Canada Will Learn Why Video Games Tax Breaks Go Sour

Canadian devs leaving due to tax breaks no being lovely enough

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Canada Will Learn Why Video Games Tax Breaks Go Sour
The problem with tax breaks - governments using short term incentives to make companies really, really like them - is that companies are basically greedy and two-faced with no loyalty and will head to whoever offers them the best tax-breaky bling. Canada is learning this lesson.

Basically, the major Canadian province of British Columbia had been seen as attractive to games developers due to tax incentives. These expired recently so... companies are moving to other provinces.

According to John Jennings, executive producer at Longtail, a studio in Halifax, Nova Scotia: "“With the decline of subsidies in British Colombia, studios can no longer support those (high) salaries on a permanent basis. We’re certainly seeing development shift increasingly eastwards within Canada as a result. There are probably double the number of studios in Halifax now, compared to five years ago."

Jennings is wary about the fact that if one province can lose out to another due to lowered tax breaks, then so can one country to another. He told Develop, "Chasing the subsidies around the country is something we need to avoid though. We need to aim for long-term stability and avoid a dependency on subsidies caused by offering crazy salaries that are reliant on subsidies being in place."

It won't be long before India, Brazil and of course China start offering incentives that make company execs smile and then email their staff saying, "Good news guys! We're relocating to Shanghai... well, some of us are..."

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