations, regardless of size, that develop and market their own eligible products; and
• 35 % (from 25%) for qualifying corporations that develop eligible products under a fee-for-service arrangement.
For qualifying expenditures incurred after March 26, 2009:
• to expand the OIDMTC, to allow corporations to claim 100 % of the amount paid to eligible arm's-length contractors that is attributable to the salaries and wages of the contractor's employees; and
• to extend the OIDMTC to digital media game developers that incur a minimum$1 million of eligible labour expenditures over a 36-month period for fee-for-service work done in Ontario in respect of an eligible product. Corporations that meet the minimum expenditure test would not be required to be at arm's length with the purchaser corporation, or to develop all, or substantially all, of the eligible product.
This budget is proposing about $100 million annually in additional tax relief and investments of about $30 million to support the entertainment and creative cluster. These measures include proposals to:
• enhance tax support for the creation of interactive digital media products in Ontario;
• enhance the refundable book publishing tax credit;
• make the enhanced tax credit rates under the refundable film and television tax credits permanent, to create predictability and stability for the industry;
• provide $20 million to the Ontario Media Development Corporation (OMDC), an agency of the Ministry of Culture, which supports a number of Ontario's creative industries as they compete domestically and globally; and
• invest $10 million in a pilot program, administered through OMDC, that would refund a portion of the costs associated with intellectual property development to Ontario-based companies in the screen-based industries.