Canadian Heritage Committee on Nov. 1st, 2012

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

That leads to my next question, which is maybe more of a recommendation.

Is there a need for support of marketing of what the industry does? Could government have a role in helping you market what you can do to help other companies connect and develop products? I'm not really talking about marketing your products. I think you do a very good job of marketing your products the way they are, but in marketing your services, is there a role for government in supporting your industry to market their services not only domestically but internationally? I'll open that for everybody.

You can go first, Mr. Seck.

[John Mark Seck]

For sure, additional government support in marketing on the service side would be worthwhile, just because it would broaden the base and would require fewer resources from us to do that work. Our company in particular is in transition to a product model right now. I think we will maintain a service actively through our business, but it has proven after a long period of time to be a difficult row to hoe for sustainability.

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

Does anyone else have something to say on the marketing of services to other companies? Is there a role for government in that?

[Michael Johnston]

For my part in Halifax, I would give you a resounding “yes” to that, Mr. Armstrong. My business is largely export-driven. The more help I can get that drives dollars across the border into this region, the better it is for Canada. I would also argue that those efforts would pay doubly in that they help us with recruiting. The more people know about the good work happening here, the more people will be attracted, not only people willing to spend dollars but also people looking for great jobs.

[The Vice-Chair, NDP, Pierre Nantel]

Thank you, Mr. Johnston. Thank you, Mr. Armstrong.

Mr. Scott Simms has the floor.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Thank you.

Mr. Johnston—and I will get reaction from others as well—do you deal with EDC, Export Development Canada?

[Michael Johnston]

I do, but not very much, I will confess. We are actually in conversations with EDC now, exploring receivables insurance. We are familiar with a couple of the other programs. It is not been an organization we've had deep involvement with yet over the lifetime of our company.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

To the west coast, would you agree with that?

[Lance Davis]

Absolutely. I echo Mr. Johnston's comments. We at Slant Six are working with EDC and have had a great rapport with them over the past two years. I find them to be massively proactive. They have actually set aside a specific fund for Asian video game developers. They are very large over there, you must understand, with Nintendo and Capcom being major players. EDC can very much facilitate their investment into our game projects. DFAIT has also been involved. We keep in touch with them. We are talking very confidentially with people from Russia right. It's cool that DFAIT can jump into that program.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

I'm going to go into a line of questioning I took with the guests from our first meeting.

Since we are the committee for Canadian heritage, a lot of what we deal with has to do with tools like the Canada Media Fund, which many people use, many clients use, in the production of movies, television shows, and so on and so forth, and to a lesser degree in your industry as well.

When it comes to Canadian heritage, it's a mechanism that mostly requires investment up front within the industry, including by the CBC, all the departments, and even the museums. All this stuff comes up before you endeavour to grow your industry. We're hearing that the vast majority of benefits are coming on the back end. In other words, you have to make that investment first. Then you get your federal benefits, such as the SR and ED tax credits and so on.

Is there any way the federal government could play a role in being more upfront, meaning being on the front end of an investment into a project?

I will go bicoastal again. I am from the east coast, but I will go to the west coast this time.

[Lance Davis]

I'd like to think there is a way for government to be proactive. For instance, if a federal digital tax program were implemented—and again, I'll bring up our good friends at EDC, who work in conjunction with our bank, the Royal Bank—although those credits might be off in the distance prospectively, perhaps triggered by the end of a fiscal period, through EDC's guarantee program we're able to access some of those funds today. That's a very proactive program. Something of that ilk would be very beneficial.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Would you comment, Mr. Johnston?

[Michael Johnston]

I would loudly echo that. That was exactly the comment I wanted to make as well. Banks in this end of the country are familiar with the R and D programs and the SR and ED tax credit programs. They are familiar enough that they are comfortable financing against some of those projects with the right other government partnerships in place.

The digital media tax credit is fairly new. It's only provincially administered and is not well understood by the banks, so while it could be lucrative, there really is no upfront financing possibility against it. It really is something that we need to either go find third-party financiers for or float ourselves, with the hope that maybe we will recover some of that downstream 18 months after our fiscal year end. Something that is a bit more transparent and more universally applied, which financial institutions in Canada can get comfortable with, would certainly help open up opportunities to finance projects earlier in their life cycle.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

Yes, something that's more up front obviously would give you better footing for achieving financing in the future, I would assume. It's just a comment on my part.

Mr. Seck, would you like to comment on that as well?

[John Mark Seck]

I'd agree with that, yes.

[Scott Simms, Liberal, Bonavista—Gander—Grand Falls—Windsor, NL]

All right.

How much time do I have?

[The Vice-Chair, NDP, Pierre Nantel]

You're almost done, actually.

Does somebody else here want to comment? After that, we will be done.

I would like to thank all of you for participating in this study today. Mr. Seck, thank you very much, and thank you also to Mr. Talbot, Mr. Katzman, Mr. Johnston, Mr. Davis and Mr. Chenard.

By the way,

was “Slant Six” a reference to that famous Chrysler engine that never died?

[A voice]

Yes.

[The Vice-Chair, NDP, Pierre Nantel]

I think it's an AMC engine.

Anyway, thank you very much, guys.

We will interrupt the session for a moment because we will be dealing with internal business.

We will resume our meeting as soon as our guests have had the opportunity to leave the room.

Thank you very much.

[Proceedings continue in camera.]