Industry Committee on Feb. 24th, 2014

[David Wilks, Conservative, Kootenay—Columbia, BC]

Thank you, Mr. Chair. I believe I'm just about out of time.

[The Chair, Conservative, David Sweet]

Thank you Mr. Wilks.

Now it's on to Mr. Harris for eight minutes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you to everyone for being here.

Mr. Moisan hit the nail on the head about being cutting edge. While Canada is a world leader—we're number three in the world in game development; we're first per capita—and that was the result of our having many years of competitive advantage, it's important to realize that's no longer the case. We do not have many of those competitive advantages anymore, and the rest of the world is working hard to catch up to us and overtake us.

Mr. Lutz, you were briefly talking about the FIFA franchise, which is actually the only sports game you developed that's still on PC, and that's because of how strong it is worldwide. As I understand it, you're in Burnaby and you're actually competing with the other EA development shops around the world. New Zealand, for instance, has a more streamlined temporary foreign workers program that you could take advantage of, and is pitching really hard to take some of those games away from Burnaby and develop them there. Now you even have companies that are competing internally with other jurisdictions, and if we lose those jobs, those franchises, that's going to be a serious economic hit.

It's really important to see how critical this is, because these are jobs that pay well above the national average salary. They're family-supporting jobs. They're high-skilled, high-valued jobs. The world is not going to get less digital in the next 20, 30, 40, 50 years. The United States has an even bigger problem than we do, where there are 150,000 programming jobs being created there each year, but only half that many people are actually graduating in that field. We have a similar problem in Canada, where we're actually not able to keep up for the talent. Educationally speaking, we have to work hard to get more people into those areas. Familiarity with computers and educational programs certainly helps.

Mr. Shariff, earlier you were talking about the CSA and NASA cutbacks to 0%, and that you are now focusing more on commercialized products. As a company, that's the decision you have to make because you have to bring enough money in.

[Khaled Shariff]

Yes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Is that actually hurting the educational components?

[Khaled Shariff]

It's a good question.

To create a sustainable model for education, I believe, is the correct path. I've been doing this for eight years. The Canadian Space Agency's first contract with Project Whitecard was six years ago. You can't just throw money at the problem. We need natural selection to improve the education in North America, and we need it faster than it's happening. We've made a decision to go into for-profit, sustainable product. NASA made that decision before we did. They said, “We're going to give you our brand, and you build a game and sell it.” That's good. We will see how we do.

I don't like competing just for grants. I would rather that this just caught fire and that we created a method to go forward.

[Dan Harris, NDP, Scarborough Southwest, ON]

Believe me, we would all appreciate it if educational gaming caught fire, but most people, when they are looking for their gaming, are looking to escape that kind of stuff.

[Khaled Shariff]

That's right.

[Dan Harris, NDP, Scarborough Southwest, ON]

It's always a push. Of course parents will push the kids in front of the educational programming, the educational games, but at the end of the day, the kids will want to play the first-person shooter games or other things.

That's a larger, broader issue that exists in this sector.

[Khaled Shariff]

You have to be about four times better. I mean, look at something like Minecraft being used for education. That's maybe the best-selling game in the world, and it's used for education.

[Dan Harris, NDP, Scarborough Southwest, ON]

Yes. That was a pit I managed not to fall into myself with “mine-crack”.

I already have far too many games and not enough time to play them.

Monsieur Moisan, we're talking about all the different platforms—I'll follow up later with Jonathan—and about cross-platforms and importing. In order to get a program out to each platform, how many more staff do you need, how much more difficult is it, and how much money do you have to spend generally?

[Pierre Moisan]

We need a small team per platform. We have a core team for the main game. Yes, we spend, my God....

Usually it's worth it for a platform, though. Importing is not like developing from scratch. It's worth it to do that, and it's technology that's worth being used.

I'm sorry, Mr. Chair, but I have to make a short comment. I have a plane to catch at 6:30 p.m., and I'm afraid the time is now too tight. I will have to excuse myself.

Thank you for your attention. I will be available to answer your follow-up questions.

Thank you very much.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Moisan.

[Dan Harris, NDP, Scarborough Southwest, ON]

Jonathan, I'll follow up with you on that specific question about cross-platforms, because obviously EA does a number of different games on all kinds of different platforms. Really it means having a team that's dedicated to making it work on each platform.

If you wanted to chime in on what you think the challenges are that Canada is facing vis-à-vis temporary workers in the skilled area, that would be important. I would just reiterate that with the temporary foreign workers program there have been a lot of difficulties with it, a lot of problems, a lot of miscommunication overall with the program itself. Some companies, unfortunately, have used the program in order to avoid higher Canadian wages.

I want to be clear that this is not the case in the entertainment software industry. These are highly skilled, highly valued people, and it costs the company a lot of money to bring somebody from halfway across the world to come work here. They would much, much rather be hiring Canadian talent born and bred, but there might not be that person here.

As I understand it, there are some other changes to the program coming that might actually lengthen the amount of time it takes to get somebody here, with more stringent requirements for how long somebody has worked for a company before they are eligible to come here.

Will that hurt EA, Jonathan?

[Jonathan Lutz]

Yes, absolutely it will.

I think you are referring to the ICT program. There are a few different things being discussed there, such as increasing the minimum years of work experience from one year to three years, asking us to pay 30% or more higher salaries to ICT workers, and then basically a clause that may say that companies employing too many foreign workers will forfeit their eligibility for the ICT program altogether.

All three of those are problematic for Electronic Arts. If we're unable to efficiently and quickly get the world's best and brightest people into these leadership positions that we need, it will seriously jeopardize our productivity.

FIFA, by way of example, is an absolutely massive project every year. To your point, we pump out a new version of that on multiple different platforms every year, and we can't miss a beat. Having to wait an extra week in some cases for that senior programmer or that senior producer can put the entire project at risk. The dates don't move because the soccer season doesn't move.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Lutz. That's all the time we have there.

We'll now go to Madam Bateman, for eight minutes.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

I want to thank my colleague for sharing the time. I really appreciate that.

Mr. Shariff, I want to go back to the comments that you made. I'm going to lay out a couple of questions I'd love you to speak to.

First, where we left off, you were talking about your one and a half year old, and your colleague Pierre Moisan had mentioned FarmVille. I'm reading a book called Citizenville, which draws parallels to FarmVille, albeit in the political world. He explains the difference between digital natives, which is your one and a half year old or my 22-year-old son, versus anybody who's over 30 who is a digital immigrant. I think that's a market opportunity for developing because we digital immigrants approach technology in a very different way.

I think educationally.... I remember my 22-year-old when he went away to university at 17, Grandpa bought him a nice new Mac. We'd never had a Mac in the house. He just sat down with it, played with it, and became quite an expert in no time. I would have had to get out the guide book. I think there is an opportunity there, which I'd love you to speak to.

You spoke about your project with the University of Winnipeg. I'm very interested in hearing about that because again, the CEO of GE was talking about the importance and the synergy that can grow from business working in partnership with universities. It's a win-win situation. It's a win for all of us. I should say it's a win-win-win because the economy benefits enormously too. He used Stanford as his ideal model that we're all striving for. Who knows what's involved.

There were comments about competing with big companies and winning. I think that's an important thing. I'd be very grateful for comments on that. You filled out some forms for the Government of Canada. I also want to hear if there are opportunities for improvement so that we can make it more economically centric and growth centric. I think in one of your comments you mentioned to tie it to the market.

[Khaled Shariff]

Tie it to the market, yes.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

We may be in a totally different universe than the market with what we're asking business people, due to our caution with taxpayers' money, which of course is always going to be there. Your comments would be so appreciated.

[Khaled Shariff]

I'll just say about that last one, tie it to the market; tie it, if possible, to venture capital.

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

Or results.

[Khaled Shariff]

I'll talk about digital natives first of all.

I'm a digital native. What does that mean? It means that when I went to the University of Winnipeg many years ago, 1994-95, and the University of Manitoba, and said I wanted to learn about this thing called the Internet, there were no programs to teach me HTML or Photoshop. I set up shop at the University of Manitoba in the television station and learned Photoshop and learned how to create HTML pages. My first occupation was for Manitoba Telecom from 1996 to 2000. I created all their Internet. I created the first CBC streaming media news. Soon after that I was hired in Toronto and did that from 2000 to 2004. Half a generation of a lifetime is doing that.

I was a digital native. It's like that today. I will hire people who are 22 years old, who are home-schooled, because they are really good. I did hire twins last year who were just very good at their programming language and understanding the art end of things and at being highly skilled IT labour. It's extremely important for the universities to keep up with that.

Fortunately, in 2006, I was able to study at the University of Winnipeg. Then after that, they had me teach there. I've been doing that on and off since then for eight years as I grew my company. We created a number of programs there. I contribute to the Internet systems specialist development program, which is a one-year development program that lets people get some accreditation for how amazingly clever and skilled they are, and then get out into the workforce. It's good for everybody. We also have a serious games certificate program at the University of Winnipeg that Project Whitecard created and it delivers all the courses. Specifically, serious games are another way that you address educational games—

[Joyce Bateman, Conservative, Winnipeg South Centre, MB]

How long is that program? I heard a young gentleman in my riding talking about it.

[Khaled Shariff]

I think you can do it over about a year and a half. If you did it full time, it would take you about a year to do, I believe. It includes about 10 courses. We hire people to deliver them. I don't have time anymore, but last year I delivered the introductory course.

This all ties into the question, what is an environment? This is nowhere close to where we want to be, which is to have your young people growing up in an environment and being exposed to business opportunities and feeling that they can go forth and start their own companies and do so earlier and earlier. You have, for example, native Californians doing that. I spoke about my three months at Plug and Play Tech Center in California. You also have people from all over the world going there, and they intersect. We all know stories of Apple and everyone else who comes out of that area of the world.

The model would be.... Fortunately, the Canada Media Fund has identified this. They created an accelerator pilot program this year, and I think only seven or eight companies were accepted into it. My company is one of them. I'll be able to work with Thompson Dorfman Sweatman in Winnipeg and LaunchPad in Winnipeg, a start-up sort of initiative, with my own lawyer as a mentor and along with access to venture capital to finally be exposed to saying, “Here's our business plan; what do we do; and let's see whether it works.”

What that means is simply now I can emphasize the take-to-market idea. Sure, we're going to create a product. We need to reach 10 million players—that's what we want to do—and we have nine months to launch the product. We're starting that program. This week we will write our take-to-market plan and will work very closely with mentorship, some of which we will import, from people who have a track record of putting that kind of success out on the App Store, where Apple takes its 30% and you get your 70%. I think there was a question about that earlier.

Or we have software on a system called Steam, for the Mac and PCs. Steam is one of the biggest software distribution of games in the world, if not the biggest. It's by a company called Valve.

We've had success. We did a kick-start campaign. We were successful with it. We have people in New York who promote us. That's what this would be.

But let's not put emphasis just on what the concept is. Let's put more emphasis on how to take it to market, and let's try to reduce.... Writing thousands of pages over the last three years was tough—it did, as I say, hone us—but I'm sure we can reduce the application process for the federal incentives we have, for which people compete desperately. I think this increases people's competitive edge.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Shariff.