Media Centre: In the News

Entertainment Software association wants changes for digital entertainment
Published April 15, 2010

By MARKE ANDREWS, Vancouver Sun

VANCOUVER — The Entertainment Software Association of Canada (ESAC) wants the federal government to help the industry by eliminating or reducing trade barriers and customs tariffs, easing immigration restrictions to allow talent to come to Canada, and updating and enforcing copyright laws to protect Canadian intellectual property.

The 22-page report, entitled Game On, Canada! Playing to Win in the Digital Economy, also calls for increasing the labour pool with better education programs for students in math, science, technology and digital arts, and removing barriers to foreign venture capital while developing venture capital within Canada.

Regarding the latter, ESAC supports the federal government’s removal of the Section 116 certificate process tax barrier of the Income Tax Act, and calls for the creation of a new interactive digital media fund separate from the current Canada Media Fund, as well as improved tax credits in the area of digital media.

Addressing international trade, ESAC states that more than half of video game companies surveyed reported 90 to 100 per cent of revenues come from exports, yet federal tariffs restrict trade among countries.

“Trade barriers, customs tariffs and other protectionist policies abroad can severely impact Canadian businesses,” the report states. “For entertainment software, high tariffs (up to 30 per cent) and additional taxes in certain foreign markets translate into higher prices for software, consoles, and peripherals, and dampens demand for legitimate products, which hampers growth of the Canadian industry.”

The report urges the federal government to coordinate with provincial governments a plan to incorporate “digital literacy” into children’s school curriculae. It agrees with the Information Technology Association of Canada (ITAC) that: “We need more children taking math, science and technology education streams and more grads in related disciplines, more graduates with the right package of education (essentially more people with a combination of technology and business acumen), and better integration of skilled foreign workers.”

The talent pool will feed the entertainment software industry, expected to grow by 29 per cent over the next two years, only if Canadians are better educated in disciplines like science, technology and art, and only if federal restrictions on foreign workers are eased.

“If Canadian companies are prevented from hiring talented and skilled foreign workers due to inflexible or cumbersome government policies and procedures and equivalent domestic talent is not readily available, companies may be forced to complete projects with compromised staffing or possibly even relocate their projects to other jurisdictions where the talent is available.”

Canada must modernize is “aging copyright regime” to bring it into the digital age, the report states. This would include not only reforming copyright legislation to prevent online piracy, but enforcing copyright laws. Among the ways to do this, ESAC says, is to empower Canadian customs officials to make seizures of pirated products at the border without a court order.

In both the Speech from the Throne and the federal budget, the ruling Conservatives said it will develop a Digital Economy Strategy.

A large player in digital entertainment is the video game industry, which employs 14,000 people, has a compound annual job growth of 29 per cent, and generated $2 billion in annual revenues, contributing $1.7 billion in direct economic activity in the Canadian economy.

mandrews@vancouversun.com

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