Update: Develop can confirm Quebec’s tax subsidies have been slashed to as low as 24 per cent on games produced in English. Will affect all of province’s 130 or so game studios.
Original story: The Quebec government is set to make sweeping $500 million cuts that will strike a huge blow to generous subsidies enjoyed by game studios in the region.
According to La Presse, the budget cuts will affect multinational companies including Ubisoft and IBM. Some firms could lose as much as 20 per cent of their benefits.
The curb in spending is part of the provincial government’s plan to save $2.7 billion. In total Quebec is said to be approaching a deficit of almost $6 billion.
Such a cut in incentives will be a major blow to games companies set up in Quebec City and Montreal. Ubisoft has its largest studio in Montreal, housing well over 2,600 employees. It’s responsible for its top franchises including Assassin’s Creed and Watch Dogs.
The publisher is said to be investing as much as $370 million in its Quebec operations, with plans to recruit some 100 new staff to its Quebec City studio.
Other studios based in the region include Eidos Montreal, BioWare, WB Montreal, and Beenox.
Subsidies for multinational businesses and generous tax breaks designed to attract overseas firms to relocate to Quebec have played a huge role in growing the region into an game industry leader, with Ubisoft playing a key part in growing the scheme in Canada.
But despite the new cuts, Quebec has been able to build up a strong gaming and technological hub over the years, with a wealthy talent pool, a strong educational infrastructure and a host of studios in place which will surely still prove an attractive proposition to developers.
The news is in contrast to the UK, which recently got approval for a 25 per cent tax relief on games production, though titles must first past a cultural test to be eligible.
It remains to be seen whether the loss of subsidies will result in a brain drain from Canada, with tax breaks previously used as an example of why developers were leaving the UK.
Develop has contacted local studios for more information on the matter.