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Results: 1 - 15 of 35
View Paul Calandra Profile
CPC (ON)
Thank you, Mr. Chair.
Thank you for coming back. We appreciate that. Since we are not getting opening statements from you, I will ask you to explain how the Canada Media Fund was created and simply touch on the fund's mandate.
Sandra Collins
View Sandra Collins Profile
Sandra Collins
2012-11-27 15:31
The fund was created in March 2009 and was a combination of re-branding and revision of the Canadian Television Fund and the Canada New Media Fund. That was the birth of the Canada Media Fund.
The mandate is to champion the creation and promotion of successful innovative Canadian content and software applications for current and emerging digital platforms. In essence, we fund through two streams, the experimental stream and the convergent stream.
Nathalie, did you want to talk a little bit about the two streams?
Nathalie Clermont
View Nathalie Clermont Profile
Nathalie Clermont
2012-11-27 15:32
Yes.
In the convergent stream in which we are spending almost $340 million this year, we finance both television components that are related to the digital media component, so components that are related to the television IP. Every program that comes to us in this convergent stream needs to be presented on at least two platforms.
On the experimental stream, it is a bit different. We are financing projects that are not related to television or to the film industry. They are projects that are created only for other platforms, that are interactive, audiovisual, innovative projects in digital media. In this experimental stream, this year we are spending $36 million, compared to the other stream.
Claire Samson
View Claire Samson Profile
Claire Samson
2012-11-20 15:33
Thank you, and good afternoon.
I am the president and CEO of the Association des producteurs de films et de télévision du Québec, the APFTQ. The association has been active for 40 years. It brings together some 140 independent film and television production companies. That is the majority of Quebec companies involved in production for all screens in both official languages.
The total volume of film and television production in Canada reached $5.5 billion in 2010-2011. In that same period, the industry was the direct or indirect source of 128,000 full-time equivalent jobs.
Despite our success, the audiovisual industry requires stable funding that will allow it to meet the challenges of the new digital economy and to rebuild after the country’s economic slowdown. But the budgetary restrictions on the audiovisual industry, present and future, are affecting and will continue to affect our industry ever more negatively. The federal government must continue to invest in audiovisual production.
We represent an industry that is fragile and fragmented, even at a time when the trend is to convergence. Without increased support from the government, the presence and diversity of Canadian content will be evermore in jeopardy, both on traditional broadcast platforms and new digital platforms. Support must continue for productions created and produced in Canada, by Canadians and for Canadians so that Canadians can have better access to the productions in which we see ourselves. Here are the measures that we feel are vital for us to reach that point.
First, investment in the audiovisual support programs that are run by Canadian Heritage must be increased, not decreased. I am specifically referring to the programs of Telefilm Canada and the Canada Media Fund.
Since its creation, Telefilm Canada’s Canada Feature Film Fund has provided the industry in Canada with the means necessary to produce quality feature films. But, for a number of years, the funding has not kept up with the need. The success of the feature film sector, and of all the jobs it creates, depends on increased government support. In addition, the Canada Media Fund must remain permanent, because it succeeded in meeting government objectives very well. Maintaining the fund, including a return to a strong television component, will allow television production to benefit from full funding; those productions remain the most appreciated by Canadian viewers who can watch them on the screens of their choice.
A recent study by a Université de Montréal research group on youth and the media demonstrated the importance and value that Canadian families continue to place in television and the unwavering role that it continues to play in their homes. But funding must also be increased so that all content can be made available digitally. We will return to this a little later in the context of our fourth recommendation.
Second, the rules of the Canadian Film or Video Production Tax Credit must be changed to allow labour costs associated with the production of digital film or television content. It is still difficult to fund them adequately because few existing business models are viable and few funding programs are in tune with this new reality. This measure will encourage the production of content of even greater quality. It will thereby allow the government to meet its objective of being a world leader in the new digital economy.
Third, Canada’s policy on international co-productions must be completed and implemented. Adequate investment must be made in the area. The creation of a fund specifically for co-production would allow the business model to start again and to reach the point where Canada is signing treaties with some countries and renegotiating them with others. The international co-production business model must be revived; because of it, foreign capital is injected into our homegrown productions and into Canada’s economy, while enabling our culture to be showcased elsewhere in the world.
Claire Samson
View Claire Samson Profile
Claire Samson
2012-11-20 15:37
Thank you.
In order to interest foreign producers, we have to offer an attractive proposition matched by dedicated funds.
Fourth and last, buoyed by our experience with the Canada Media Fund, we believe that it is now time to establish a specific fund to finance Canadian cultural content that can be developed digitally. To do this, we see two major contributors to the fund, the government and the stakeholders.
Thank you, Mr. Chair.
Stéphane Cardin
View Stéphane Cardin Profile
Stéphane Cardin
2012-11-06 16:58
Mr. Chairman, committee members, thank you for inviting us to appear before you today.
Mr. Chair, in closing, we in the TCS believe that there is no question that the growth of the entertainment software industry has helped to invigorate the economy economic health and dynamism of communities across the country, injected thousands of professional and high-paying jobs into local communities, and raised Canada's profile as a significant force in the gaming industry.
Our comments today will be focused on the CMF's role in the industry and how we currently support it, including a description of a few examples of successful projects we've funded to date.
The CMF's mandate is to champion the creation and promotion of successful, innovative Canadian content and software applications for current and emerging digital platforms. We do this, first and foremost, through our funding programs. With the continued support of our funding contributors, the Government of Canada and Canada's cable and satellite distributors, the CMF was able to contribute $358 million to Canadian television and digital media projects in 2011–12, triggering no less than $1.3 billion of industry activity across the country.
As such, we are pleased to be playing a pivotal role in supporting the growth and evolution of an industry that is an integral part of Canada's digital economy.
Nathalie Clermont
View Nathalie Clermont Profile
Nathalie Clermont
2012-11-06 17:00
Our support is delivered through two funding streams: the convergent stream and the experimental stream. Through the convergent stream, the CMF supports the creation of television programs and related digital media content for consumption by Canadians any time, anywhere, on the platform of their choice. By making content available on multiple platforms and creating value-added digital content to further increase viewer engagement, the objective is to ensure that this content is seen by as many Canadians as possible.
In 2011–12, the CMF supported over 500 television and related digital media projects through this stream. As games are a natural extension of television properties, approximately 20% of the related digital media projects were in fact games—mobile games and social games.
For example, the digital media component of the popular VRAK.TV youth show Mixmania is an extraordinary example of the way to add value by adopting a transmedia strategy. Produced by Zone 3 and Turbulent Media in Montreal, the show is now in its third season. The website has had more than 1.3 million viewers and almost 14 million hits. The mobile game has been downloaded 100,000 times from the App Store. The songs in the musical section of the site have been heard 3.5 million times and Mixmania's Facebook page has more than 40,000 members.
Stéphane Cardin
View Stéphane Cardin Profile
Stéphane Cardin
2012-11-06 17:01
Through the experimental stream, the CMF encourages the creation of leading-edge, interactive digital media content and software applications. The primary objective of this program is to drive innovation in terms of content, technology, or business models. Funding is allocated using a selective process, with the selection of projects determined by a committee composed of Canadian and international specialists with recognized expertise in the field of interactive digital media.
In 2011-12, the CMF supported 90 innovative and interactive digital media projects through this stream, including 15 games. The games sector being a leader in terms of creative and technological innovation, it stands to reason that many Canadian games, from console games to casual games, have been supported through this program.
Since its launch in April 2010, approximately 47% of projects funded through this stream have been games, and CMF funding support has triggered approximately $50 million in production activity for independent Canadian-controlled game companies, for an average budget of approximately $1 million per project.
Given typical production schedules, only a handful of projects supported through the program have made it to market, and although the primary objective of the program is not commercial success, we are pleased to report that some projects have already done rather well. For example, Guacamelee, produced by Toronto's DrinkBox Studios, is an action-packed downloadable video game for home consoles. It has won a number of awards, including best of show at the Penny Arcade Expo 2012 and best downloadable game at E3 2012. DrinkBox has recently signed a deal with Sony for a substantial guaranteed royalty payment for the game to be released on their PS3 and PS Vita platforms.
Another example is Big Win Soccer, produced by Vancouver's Hothead Games. It was one of the first freemium sports games built for iOS and Android. It reached number one sports title in 25 countries on iPhone. To date, over 200 million soccer matches have been simulated. The CMF anticipates fully recouping its investment in Big Win Soccer over the game's commercial lifetime.
In addition to providing financial support to projects, the CMF seeks to further enable the success of the projects it funds by disseminating industry intelligence to its stakeholders, entering into partnerships with industry events, and promoting Canadian content and talent at home and abroad.
With respect to industry intelligence, the CMF commissions research on emerging topics, often in partnerships with other Canadian or international organizations. For example, this year, the CMF partnered in a study that Mr. Kelso mentioned, New Directions for the Financing of Interactive Digital Media in Canada, which examined the financing landscape for Canadian-owned companies in the interactive digital media industry. The findings of this study may be of particular interest for the committee's examination of potential incentives for the growth of this industry.
In summary, the study found that the future growth of the sector relies on a supportive business environment, ensuring access to the right forms of financing at the different stages of corporate growth. Given the dominance of small and medium-sized companies in this sector, most of which achieve revenues of less than $1 million annually, the study points to a generalized need for early-stage investment capital, particularly through venture capital and angel investment, as well as financing of operating cashflows.
Another priority for the CMF this year has been to partner in supporting the update of the Canadian Interactive Industry Profile, which Mr. Kelso also mentioned, which was last published in 2008. The study is now under way and should be completed in 2013.
Nathalie Clermont
View Nathalie Clermont Profile
Nathalie Clermont
2012-11-06 17:06
In terms of partnerships, the CMF will partner this year with a total of 38 industry events across Canada and internationally. For example, the CMF partnered with the Canadian Videogame Awards and conference in Vancouver, the Digital Alberta Awards, Interactive Ontario's X-Summit, GameON and Inplay, the Montreal International Game Summit, and many others. Last month we showcased some of the best Canadian digital media projects, including games, to an international audience at Metcom, the world's largest audiovisual market, where positive feedback was received on the quality and innovation of Canadian digital production.
In closing, I will say a few words about our promotion initiatives.
Last June, we launched the Canada on Screen website. The goal of the site is to feature and celebrate Canadian creative talent and productions. They run the gamut from television productions to games, from web content to software and applications funded by the CMF. Visitors to the site can find a lot of information on the projects, including information on the producers, the prizes and distinctions they have received and their overseas sales. There is also a photo gallery, a video overview and a selection of media coverage.
As of today, the site has about 60 digital projects and we add new ones each month. The three projects that we mentioned a little earlier are on the site too and we invite you to view them.
Mr. Chairman, committee members, thank you for affording the Canada Media Fund this opportunity. We would be pleased now to answer your questions.
View Terence Young Profile
CPC (ON)
View Terence Young Profile
2012-11-06 17:08
Thank you, Mr. Chair.
Thank you, everyone, for coming here today. We really appreciate your giving your time to help us with the study.
Mr. Cardin, can you tell the committee about the experimental stream of the fund? In other words, how many companies might access that fund annually, and how many projects are funded? How much money might they get for a project?
Stéphane Cardin
View Stéphane Cardin Profile
Stéphane Cardin
2012-11-06 17:08
Given that the program is designed to support innovation and projects that might be of a riskier nature, less of a commercial nature at first blush, the amount of funding that CMF provides can be up to 75% of eligible expenses, up to a maximum of a million dollars per project. We have two rounds per year. We support approximately 45 to 50 projects annually, and the program has been quite successful if we measure it in terms of demand, because since its launch in April 2010, on average, the level of demand to projects selected has been about 3:1, so there is substantial oversubscription.
View Rathika Sitsabaiesan Profile
NDP (ON)
Thank you, Mr. Chair.
You know when he says “her round” that it's me, the only female on this committee.
Thank you to all of you for joining us here.
My question is for Monsieur Cardin or Madame Clermont.
You mentioned earlier in your presentation about the small piece of the Canada Media Fund that is directed towards the gaming industry through their experimental stream. We had other witnesses who appeared before who mentioned the same thing. They also mentioned that it's not very much, considering the way the industry has boomed and grown, and maybe they would like to see it grow.
I'm curious to know what you think, if you think we should actually increase the fund in order to allow for more funding towards indie operations in the gaming industry, or maybe perhaps even create a new separate fund that would be available for the gaming industry. Would that be more useful? What would be the best way to expand the digital side of the Canada Media Fund?
Stéphane Cardin
View Stéphane Cardin Profile
Stéphane Cardin
2012-11-06 17:17
Well, first, I'd just like to point out that, as we said in our presentation, we support games through both streams, both convergent and experimental. On the convergent side, it'll be more like casual games and social games that accompany the television properties that we also fund. But we do fund games in that stream, and we've provided over $20 million in funding this year alone in terms of digital media content in the convergent stream.
The experimental stream, again, is one that is focused on innovation and applies to a very wide range of products, in fact, not just content, but even software applications. So we've funded web series, we've funded interactive web content, we've funded interactive books, we've funded apps, we've funded software—for example, Moment Factory's X-Agora software, which is used for interactive installations in different cities. So it's quite broad.
We have significantly increased the funding to that stream just over the few years that it's been in place, starting off from a standpoint of $27 million in 2010, increasing it to $33 million, and now to $36 million in the current fiscal year. It's the area of the CMF, I would say, overall, that has experienced the largest growth. But as I mentioned before, with a 3:1 ratio of demand to available funding, clearly there is a demand for more funding, particularly in the games part of it, which, as we've said, has accounted for almost half of what we've supported so far since 2010.
Carole Deniger
View Carole Deniger Profile
Carole Deniger
2012-10-30 15:46
Good afternoon. I will be making my presentation in French.
I am Carole Deniger, from SECOR-KPMG. It feels a bit odd to say that name because SECOR and KPMG merged very recently. My colleague Rob DePetris will speak to you afterwards. I will be making a somewhat more general presentation, whereas Rob will address specific questions and tax issues.
KPMG-SECOR's expertise in this sector is in both the tax and economic areas and in more strategic studies, particularly those that SECOR conducted at the time for Quebec, Ontario and Prince Edward Island and many industry clients.
At the risk of seeming to repeat what was said by our friends from the Entertainment Software Association of Canada who preceded us, I believe it is important to note all the profound changes that have been affecting the industry in the past few years.
We know that the recession hurt the market, but there have also been major paradigm shifts as a result of digital distribution, new platforms, the construction of mobile and online platforms, networked games, particularly social games, and all the new business models that have followed, with subscription and microtransaction models. So there have been some major changes to which Canadian and foreign businesses must adapt.
Incidentally, when we talk about Canadian businesses, I believe we are still really talking about businesses that are provincial or are based around major cities such as Montreal, Toronto, Vancouver and various hubs where solid expertise and real maturity have been developed. I believe those hubs have managed to position Canadian businesses on the global stage. That is also the case of foreign businesses because we know that most of the gaming industry's workforce is at large firms owned by major publishers such as Ubisoft and Eidos, but also by many national businesses and smaller but very dynamic players.
As for the growth issue, as a result of tax credits in particular, I believe we have achieved such a degree of maturity that this is not a priority at the present time. We have managed to build critical mass, expertise that is recognized and no longer challenged. Now we have to develop recognition related more to our content and success, and that is perhaps where we must focus our efforts, particularly at the federal level and across Canada. For the general public, what is made in Canada does not really exist. It exists for the professional industry because people know each other. Initiatives such as Game Nation are also starting to make our businesses better known here, but we are talking about an entertainment-related sector. So it is important to position ourselves as Canadians on the world stage.
What does that mean? There is obviously a marketing issue, but we have to make sure that there is support for intellectual property created here. We have to be able to maximize the success of that property, that is to say original content, to support it and to generate maximum profits. In fact, in certain respects, we are talking about a service industry that creates a lot of jobs. Now we have to think about creating value. That does not mean that we have to control everything here. I think it is important, particularly for games intended for very large audiences, to have publishers outside Canada. However, if we can retain more of our intellectual property, we will negotiate better conditions, earn larger royalties and generate more profits that will stay here.
That can be done through existing measures, in particular the Canada Media Fund, which is quite a large fund, particularly its experimental component. However, perhaps it should be adjusted to provide more support for the creation of original content. That is what we also call prototyping in the gaming industry. We have to get to at least the prototype stage. We obviously already have the research and development tax credit. However, tax credits are mainly granted at the provincial level, and we are well served in that respect.
Incidentally, I took another look at the KPMG study. As you probably know, it states that Canada is a mature region where digital entertainment costs as a whole are the lowest in the world. We are well served in that respect.
I do not want to go back over immigration, but the issue of work permits, like that of marketing and commercialization support, is becoming an increasingly important issue. The same is true for venture capital in general. I know you have funded studies on that topic, including this one, which is a very good study. It shows that there are obvious deficiencies in funding to assist business start-ups, particularly in the digital entertainment industry.
Thank you.
Rob DePetris
View Rob DePetris Profile
Rob DePetris
2012-10-30 15:52
Yes, I'm going to take a different tack on this.
I want to thank you for inviting me. It was so important to me that I gave up Tuesday night bowling.
Basically, my role at KPMG is tax, but in the past I worked at a video game company. I was vice-president of finance for a domestic company. I want to bring that experience in and touch on some of the things we did in Ontario.
Our goal, when we looked at this from an Ontario point of view, was to grow the industry. It wasn't about other factors, such as trying to create Canadian content and other things. We focused on one thing: creating jobs in a knowledge-based economy in Ontario. With that goal in place, what we looked at a lot was the tax credit system. We looked at taking a tax credit system that didn't work in Ontario and making it work.
We also looked at investing through business incubators. The federal government played a great role in this. We looked at how to help the entrepreneurs out there. Tax credits and entrepreneurial training are things I think the federal government should be concentrating on.
That's the reason things have progressed so well in Ontario, Quebec, and in places like Nova Scotia and Manitoba. I think B.C. was affected by a weak Canadian dollar at the time the industry started there. The tax credits over the last 20 years have been a replacement for a high Canadian dollar. The Canadian dollar back when B.C. created their industry was at 64¢ to 65¢ U.S., and now we have a Canadian dollar at par and we're replacing that with tax credits.
I think there's opportunity out there. I'm not saying the federal government has to jump into providing tax credits, but I think the SR and ED programs and other federal programs have helped. However, we must remember that in most video game companies, only 20% to 30% of the staff are programmers. The rest of the staff are artists, writers, and designers, people who aren't subject to the SR and ED credit. Even a lot of the programming people are not necessarily getting those tax credits, so SR and ED is only a small part for a video game company, whereas the digital tax credits offered by the province allow them to do a lot more.
That said, we need to concentrate on how to grow the industry. One of the things I'm not a big fan of, and this may be more personal than anything else, is the Canadian Media Fund. It does a lot of good things, but it's a $375-million fund. Why is the video game part of it a small fraction that is called “experimental”? How did a $67-billion industry become an experimental arm in Canada? I don't understand that.
This fund needs to focus a lot more on the video game industry. The other thing is, it's picking a lot of winners and losers, and I'm not sure that's always the best thing for government. I'd like to know how much return on investment they get from all these things they're investing in. How much have they actually gained? Can we put that money to better use than somebody sitting back and trying to figure out which video game they think is going to be commercially successful? I don't have the evidence on this, but I'd like to know.
Those are my initial thoughts.
On retaining intellectual property, perhaps there are ways through a tax credit system to do that. The biggest problem from the domestic side of retaining intellectual property is simply that most video games, other than some of the small mobile projects, are David and Goliath situations where a Canadian developer is being financed mostly by a publisher such as Ubisoft or Electronic Arts or some other big entity. There's no way you ever win the battle; if they're supplying the cash, there goes the intellectual property. It's very rare for a company to keep intellectual property.
The other thing I will quickly mention is the tax credits for investors.
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