Interactive Ontario’s mandate to promote the growth of Ontario’s interactive digital media industry includes a strong focus on advocacy at all levels of government. We are constantly working to ensure that the unique needs of our sector are considered when policy decisions are made. Currently, Interactive Ontario is engaged in meetings and discussions with new Ministers and MPPs about the interactive digital media sector in Ontario.
Our advocacy work is informed by feedback from our members and input from our Advocacy Committee. See below for more information on our advocacy efforts surrounding key issues and please note Action Alerts where we are requesting participation from IDM companies.
2019 Ontario Budget
Interactive Ontario submitted its pre-budget submission to the Government of Ontario on February 8, 2019. It contained key recommendations for the continued economic growth of the Interactive Digital Media (IDM) industry in Ontario. It was prepared with IO’s advocacy committee, composed of IO members volunteering their time to further the Ontario IDM industry. IO socialized the pre-budget recommendations to key stakeholders and IO and a group of industry leaders had the opportunity to discuss them with the Chief of Staff and his team at the Ministry of Tourism, Culture and Sport (MTCS).
On April 11, 2019, 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.
Ontario Interactive Digital Media Tax Credit
In the fall of 2014, the Ontario government announced a review of the Ontario Interactive Digital Media Tax Credit. During this process, Interactive Ontario took part in numerous meetings with the Ministry of Tourism, Culture and Sport; the Ministry of Finance, the Treasury Board and the Premier’s Office. We were pleased with the outcome in the next provincial budget, with the OIDTMC rate left unchanged and guidelines changed to reduce “outliers” accessing the credit for products outside of its intended use.
Concerns remained around some of the new guidelines, so Interactive Ontario continued to collaborate with the government on issues such as:
- Promoting changes to filing deadlines in order to reduce the queue and improve cash flow predictability for IDM companies
- Promoting changes to regulations that would allow for collaboration between companies
- Ensuring a fair transition period to new 80/25 labour expenditure guidelines so as not to punish companies who had structured projects to match the previous 90% rule
- Clarifying the “standalone” product definition and raising concerns that it unintentionally punished work-for-hire products hosted on broadcaster websites
December 8, 2017: Update on Ontario Interactive Digital Media Tax Credit Treatment of Embedded Film and Television Websites
The OMDC released a bulletin on December 8, 2017 regarding the treatment of embedded film and television websites with respect to the Ontario Interactive Digital Media Tax Credit. Previously, digital media products embedded in a third party website (such as that of a licensing broadcaster) were encountering OIDMTC eligibility issues. Interactive Ontario has been working to rectify this situation through advocacy and participation in the OIDMTC working group, co-chaired by IO President & CEO Christa Dickenson. Please click here for the full text of the bulletin from the OMDC, which outlines that embedded products will be considered eligible for the OIDMTC, provided they meet the other eligibility guidelines and have not received a certificate of eligibility or letter of ineligibility prior to November 1, 2017. If anyone wishes to speak to IO for further clarification, please contact Christa Dickenson at firstname.lastname@example.org.
Toronto Media Arts Centre
In December 2017, Interactive Ontario submitted a letter in support of the Toronto Media Arts Centre, specifically highlighting our positive experiences with Gamma Space and Dames Making Games.
The space at 36 Lisgar Street was built with Section 37 funds for the purpose of housing media arts organizations, but has been tied up in legal proceedings. Without an agreement, many of the independent interactive developers and companies at Gamma Space will be without space to work and Dames Making Games will be without a home for their programming. Our letter encouraged the City of Toronto to quickly allow TMAC to take possession of the space so that they may focus on the community building work that they are so widely known for.
CRTC – 2017-359
In October 2017, the CRTC issued Broadcasting Notice of Consultation CRTC 2017-359, a call for comments on the Governor in Council’s s. 15 request for a report on future programming distribution models.
IO consulted with our members via a list of emailed discussion questions. Based on the responses received, we focused our submission on highlighting the importance of discoverability as platforms emerge and evolve. IO noted the importance of affiliated digital media for broadcast discoverability and reiterated our position that the 10% cap on non-programming digital content for Certified Independent Production Funds was a mistake that should be reversed.
North American Free Trade Agreement (NAFTA) – Cultural Exemptions
Through consultations with our Advocacy Committee and Board, the question of whether or not digital media should be made part of NAFTA’s cultural exemptions emerged as the key issue.
NAFTA currently includes a cultural exemption which exempts the “cultural industries” (essentially, the music, film, television, books, magazines, newspaper and broadcast industries) from its provisions (i.e. various measures to prevent one country from discriminating against the goods and services of another, such as raising tariffs, restricting foreign investment, limiting public subsidies, etc). This exemption was intended to protect Canadian cultural industries from the United States, and has allowed the Canadian government to enact laws and policies that give preference to Canadian cultural goods and services without running afoul of the agreement.
Both the Minister of Global Affairs and the Minister of Canadian Heritage have publicly affirmed their commitment to maintaining the cultural exemption in a renegotiated NAFTA. However, there is some discussion around the contours of the exception, and whether it should be expanded to include “digital” goods, services and industries that did not exist when the agreement was first negotiated.
There are numerous arguments for and against including digital media in the cultural exemptions. On the one hand, expanding the cultural exception to “digital media” could restrict access to the US market, limit access to US investment, and add new barriers to accessing US talent, any of which could potentially be devastating for the Canadian digital media industries. On the other hand, not exempting the digital media from NAFTA makes the government support programs that have been critical to the industries’ growth vulnerable to challenge.
Given this, Interactive Ontario has argued for a more nuanced, hybrid approach which would allow digital media to preserve access to government support programs while benefiting from all other aspects of NAFTA. Our our letter, we have advocated for a specific inclusion of IDM along with other industries excepted from limits on government subsidies (i.e. the Exceptions from Most-Favoured-Nations Treatment).
Rather than extending the existing cultural exception to digital media, this approach would see digital media exempted from limits on government subsidies while preserving important access to export opportunities.
Ontario Culture Strategy
Interactive Ontario submitted comments during the development of the Ontario government’s first Culture Strategy. Our submission can be viewed here.
CAVCO – ‘Shown in Canada’ eligible platforms
In the spring of 2016, the Canadian Audio-Visual Certification Office issued a call for comments on proposed changes to eligible platforms for the ‘shown in Canada’ requirement. The changes were designed to allow audio-visual productions whose distribution is exclusively via online platforms (including through mobile video services) to be eligible for the Canadian Film and Video Production Tax Credit (CPTC), provided that the rights have flown through a Canadian distributor to the entity showing the production in Canada.
Interactive Ontario welcomed this as a first step towards much-needed improved funding for digital-first linear video content, but also said that the regulations should be further amended to allow producers of self-distributed content to access the tax credit. This would bring policy into line with new business models and viewing habits of consumers in the digital era, who no longer distinguish between CRTC-licensed and non-CRTC-licensed content providers. Read our full submission here.
Canada Media Fund
There are no major changes anticipated for the 2017-18 fiscal year, other than a re-allocation of $2 Million within the Experimental Fund to fund linear web series. However, CMF is looking to shift more funds increasing from the Innovation Program to the Commercial Projects Pilot Program. We will be monitoring that shift and the response to C3P, to identify any possible negative consequences for IO members.
As well, the CMF is looking to make changes to the Convergent Fund over the coming years that will impact how convergent digital media will be funded. They are looking to phase out the Digital Media Factor Weight in the calculation of broadcaster envelopes and replace that incentive with added funding to a revamped Convergent Digital Media Incentive. IO will be talking to CMF staff over the next year to minimize any negative impact on convergent digital media producers.
Interactive Ontario is a member our federal umbrella organization, the Canadian Interactive Alliance / Alliance Interactive Canadienne. CIAIC’s membership is comprised of Canada’s seven existing provincial interactive digital media trade organizations: Alliance Numérique, DigiBC, Digital Alberta, Interactive Ontario, New Media Manitoba, Nova Scotia Game Developers Association and SaskInteractive.
Advocacy matters involving federal departments are submitted via the CIAIC. Learn more about those efforts below.
Review of the Canadian Communications Legislative Framework
On January 11, 2019, the CIAIC responded to a call for comments regarding the Review of the Canadian Communications Legislative Framework by the Broadcasting and Telecommunications Legislative Review Panel.
The CIAIC’s comments focused on discoverability and suggested that the 10% cap of funding by Certified Independent Production Funds for ‘non-programming digital content’ be reversed.
Interactive Ontario actively encouraged members to submit their thoughts on Canadian Heritage’s Canadian Content in a Digital World consultations. We gathered feedback and ideas through a variety of methods, including a Twitter chat and Advocacy Committee meetings, in order to contribute to the CIAIC’s submission.
Certified Independent Production Funds
In August 2016 the CRTC released a new framework for Certified Independent Production Funds (CIPFs) (CRTC 2016-343), implementing changes effective September 1, 2016. The Commission stated it would ‘maintain a 10% limit on funding that can be allocated to non-programming digital content’. Previously that 10% cap (which is 10% of the revenues that a fund receives from cable and satellite companies) was only for standalone digital media and there was no cap on digital media affiliated with television programming.
Digital-first linear video could still be funded as CIPFs are no longer required to demand a broadcast licence for eligibility but any media that incorporates interaction would have to fit within the 10% cap. Given that this new rule would devastate the mandate of the Bell Fund, Telus Fund and Quebecor Fund and prevent the Shaw Rocket Fund from having its digital fund, the Bell Fund made two requests to the CRTC, which the CRTC posted for comment. It requested a one-year transition period to give companies time to fully understand the ramifications of these changes, and the Bell Fund time to adjust its funding programs and guidelines. It also requested an increase in the 10% cap to a more reasonable level.
Interactive Ontario met with the CRTC to discuss the potential impact of these CIPF changes on Canada’s digital media industry and contributed to the CIAIC’s submission in support of the Bell Fund’s letter.
Despite the efforts of IO, the Canadian Interactive Alliance, our member companies and other industry stakeholders such as the CMPA (whose interventions are noted here and here), on July 17, 2017 the CRTC denied the request by the Bell Fund for an increase to the 10% cap that CIPFs may spend on funding for non-programming digital content. The decision summary reads:
The Commission approves a request by the Bell Fund for a transition period to adapt its guidelines to the Commission’s new policy framework for Certified Independent Production Funds. The Bell Fund will have until 17 July 2018 to make the necessary changes.
The Commission denies a request by the Bell Fund for an increase to the 10% cap on funding for non-programming digital content.
Interactive Ontario has submitted a letter to the CRTC expressing our disappointment with this decision, which can be read here.
We will provide updates on guideline changes to the Bell Fund as they are available.
The Ministry of Innovation, Science and Economic Development issued a call for ideas regarding Canada’s Innovation Agenda. The CIAIC response included a number of ways the IDM sector can continue to help position Canada as a global leader in innovation. These included:
- Reducing barriers to collaboration, within IDM and across sectors
- Mechanisms to encouraging risk-taking, such as a tax credit claimed on an annual basis for labour expenditures on innovative products, regardless of the eventual completion or financial success of the project
- Funding for companies engaged in the production of content that is awarded on an enterprise, rather than per-project, basis