Monday, October 27, 2008

Producers angered over tax rebate changes


Oct 22, 2008


Producers are up in arms over a move by the Canada Revenue Agency that could shrink their tax-rebate cheques.

Canadian producers who have had their tax-credit applications randomly audited by the country's tax man in recent months complain that they are now allowed a maximum 10% cap on claims for producer fees, with a further 10% write-off for corporate overhead.

That's alarmed producers, as many have long recorded a 15% or even a 20% write-down for producer labor costs, against corporate overhead, when filing tax returns in search of tax-credit rebates.

Canadian producers privately insist tax-credit applications have typically started out with a loose 10% producer-fee claim to secure acceptance from analysts at the Canadian Audio-Visual Certification Office, which greenlights tax credits on behalf of the Canadian Heritage department, and the CRA, which reviews federal and provincial tax-credit claims before it issues refund cheques.

At the same time, producers insist their costs often surpass 10% of a project budget, and allowance was often made for that in tax-credit applications.

But, in its latest audit rulings, the CRA appears to be saying it will only allow producers to breach the 10% cap in "exceptional circumstances," according to sources close to the negotiations with the CRA.

A CRA spokesman says the agency has no direct comment on its current talks with indie producers to resolve the fee dispute.

"However, I can tell you that the CRA works closely with the affected stakeholders and is always exploring opportunities to improve the delivery of its programs and services," the spokesman adds.

But Donna Leon, a producer with Ottawa's Genuine Pictures (A World of Wonders), sees the CRA as the villain in this saga for springing the change on producers only after they underwent random audits.

"Until you get audited, you wouldn't know about it. How would I have known you have a different rule," says Leon, who wants the tax man to spell out the new producer-fee policy.

Etan Vlessing reports on the apparent tax changes at CRA, and what they mean for producers big and small, in the Oct. 27 issue of Playback.

Sunday, September 28, 2008

GDC Canada Announced

Think Services will partner with Reboot Communications to produce a Canadian Game Developers Conference in May 2009, in association with New Media BC's Vancouver Digital Week. GDC Canada will examine the breadth of the gaming industry and how it works with Canada's ever growing game development community.

Saturday, September 27, 2008

David S. Rose: 10 things to know before you pitch a VC for money

Thursday, September 11, 2008

Other Oceans to open studio in St. John's NL

Other Ocean Group Inc. announced plans to create a 62 person studio in St. John's. The studio will focus on design work, art work, production and coding of games for Xbox 360, Apple iPhone, Nintendo DS and Wii.

Friday, August 29, 2008

Breaking News from The Globe and Mail

Harper defends cuts to arts programs

Tuesday, August 26, 2008

Prime Minister Stephen Harper defended $44.8-million in planned cuts to arts-and-culture programs for the first time yesterday. At the same time, the Conference Board of Canada released a report attesting to the economic benefits of investing in Canadian culture.

Harper said the government's “changes” to more than a dozen programs is the only responsible path, and echoed recent assertions by his communications director, Kory Teneycke, and Canadian Heritage Minister Josée Verner that the government has managed to walk a tightrope, trimming the fat from its culture portfolio while simultaneously increasing overall spending.

“What this government has also done in that area, as it's done across the government, is we've instituted an expenditure-management system, where over a period of five years we comprehensively review every program and we make sure that we're spending on priorities and spending on those programs that are most effective,” said Harper. “Some programs in arts and culture have increased in funding, others have gone down – in total it's gone up.” Federal investment in culture for the 2007-08 fiscal year was $3.4-billion, up from $3.2-billion in 2006-07.

Harper also painted promises from Liberal Heritage critic Denis Coderre to reinstate the eliminated programs, should the Liberals be elected, as irresponsible. “The opposition has a view that you can never cut any single program, ever. If that's how they want to run the country, you'll have two consequences. You'll either have out-of-control spending or you will have a flat amount of program funding that is increasingly less effective over time,” he said.

Tom McSorley, executive director of the Canadian Film Institute, is frustrated with the Conservatives' stance. He believes the driving force behind the cuts is the “ideological adamant rock” that funding the arts is not the federal government's domain, something the Conservatives have repeatedly denied.

“I don't think they listen with any degree of interest to the fact that the economic impact of the arts is demonstrably positive,” says McSorley. “To fall into the fallacy that it's really about moving money around – well it isn't.”

The Prime Minister's comments come in the wake of a recently released report from the Conference Board of Canada, in collaboration with the federal government, that confirms high economic returns on cultural investment. The report, entitled Valuing Culture: Measuring and Understanding Canada's Creative Economy, calls the cultural sector's role “as a magnet for talent, an enhancer of economic performance, and a catalyst for prosperity” a universal phenomenon.

The Conference Board estimates Canada's cultural sector generated $46-billion, or 3.8 per cent of Canada's GDP, in 2007. The sector's total impact including “indirect and induced effects” on other sectors leaves an economic footprint of $84.6-billion, or 7.4 per cent of GDP, the report states. Those revelations paint a picture of industry stability: Statistics Canada reported culture accounting for an identical 3.8 per cent of GDP in 2006.

The report put 2003 employment in the cultural sector at 616,000 jobs.

Including direct and indirect contributions to employment, the report estimates that culture accounted for 1.1 million jobs in 2007.

Canada's culture sector is being driven by growth in digital technology and expanding Internet use, the report states.

© The Globe and Mail

Wednesday, August 27, 2008

Ontario 2012: Stimulating Growth in Ontario's Game Industry

A 37-page report summarizing the opinions of the Ontario game industry on growing the industry. The cheat sheet is page 6.

Tuesday, August 12, 2008