B.C.’s Declining Video Game Industry
by Ben Gardiner ~ October 2nd, 2012. Filed under: Uncategorized.As Richard Warnica explains in his article entitled, “Vancouver’s video-game industry is slowly disappearing,” British Columbia has become the unfortunate victim of a lack of economic competitiveness; this has led many businesses out of B.C. and on to a greener pasture. The Canadian video gaming industry, which, for many years, was based mainly in Vancouver, is moving almost entirely to Ontario and Quebec.
Why? The answer is simple: input costs are much cheaper in Eastern Canada due to new tax incentives provided by provincial governments. In Ontario, for example, the provincial government has offered a 37% labour tax credit to all video-game developers. This compares rather favorably when put side-by-side with B.C.’s 17% labour tax credit – not to mention sky-high commercial rent costs in the Lower Mainland.
How can local governments increase economic competitiveness and create thriving industry in their region? Taxes are an inevitable cost to business in order to create societal benefit; which industries deserve tax breaks and at whose cost should these subsidies be incurred? Finally, are there other, more effective, ways of attracting certain business to invest capital in a particular state/province?