Business

Gregor Robertson throws his support behind Vancouver’s Digital Media Sector.

By Vancity Buzz Staff | 1:16 pm PST, Wed July 18, 2012 | Speak Up

The recent closures of two gaming studios Radical Entertainment and Rockstar Vancouver has finally caught the attention of the city’s political elite. This is definitely a cause for concern because the ripple effects it can have on Vancouver’s digital sector, could stifle and ultimately put a halt to a growth industry. This is an industry cities around the world would kill to have in their back yard. We in Vancouver have it and are squandering an opportunity to further entrench our role in the new digital media age.

Having recognized the importance Mayor Gregor Robertson will be bringing a motion to next week’s Council throwing his full support for Vancouver’s digital media sector.

From the Mayor’s press release:

Vancouver’s economy has been bolstered tremendously over the past three years by the creation of well over a thousand new high-skilled, high-paying jobs in digital media and visual effects. These sectors now employ a total of over 25,000 employees in 1300 companies, and Vancouver is now one of the world’s top three global clusters for digital media jobs.

That success is fragile though, and other jurisdictions in Canada and around the world are launching significant new strategies to increase their competitiveness for digital media investment.

That’s why the Mayor is acting to ensure that Vancouver sustains and expands upon its leading position as a hub for global investment in digital media, and calling upon the province to protect and create jobs by making BC’s competitiveness incentives even more robust and attractive.

The problem is that there is very little the mayor can do. He can throw his support but ultimately it lies in the hands of the provincial government. Sadly the current provincial government doesn’t seem to be working to well. We’ll see how it plays out once the NDP comes in power.

 

Why Mayor Robertson is throwing his support behind the digital media industry in Vancouver.

  • The interactive digital media and visual effects sectors are a major part of Vancouver’s economy, employing more than 25,000 employees in 1300 companies;
  • There are a number of internationally recognized post-secondary institutions in Vancouver that produce highly skilled graduates for these sectors, which supports local hiring and a robust regional workforce that makes up a significant component of Vancouver’s global advantage;
  • The Province of British Columbia has established an effective tax credit policy that helps to attract companies in some digital media sectors, and has worked with the Government of Canada to lead changes in immigration policy that has contributed to the establishment of Vancouver as one of the top three global clusters in the world, behind only London and Los Angeles;
  • Vancouver has an Economic Action Strategy that has made job creation and investment attraction an explicit priority in sectors like interactive digital media and visual effects, and has successfully supported the creation of over 1,000 jobs in the last three years alone in this industry;
  • Vancouver is gaining strength and growing in some segments of the interactive digital media sectors, like visual effects and animation, but is seeing a rapid decline in other segments like console gaming;
  • Under the Ontario Interactive Media Tax Credit, video game developers are eligible to receive up to a 37.5 per cent tax credit with additional stacked incentives, compared to the 17.5 per cent offered by BC’s Interactive Digital Media Tax Credit, which limits stackable incentives;
  • These strategies and incentive policies in other jurisdictions, such as Ontario and Quebec, have influenced the decisions of gaming companies to leave Vancouver, dropping the region’s ranking from Number 1 to Number 3 over the past 3 years;
  • The departure of these companies and the talent associated with them has implications on the broader talent pool for Interactive Digital Media and screen-based sectors that could eventually threaten the stability of the entire cluster

Photo credit: City of Vancouver

Speak Up

  • http://twitter.com/tekmosis Jamie Taniguchi

    Not to mention that Canada’s largest gaming based website (Neoseeker) is operated out of Richmond.

  • Mike Klassen

    Hi Karm,

    As someone who once worked in videogame development and the film industry I guess you can call me a booster of this increasingly integrated part of the local economy. What Gregor Robertson sent out today is a complete bill of goods and unfortunately most folks thought it meant something, rather than being empty political rhetoric.

    1. Should we try to build and foster the local development industry for film, digital fx and games? Of course. However, how is competing with Ontario and Quebec to the bottom a good strategy?

    For every dollar the Province they provide in incentives for these businesses there is a net loss. BC tried to persuade the other Finance Ministers in Ontario and Quebec, but unfortunately they were determined to up the ante. It’s just not good economics for BC.

    2. Asking the Province to do something is typical City of Vancouver politicking. It takes nothing to ask the province or feds for something, but it takes more to actually come up with something that will make the province listen.

    Has anyone determined the REAL reason Rockstar and Radical packed it in? They’ve barely had time to clean out their desks and Gregor’s asking for a tax handout? How about doing an industry analysis first, asking some of the stakeholders what went wrong? Do we simply react every time a business goes belly up? Videogames are changing big time — more handheld games vs console products with multi-million dollar budgets that people are not buying as much. Do we prop up a business model whose time has reached an end?

    3. Gregor proposes a “national strategy”. For what? Our competitors are Ontario and Quebec. How likely are Canada’s biggest provinces going to sign up for a process that hurts them?

    One of the most serious issues facing Vancouver is the lack of an economic development strategy other than selling houses and condos. I hope that you and your readers see through the empty rhetoric and start demanding real solutions to create jobs in the long term for our city and region.

  • http://twitter.com/OlympicOrange johnvanrij

    One thing the city could do is providing a proper (economic) infrastructure for these companies to come ‘home’ to. Housing for these young family workers is unfordable and we are ranked one of the most congested cities in North America. Add the lack of competency by Translink to deal with its mandate and a high cost of living. It is not the right environment for any company to work in, especially not in an industry that is extremely competitive. A beautiful setting only gets your city so far.

    I am however against hand-outs by the province or the city. Tax credits is just a way of us giving money to corporations and so that they can make more profit. It does not guarantee a return, i.e. Apple keeps its money offshore because it thinks it will pay too much taxes in the USA.

  • Mark

    Mike, you are just making up stuff.  How is it a net loss for every dollar spent on incentives?  Do these people not pay taxes?  Do they not offer training?  Do these businesses not generate any corporate taxes?  City taxes?  Spin off businesses that support the game companies?  No one has actually done the analysis so i’m going to make up a number too… the provincial government gains 2 dollars for every dollar they spend on incentives.  Prove me wrong.

    2.  Although radical clearly “went wrong” rockstar did not.  They are keeping all of their employees and moving them to Toronto.  I don’t know how much more clearly they could spell it out for you: “WE ARE LEAVING TO ONTARIO FOR THE TAX CREDITS!!!  HOPE WE CAN STEAL AS MUCH TALENT WITH US AS POSSIBLE!”

    3. Gregor proposes a national strategy because he doesn’t want a “race for the bottom” as you describe (although I would suggest it is a race for the top).  We in Canada are competing globally against all other jurisdictions, not just Ontario and Montreal.

    4. Many have written off the AAA gaming industry as a whole.  I simply don’t believe that people will no longer want high quality gaming.  Although I expect a long term decline in this industry, clearly there will be a valuable core of AAA gaming in the world and it is best to maintain as much of that as we can.  The spin-offs of this industry are too valuable.

  • Mike Klassen

    The videogame and movie industries are a source of local pride. I’ve worked in the both and have relationships with people in these fields. BC has done amazing things and leads the way in digital FX. However, why isn’t business stepping out front and asking for these things instead of the mayor? The BCMPIA and DIGIBC were set up to lobby and advocate for these industry sectors. They probably saw the challenges of the game industry coming years ago–it’s their voice we should be listening to, not a politician opportunistically trying to cash in on the pain of others.

    How is sending a letter to politicians a strategy? How is asking for more handouts sustainable? This is more about optics than about creating a healthy economy.

    If the mayor thinks that taxation makes the difference in these businesses, then why did he slam the HST? Ontario has HST credits, and BC will lose that next spring. So much for competitive advantage, eh? That’s talking out both sides of your mouth, I say.

    What about income taxes? Someone in BC making $75K per year pays about $2K LESS in income tax per year than in Ontario.

    The Mayor’s office have no idea what they were asking for when they wrote that motion. They based it on tweets and not a proper needs analysis for the industry.

    And in case it wasn’t obvious, Vision Vancouver have no relationship with the federal government because they’ve spent most of their term criticizing the feds rather than working constructively on policies that would help our city. Their request for federal help done via a press release will simply fall on deaf ears.

    My hope is that industry stakeholders step forward with a real set of needs that will help them to compete, and get the politicians out of their way.

  • TMP

    Obviously Mike Klassen has no idea how the creative sector (film, tv, digital etc.) works. Due to low levels of available funding, producers build tax credits into budgets from the get go. If a jurisdiction like ON offers greater tax credits producers will relocate their projects accordingly. Either increase funding to such endeavours or increase tax credits. 

  • Can We Do It

    Hmmm, it seems your underlying critique is that @mayorgregor:twitter has actually taken a stance in favor of this industry.  Within the range of what is possible, this is – in fact –  a pretty powerful statement by the Mayor of one of Canada’s most important cities… and the industry HAS perceived it as such.

    Contrast this with the provincial government’s position which is, basically, “everything is fine, maybe we’ll tweak a few things”.  Tell that to the hundreds of people laid off from CapCom, Radical, Rockstar, ThreeWave, Nexon, Electronic Arts, United Front Games, Ubisoft Vancouver, Relic, Slant Six… sorry, running out of breath.

    It is a REAL problem, we need a variety of public and private sector solutions from all points of the compass.

  • Can We Do It

    Again, a little hard to follow your argument, which seems to boil down to an attack on the Mayor.  Mike, *that* actually doesn’t do anything to help our industry.

    The industry HAS stepped out on this – we’ve had literally hundreds and hundreds of people sign up to http://www.can-we-do-it.com since Radical slipped under.  They want to see those in power take this seriously… and *they* think the Mayor’s motion is a great *first step*.  Of course there needs to be more to come.

    Whether you agree with him or not, you have to admit that @mayorgregor:disqus  is out in front on this.  It’s a shame we can’t say the same about the BC Liberals.