Thank you, Mr. Chair.
Thank you for welcoming us today. It is a pleasure to talk about our industry. It is funny to hear Martin, whom I have known for a very long time, since we were both working at Ubisoft, and to see that we both share the same passion and concerns for our industry.
I represent Ubisoft, which is the largest developer in our country. Founded in France in 1986, this company established itself in Canada in 1997 in a studio in Montreal. It has gone from 50 employees in 1997 to 350 in 2000, to 1,000 in 2005. Today, we have 2,300 people working at our Montreal studio. That is without counting a studio in Quebec City that opened in 2005 and now has 300 people, and the Toronto studio that opened in 2010 and now also has 300 people. In 2008, we also acquired Hybride Technologies, a company that specializes in special effects for movies. It worked on films like Spy Kids and Avatar. This company now belongs to Ubisoft.
Canada's video game industry has 16,000 jobs, including 8,000 jobs in Quebec. That is a lot of jobs. We are the third most important country in the world in terms of video game production, after Japan and the United States, and the first country per capita. I think it is important to mention this. We are talking about 32,000 jobs in Japan and 25,000 in the United States. That is a positive growth for our industry and our companies. That allows us to create games that are leading brands in the video game industry. All you need to do is go to the video game fair, Electronic Entertainment Expo, or E3, which will be held next June, to see how well represented the games created in Canada are. At last year's E3, Ubisoft's four major titles were games created in Montreal and Toronto. In our view, that is really a big feather in Canada's cap.
Over the past 15 years, Ubisoft has launched more than 80 games, including several blockbusters, such as Tom Clancy's Splinter Cell, Tom Clancy's Rainbow Six, Just Dance, and last but not least, Assassin's Creed. Assassin's Creed is definitely the most popular game of all of them. Since its debut title in 2007, we have launched four games. The fifth one will be launched next Tuesday. So it is a very exciting time for us in our office. We look forward to the game being launched. We are talking about 38 million units sold, generating revenues of $1.2 billion. Furthermore, this brand has gone beyond the frontiers of video games, since it has its own encyclopedia, comic books, novels, and will soon be brought to the big screen. In the past, we had licences, for example in the case of the movie Avatar, but we are now putting our private labels forward for movies, for example the Assassin's Creed brand.
Earlier Martin stressed an essential point, but I think it is important to reiterate it. It has to do with our industry's international profile. I know that our games have a home in Russia, South Africa, Australia, Japan, everywhere in Europe and in the United States. On those games, it says “Ubisoft Montreal presents” or “Ubisoft Toronto presents”. The name of the city is always there. We feel that this international outreach is very useful for our country. That is one of the points I want to underscore. I see that the film, music and book industries are often extensively covered by the media. But the video game industry is more significant than those three industries in terms of revenues. We are talking about more than $50 billion U.S. a year. So it really is a major industry.
The advantages of doing business in Canada are numerous, starting with attractive fiscal policies in certain provinces, especially in Quebec and Ontario, with respectively 37,5% and 40% in refundable tax credits, not to mention federal SR&ED (Scientific Research and Experimental Development) credits. Beyond fiscal incentives, we have among the lowest tax rates in the world, excellent universities, a culture of innovation, and a cosmopolitan, multicultural population.
Although we are very pleased, this success remains fragile. I would like to emphasize three elements that are essential to the growth, innovation and commercial success of our industry.
Innovation is without a doubt the first pillar to focus on. This innovation is two-fold: creative and technological. In terms of creativity, we must count on an experienced workforce who can use their skills and knowledge to suggest innovating ideas. According to a recent TECHNOCompétences study, developers in the province have identified over 1,000 jobs to fill in 2012, the majority asking for two to seven years of experience. Also according to this study, the annual growth rate of the workforce in our field in Quebec has been 23,4% between 2002 and 2011. Let me remind you that Quebec represents half of the video game industry in the country. So it is significant.
As my colleagues said, in this context of full employment, companies have to look internationally. At Ubisoft, 30% of our 467 hires in 2011-2012 were from abroad.
Nevertheless, there exist two major issues that I would like to talk about. The first is receiving labour market opinions. The official process, although well-managed by the federal government, varies from one province to another. Quebec offers a simplified process for certain job categories, allowing us to get an LMO within four weeks.
However, this process covers approximately 50% of our requests. The delays for the rest are much longer. In the rest of the country, the accelerated labour market option is not restrictive and quicker. So we think the process is worthwhile. I should mention that this process was adopted quite recently, and it is a process that has made life significantly easier for us.
The second issue is processing delays at the embassies. I should note that, for some countries, individuals need a visa to come to Canada. We are talking here about a delay of two to four months. It could take up to six months, as occurred in a case at our company. In fact, we have been waiting for a Chinese employee for six months, and this is an internal transfer. An Ubisoft employee in China needs to transfer to come and work at Ubisoft in Canada. He has been waiting for six months.
It is the same story for Indian, Chinese, Brazilian, Ukrainian and Romanian employees, who make up a large proportion of programmers. So we need to wait a long time before being able to use their services. I'm talking about a delay of six months when a game's development cycle lasts 24 to 36 months typically. That's significant.
As my colleagues said, our industry has faced several shifts. There will be a new generation of consoles; the Wii U will be out soon. The rumours are persistent. There is talk that the other manufacturers are going to launch them. There are tablets and consoles. So this involves massive investments in R&D, which are essential to ensure our competitiveness internationally.
The latest budget plans for a reduction of the credits Ubisoft has asked for, and I suspect the same situation in the industry. Concretely, the budget reduces the general rate from 20% to 15% and the eligible portion of salaries and costs for employees who take part in R&D from 65% to 60%, then 55%. This is a significant drop. For Ubisoft, these changes represent an important shortage at a key moment of its evolution in a new market.
As I have mentioned earlier, the growth rate is significant, namely, higher than 20% in the past 10 years, but there is a lack of workforce. To palliate the lack of workforce, companies count on the accelerated development of juniors. To do so, they need to establish relationships with universities and colleges and massively invest in continuing training.
Nevertheless, there currently exist three major issues that hinder continuing training: first, the fast-paced evolution of required skills; second, the lack of interest for teaching from seniors in the industry; and third, for those who do want to, the lack of educational support to accompany seniors who, despite their technical expertise, have very few skills in pedagogy.
To answer these issues, Ubisoft inaugurated a campus in 2005 to train the next generation. This initiative ended in 2010 and was replaced by another program to introduce the next generation to video games. This is an initiative for 12 to 15 year olds. It includes a base camp, an immersion camp for 15 to 18 year olds, a game lab competition and a summer school for 18 to 25 year olds.
Since the creation of this program, we have hired over 30 people. These are talented people recruited directly through these initiatives. We therefore believe that this kind of process is important. Our experienced players get involved and see their involvement as a form of social responsibility, without having to sacrifice a part of their compensation, or their participation in the production of games, which is also important. With the support of the various levels of government, this type of program can be deployed elsewhere in Canada.
Finally, commercial success is a combination of all the elements I have mentioned. You need to have an innovative idea supported by a powerful technology and an experienced team. It is a mathematical formula that will contribute to commercial success. If you take away a technology and the qualified people, you will not be able to produce a quality game.
We therefore believe that investing in research and development, in greater international mobility and in continuing training are conditions of success in order to foster growth, innovation and commercial success in our industry.
Thank you very much.