Why Quebec's Video Game Subsidies Program is Worth Watching
The video game industry is worth billions of dollars, but this sector has gone through highs and lows on its way to becoming a behemoth. In the late 90s, the industry was still recovering from a recession a decade prior and its future was uncertain. Yet, in the middle of it all, lobbyist Sylvain Vaugeois and Quebec finance minister Bernard Landry took a gamble to improve the province's ailing economy via a refundable tax credit for video game companies.
Today, this de facto subsidy is credited for attracting French video game giant Ubisoft to the city of Montreal, and creating an entire industry in the province. However, the scheme being a tax credit, it is ultimately the taxpayers who are footing the bill for large studios. With additional concerns looming over the horizon about competition within the industry, some wonder whether this good idea might have run its course.
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The Refundable tax credit for the production of multimedia titles covers up to 37.5 percent of labor expenditures for game studios if one of their multimedia titles is available in French. If no title is available in French, then only 30 percent of labor expenditures are refundable. Furthermore, the tax credit only applies to up to $100,000 per employee, so any salary that exceeds that amount will not be refundable under the policy.
The Quebec government estimates that this subsidy cost taxpayers $253 million in 2021. In exchange for that sum, Quebec is a global video game hub centered around Montreal where over 200 studios have set up shop. Last year several big names announced plans to move into the city, which most recently includes the studio behind Genshin Impact,
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