Canadian Heritage Committee on Nov. 1st, 2012

[Lance Davis]

Yes. If I may, I'll give a brief commentary.

You might recall the annual revenue number of $55 billion that I mentioned. By the way, that number is forecast to grow globally at 8% for each of the next three years, which is not an insignificant number. Our friends at the Entertainment Software Association of Canada predict that the entertainment software industry will grow 17% annually over the next few years.

There's ample opportunity for continued growth, and we do see that happening. However, we do need the right incentives and friendly legislation to help us capture our fair portion of that here in Canada.

[Parm Gill, Conservative, Brampton—Springdale, ON]

Perfect. Thank you.

My second question is regarding the entertainment software industry's skilled workforce.

What challenges do you face in recruiting and retaining programmers, game designers, and artists? Is it beneficial to have more timely access to temporary foreign workers?

[Michael Johnston]

Yes, I suppose it is. As I mentioned, the temporary foreign workers we've tended to engage have been people with specialized skills—more senior and experienced skills.

We have a fairly diverse portfolio of clients across a number of media sectors and a number of different specialized technologies. We're doing work with a lot of adaptive video, for example. Most of the video you would watch on MTV's website is delivered through technologies that we have engineered and built. We do a lot of work with adaptive mobile technologies and augmented reality tools, such as interface technologies and game control mechanisms.

A lot of these things are emerging technologies. We're able to invest in some of that work here in Canada. We have people who are capable of leading that charge, but often our clients need help quickly. Opportunities come up very quickly, and they leave just as quickly. Being able to look globally for the very specialized skills, sometimes a skill that may only be available in a handful of places the world over, helps us to win an opportunity we may not otherwise be able to take advantage of.

Being able to at least go back to looking at immigrant labour, temporary foreign workers, I think would be essential. Realistically, that door has essentially been closed to us. Opportunities come up and disappear too quickly. We usually have, at most, one month to turn an RFP response to most of our large media clients, and it can take two to three months to even engage a foreign resource any more than on a sort of consulting basis.

[The Vice-Chair, NDP, Pierre Nantel]

Thank you, Mr. Johnston.

Mr. Andrew Cash now has the floor.

[Andrew Cash, NDP, Davenport, ON]

Thank you.

We've heard in this committee three broad themes. One is that the access to broadband is not where it needs to be in our country. We've heard that in the labour gap that exists in this industry, it's taking too long, and therefore opportunities are being lost. We've also heard that the one-two punch of a high Canadian dollar and the reduction in the availability of SR and ED dollars has also impacted this industry.

My friend across the way has also suggested that we've lost a number of manufacturing jobs. His number, though, is woefully under the mark. As we know, 300,000 to 500,000 manufacturing jobs have been lost.

We need to support an industry like this that's creating jobs, that's growing, so it's very important that we hear this testimony. This is a multi-faceted, complex industry. I'm curious to know if there are voices that we're not hearing at this committee yet that we need to be hearing. I'm just curious.

Our witnesses have all delivered some very helpful testimony. Do you think we should hear from other groups or individuals or stakeholders that we may not have heard from? I'm opening that question up to anybody.

[Dennis Chenard]

I might be able to jump in on that.

Here in Vancouver, with the Centre for Digital Media and the masters program, we were originally thinking that the traditional triple-A studios in the gaming industry were going to be the industry that we were serving by producing talent and helping them with R and D work, which is another thing we do here.

We also found that there's a strong start-up culture that's really come out of Vancouver. We're seeing a lot of student-initiated companies, as well as initiatives in partnership with some of the recently laid-off employees in town, who have formed companies. Any incentives that can recognize that these small one- to five-member teams are being formed that may become the next Flickr or Club Penguin or HOOPS suite.... We've had a number of big successes come out of small teams. Everything grows that way; our industry did, too. Don Mattrick's EA Canada started off as an indie. There's a strong start-up culture.

I think any programs we can have in place that help at the studio level, the larger studios.... We're just seeing that effect here in Vancouver with some of the larger studios that have pulled out of Vancouver. We had a strong relationship with Ubisoft in Vancouver, but they pulled their studio out of Vancouver and relocated it to Ontario. Rockstar had done business in Vancouver for a number of years, and they've relocated to Ontario. Slant Six was a larger studio that has dropped in size recently as well.

The small and mid-sized companies haven't made up that entire gap yet, but there's a lot of opportunity there and I think across Canada. A lot of studios have done work-for-hire, working on non-original IP, meaning licensed content, but I think if we can incentivize small businesses to create original IP, Canadian-owned and Canadian-controlled assets, we'll be doing the economy a favour.

Thank you.

[The Vice-Chair, NDP, Pierre Nantel]

Thank you, Mr. Chenard.

I believe Mr. Talbot wanted to add something.

[Denis Talbot]

I have a suggestion for future meetings for your committee. I think it would be interesting for you to hear from people working in independent gaming. It would be good to hear their perspective and know how they feel about the industry in general, and to hear what they have to say and know a little bit more about where things are going.

As Mr. Chenard said, it's a trend that will likely keep on growing.

[The Vice-Chair, NDP, Pierre Nantel]

You have 30 more seconds.

[Michael Johnston]

May I, from Halifax, respond as well?

[The Vice-Chair, NDP, Pierre Nantel]

Yes, go ahead.

[Michael Johnston]

I'll make two quick points.

One that may be worth looking at is companies that provide cloud infrastructure. Much of our technology delivery, as Mr. Armstrong alluded to, is moving to the cloud for digital download. We've seen a number of clients who want to use cloud infrastructure not move forward with projects, particularly Canadian-based projects, because most of the large cloud hosting environments tend to be based out of the U.S., and folks here in Canada are worried about exposing themselves to Patriot Act things in the U.S. that mandate the release of personal and private information. More infrastructure in Canada to allow us to support the large domestic cloud-based projects might be interesting.

Another thing that I alluded to quickly in my remarks is that it may be worth thinking about gaming not just for entertainment but for serious gaming purposes. I think we're all familiar with serious games in things that I mentioned, such as aerospace and defence, health care, and manufacturing simulation. As we lose manufacturing jobs, a lot of times jobs like that are moving toward more automated processes, and having simulations and trainers may be a way to leverage some of the subject matter expertise in some of those personnel who maybe have lost their traditional jobs.

[The Vice-Chair, NDP, Pierre Nantel]

Thank you, Mr. Johnston.

Mr. Scott Armstrong has the floor.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Thank you again, Mr. Chair.

I'm going to spread the questions around this time.

Mr. Katzman, in Sheridan College, are you expanding the seats in the programs you're offering, or are you serving just who applies? How does your selection of students work?

[Prof. Avrim Katzman]

We're far oversubscribed in terms of applications. Our applications-to-accepts ratio is probably on the order of 7:1, but we are continuously expanding. This year we're doing an additional section intake of 25 students in animation. Our Bachelor of Applied Arts in game design is a brand new degree, which will start off with an intake of 75 students per year and grow to 100 over the next two years. We're increasing our intake year by year.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

So you have actually allocated a whole program based on this industry to support the human resources need in this industry.

[Prof. Avrim Katzman]

Absolutely. It's a bachelor's degree, plus another graduate certificate as well.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

At Sheridan obviously you're trying to fill a niche ahead of other people. Education is like any other business in some ways. Are other institutions across the country also trying to add seats and add programs to support this industry?

[Prof. Avrim Katzman]

I would suspect that virtually every community college in Ontario is addressing this issue and has some sort of program. Some of the universities are migrating towards providing training in this area. I know Brock University is contemplating a degree in game design as well.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

What type of support do you give the students to connect them with jobs when they graduate? Is that a role you work on at Sheridan College quite heavily?

[Prof. Avrim Katzman]

One of the main features of our program is that annually we have a showcase of talent, which draws employers from all over the world. That's when the Pixars and the Disneys and the Ubisofts and the Rockstars come to Toronto. They'll hire students on the spot, so it's virtually a job fair that we have annually. We bring in representatives of companies as mentors to students. They have a chance to observe talented young people, and often hire them in the middle of their education, which we find a little irritating, but in some ways gratifying as well.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

It's almost like they're early graduates, in a good way.

[Prof. Avrim Katzman]

Yes, in a good way.

[Scott Armstrong, Conservative, Cumberland—Colchester—Musquodoboit Valley, NS]

Mr. Seck, you talked about this company that found you and asked you to engage in a project to build an iPod for children because of your background experience in developing products for younger people. What was it about your company that attracted this innovation? Are you one of the few companies in Canada that directly targets young people for this type of development, or were you just lucky to have this person find you?

[John Mark Seck]

It was a combination of both. We had the focus that she required. Our focus has long been on interactive software for young people, so I think it was a good fit at that point, and a good choice for her. It's proven to be a good choice, because her company is quite successful right now with her initial product release.