Alberta looks into reviving tax credit for video game developers

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Video game developers scored a big win Tuesday with the potential revival of the Digital Media Tax Credit.

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Premier Danielle Smith issued a mandate letter to Technology and Innovation Minister Nate Glubish calling on him to develop a tax credit proposal for the video game and digital media industry to make Alberta competitive with Ontario, B.C. and Quebec.

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The NDP originally installed the tax credit in 2018, but it was axed by the UCP under former premier Jason Kenney in his first budget in 2019.

While nothing is set in stone, local game developers were excited about the potential shift.

“We think the tax credits would be incredibly powerful for the province if they were to return,” said Mike Lohaus, president of the Calgary Game Developers Association (CGDA). “We just want Alberta to be competitive provincially, along the same lines as any other ecosystem.”

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Lohaus and Vieko Franetovic together created the first gaming app out of Calgary for the platform Steam in 2012 called Krunch.

Calgary’s tech sector has garnered record venture capital investment over the past five years, and is on pace to topple 2021’s high-water mark of $495 million.

However, Alberta has been bypassed on investment in the video game development industry by B.C., Ontario and Quebec.

“The digital media and entertainment sector grew in other provinces while Alberta missed out on investment, and activity in the sector slowed down,” said Deron Bilous, NDP economic development and innovation critic. “Alberta has now lost three years to our competitors in a quickly evolving industry.”

Glubish was not available for comment Tuesday.

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Despite the lack of a tax credit, game developers have been busy in Calgary. The CGDA has gone from 15 members when it started six years ago to more than 1,100.

“Alberta’s got the beginnings of a really strong game ecosystem that we just need to have those tax credits come in,” said Lohaus. “Those will help not only the big studios, but also some of the smaller independent studios that are growing from the bottom up.”

The mandate letter also includes the prioritization of the Alberta Broadband Strategy and the Alberta Technology and Innovation Strategy promoting the province’s tech sector.

Alberta’s tech sector has largely managed to withstand some of the slowdown other provinces have experienced. On Tuesday, Calgary-based Attabotics announced it had secured $96 million in a Series C-1 fundraising round.

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Calgary has also attracted a number of global companies to the downtown, including Irish financial technology firm Global Shares, which set up its Canadian headquarters in the city last month, as did Infosys, MPhasis and Sidetrade since the beginning of the summer.

The University of Calgary and Avatar also officially opened the Energy Transition Centre in The Ampersand tower to help streamline the development of green technology for the transition to cleaner energy.

Meanwhile, the IoT North Conference launched its two-day gathering in Calgary this week. The conference runs Tuesday and Wednesday at the BMO Convention Centre, and has brought together 30 tech companies for a trade show, a full lineup of speakers and 1,000 registered attendees.

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Jennie Price, marketing and communications manager for Connect Partnership Group, which organized the conference, said there has been a 22 per cent growth in tech talent and total tech jobs over the past five years in Calgary — an increase of 7,400 tech jobs in the city between 2017 and 2021 to 40,600.

To keep the momentum going, Price said there needs to be more opportunities to meet as an industry and have these discussions while focusing on educating the next generation.

“Really planting that seed early so that it’s something that is ingrained, and that you grow into as you evolve and learn and grow as a professional in your roles,” said Price.

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Twitter: @JoshAldrich03