Thanks, Don.
It's typical for witnesses in a situation like this to speak with great certainty about the industries they know. We thought we'd actually tell you about some stuff that we don't know because it might inform you on some of the things that you want to inquire into.
Surprisingly, one of the things we don't know is the precise size and scope of the digital media sector in Canada and in Ontario. The Canadian Interactive Alliance, the trade association that we and Alliance numérique are members of, have done some studies in the past. They are sampling survey studies. They don't get a full sample of the sector, but roughly speaking, with the best numbers we have, there are about 3,000 digital media companies in Canada, about 1,000 of which are in Ontario. It seems like a simple thing. One of the things we as a trade association have as a goal and as a priority is to try to do a proper mapping of the sector in Ontario and find out things like the extent to which companies depend on government support, because that simply isn't known. That's something we're hoping to do with the Ontario government around venture capital in the next little while.
The other thing we actually don't know much about is precisely how the synergies among subsectors within the digital media industry and among the digital media industry and traditional media work. We know it's important, and we know it's a competitive advantage for Canada and for Ontario, but we don't know exactly how it works. That might be an interesting thing to understand a little more, because if we understand it a bit more, we can replicate it in perhaps a more formal way.
Tax credits have been spoken about. I would agree with what Rob has said about their importance in building the industry and building companies. Where we have been less successful is in the early-stage support. I define early-stage support as both early stage in the life of a company and early stage in the life of a project. That leads down two paths of VC, venture capital, support for early-stage financing of companies and project support for specific projects. The challenge there, quite frankly, is we don't know what the right mix is; we don't know how to do it. Inevitably you get to the problem that Rob alluded to. If you're not careful, you find yourself picking winners and losers rather than supporting all parts of the sector.
Another thing we're still not really that sure about is whether the design of federal and provincial credits, for example, the intersection of SR and ED and the provincial tax credits that support digital media, work in an ideal coincidental way or whether it's actually a perfect synergy. It's fascinating when you think about it. SR and ED was designed for something entirely different. You all know a bit of the history of R and D tax credits and the controversy surrounding that, but SR and ED does sit there so importantly on the technology side, and then digital media tax credits, in Ontario and Quebec, in particular, sit there on the content side. They seem to work very well together, but we don't actually know if there are other ways we could get them to work better. Are there gaps between the two that could be improved?
All that said, and this is difficult for public policy-makers, we think public policy has to take some chances and take some risks and experiment. We're an industry and a technology that's having to reinvent itself all the time. We've always taken risks. We're always going into new territory. In this area in particular we think government should do likewise. Be prepared to experiment. Be prepared to examine what you've done. Be prepared to refine what you've done. There's no shame in not getting it right precisely the first time. If we want leading-edge digital media companies in Canada, we're going to need a leading-edge public policy framework as well.
Thanks very much.