Reduction of labour threshold for annual filing for video game companies accessing the Ontario Interactive Digital Media Tax Credit is a significant step forward for the industry
Today, the Government of Ontario released the 2019 Ontario Budget. Interactive Ontario is extremely pleased that the labour threshold for eligibility for Ontario Interactive Digital Media Tax Credit (OIDMTC) annual filing for video game companies has been reduced from $1 million to $500,000. This is a change that Interactive Ontario has long advocated for through our participation in the OIDMTC working group and in our pre-budget submissions. The ability to file annually – rather than at the end of a project – provides eligible companies with the ability to more accurately predict their operating cash flows, resulting in improved production planning, and ultimately stable and predictable hiring and growth. It also more accurately reflects the ongoing production work that is now required for many video games. Opening it to a larger number of companies is a win for our sector. This change is effective for taxation years beginning after April 11, 2019.
“Reducing the labour threshold will support more of Ontario’s small and medium-sized game companies, create more permanent jobs and help these companies grow and become more competitive,” said Lucie Lalumière, President & CEO of Interactive Ontario. “We expect that this will reduce the administrative burden and shorten the lengthy wait time that currently exists – benefitting all companies who file for the OIDMTC.”
With this change, the Government of Ontario has signalled support for the economic growth of the province’s innovative interactive digital media sector.
“Interactive digital media is an economic driver in Ontario. Over the next few weeks, Interactive Ontario will release the second edition of Measuring Success: The Impact of the Interactive Digital Media Sector in Ontario, which will quantify the output of the sector and its growth over the two year period since the first report,” said Mary Sorrenti, chair of IO’s advocacy committee and co-founder of Game Pill and VRGEN. “Today’s budget measures will assist Ontario’s IDM companies in continuing on this upward trajectory, bringing jobs and investment to the province.”
IO will continue to engage with the Government of Ontario as they undertake a review of cultural media tax credits, including the OIDMTC. Interactive Ontario applauds the Government of Ontario’s continued support for the Ontario Interactive Digital Media Tax Credit. We look forward to working with them to further reduce barriers to growth and stimulate the IDM sector.
