Thank you, Don.
Good afternoon, everyone.
Don has identified some of the things we know about the IDM sector in Ontario. I'd like to touch briefly on a number of things that we still don't know about IDM in Ontario. Surprisingly, one of these things is the precise size and scope of the interactive digital media sector in Ontario and in Canada.
Over the past year, IO has been active in research into the industry, including through our involvement in the latest Canadian Interactive Alliance industry profile and also a research project that's being funded by the Ontario government. That will provide a more detailed mapping of the companies in Ontario, identifying their size and scope of their activity and information about revenues, use of government support, and other factors.
A second thing that we don't know is precisely how synergies work between subsectors within the interactive digital media industry and between the IDM industry and traditional media. We know they do. There are many examples of books being turned into digital media games, and of course many examples of film and TV projects having interactive digital media components. What we don't know is precisely how they can be encouraged, or indeed whether they need to be encouraged.
The third thing we really still do not know is precisely the best way for government to provide early-stage support, whether this relates to the start-up of a company or development of innovative, new interactive digital media content. We do know that financing is identified as the most significant issue for the sector. Our colleagues at the Canadian Interactive Alliance have done some research on this. Some of the earlier witnesses have referred to the importance of provincial tax credits, and we certainly agree with that. We understand that our colleagues at the Entertainment Software Association of Canada have been advocating for the creation of a federal IDM tax credit that would work in concert with the existing provincial credits. Of course we fully support that suggestion.
The Canada Media Fund has also been referred to, and we absolutely agree that this is a very important source of funding for the IDM sector. As well, for start-ups, both Ontario and the federal government have launched VC funding programs. We haven't seen analyses of the returns on these investments, but we feel that VC matching funds might be a better approach than the government trying to pick winners. As well, it's important to note that VC funding is not for everyone. Most young entrepreneurs get their first funding from their own resources and friends and family. However, tax measures in support of this kind of early-stage funding might also be worth considering.
Finally, we don't know what gaps, if any, exist in the case of projects that push both technological and artistic boundaries. We do know that in such cases companies tap into R and D support like the SR and ED program, as other witnesses have mentioned, and also content support, like Ontario's digital media tax credit. Is this just a wonderful confluence of things working ideally together, or do these supports not fully provide a basis for the necessary components of the projects? We just don’t know enough about this yet.
Finally, I'd like to say that whatever we do, we need to be nimble in the government support for the IDM sector. We need to be prepared to experiment, to examine, and to make refinements. In our view there's no shame in not getting it exactly right the first time. If we want leading-edge interactive digital media companies in Canada, our public policy frameworks need to be leading edge as well.
Thank you for your time. We look forward to your questions.