Industry Committee on March 3rd, 2014

[Jocelyn Benoit]

Let me give you a quick history of the Centre NAD. Five years ago, the Centre NAD offered only one-year, private training in 3D animation. People learned how to model a character, how to animate it, how to do the rigging, and so on. Since then, we have gone the university route with a three-year undergraduate program that includes courses in communications and management. We want to train multidisciplinary people, not just artists who are specialized in visual design.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Very good. Thank you.

Mr. Landry, of the five problems that you presented to our committee, I would like to speak about the fifth, the marketing of products.

I have been a member of Parliament for almost three years. It has been my pleasure and my honour to sit on the Standing Committee on International Trade. That was a very interesting experience. However, I was disappointed to see that Canada seems less and less competitive on the international scene, including in its efforts to penetrate markets. I am aware that the world is changing significantly and that, contrary to what we might believe, free trade no longer seems to be a priority in many countries. Our Canadian businesses are coming up against ever greater protectionist measures in a number of markets, including emerging markets.

Be that as it may, let us concentrate on what we are doing. You point to the Canadian Trade Commissioner Service as an avenue that can be used to sustain growth and to help with commercialization. However, today, that service faces the challenge of doing more with less. Is that a concern for you in terms of the services it offers?

[Serge Landry]

It is. Though products are less tangible these days, in the sense that we no longer sell products in boxes, we distribute everything digitally, the fact remains that we still have to find partners to help us with the visibility of those products in emerging markets. I have worked in sales all my life. The product you are selling matters little, you are selling it to people; you are selling something to somebody. So you need an intermediary to introduce you to that somebody, whether in Beijing, in Accra, Ghana, or in Stockholm. It takes people who know the local people, people who can open doors to those markets for you.

You do not get to understand the cultural market in China, for example, from a distance. Last October, I was in Beijing with Minister Lisée's economic mission. We have to see the business situation in countries like that for ourselves. We have to find out who the players are, who the operators and the product distributors are, who gets the best results, who we have to associate with to make sure that our products, our games, are successful in that market.

There is also the whole area of localizing one's products. Some games cannot be sold in foreign markets just as they are; they have to be tailored to a country's culture.

The trade commissioners can introduce us to the right people and can explain the major differences that will allow us to get into those markets.

[Raymond Côté, NDP, Beauport—Limoilou, QC]

Do you think there are markets that are being overlooked right now, that are not covered sufficiently? Off the top of my head, there is Africa, which is a very dynamic market. Of course, development in Africa is uneven, but, with significant growth rates, Africa provides attractive business opportunities.

[Serge Landry]

In our industry, Africa has a certain growth potential. The fact is that console users are few and far between, and mobile phones are just starting to be used in some countries.

Right now, Canadian companies should pay particular attention to Asian markets, such as Japan, Korea or China. Those countries have huge critical masses of users, and games can be incredibly successful if they break into those markets. Most companies are currently turned toward traditional markets such as England, the United States and Europe. I think we should review our way of producing and marketing our products to Asian markets.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Landry and Mr. Côté.

Welcome to the industry committee, Mr. Lizon. You have eight minutes.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

Thank you very much, Mr. Chair, and welcome to everybody here, and Mr. Benoit, via video conference.

I'm not a regular on the committee. I'm subbing for one of my colleagues. I would like to ask a question along the same lines regarding skill shortages that you experience as well.

Skill shortages is not something that you would face, but it's a problem for many businesses, especially skilled trades shortages. It's a very huge problem for our economy and businesses, especially in the construction industry with a shortage of welders, machinists, you name it.

I'm quite confused. It almost looks to me like it's a vicious circle or a catch-22 situation. You don't have the people you want because we don't train them. I don't truly understand what the real reason is because it's not really anything similar to skilled trades shortages where the mindset is if your kid won't go through university, it's a huge failure. It is what we have to eventually change.

In your field, you require high tech skills. Where is the real gap? On the part of the artist, there's an oversupply of artists in Canada. There's an oversupply of artists in general. I guess they would have to get some training to fit your specific needs, but there are lots of performing artists and visual artists, and for them to actually find employment, it's sometimes next to impossible. Therefore, where's the problem?

We're talking about scalping or poaching. Actually I was very surprised. I am optimistic, however, for the future because at one of the pre-budget consultation meetings, I heard from a Target rep that Target does not actually do poaching. They do something that is very civilized. It's talent acquisition, which I guess makes a huge change for everybody. It means the same thing, I guess.

Where is the gap? Where is the problem? We talk about a national strategy, but where are the universities? Where are the colleges? Why don't they react to market needs?

[Serge Landry]

I think they react, but you have to understand that the video game industry is evolving so fast. The tools that we use now to create the games didn't exist four years ago. By the time that universities and colleges get on board to follow the industry lead, and the emerging new platforms.... Even for the actors, the motion capture technology didn't exist four years ago.

We need to train the people we have to work with these new tools and technologies. That's why abroad, where these technologies sometimes were created, we have the know-how, we have the skills. That's why we need the skills from outside, those who know these new technologies, to teach the younger people here, and help them acquire these skills.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

On slide 14, issue number 2, regarding skilled worker shortage, you state in your presentation:

Barriers to immigration must come down. Foreign Skilled Workers are essential to the sustainability and growth of our industry. They not only provide necessary labour but are key to transferring skills and mentoring our more local talent.

You are talking about dynamics and about the fact that the industry is new. What are the other countries doing better than us to have the necessary skills that we don't? The industry is relatively new, and it's new for those countries. I don't know specifically what they are.

[Serge Landry]

It's newer for us. The origin of video games goes back to two major hubs that are ahead of Canada, namely California and Japan. A lot of these skilled workers come from these areas as well. Our industry is younger than theirs; that's for sure. We barely had an industry before 1997.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

What would you say would be essential to make sure that the army of young people who cannot find employment, and are not far from the fields that you're looking for, can gain the necessary skills to get employment and grow your industry?

[Serge Landry]

If I may, I think once more it's by having senior people mentoring the younger guys and being able to work on creative projects and innovations that are being built within the company, as we speak. That's what's going to make these younger guys able to teach and mentor other people in the future.

[Wladyslaw Lizon, Conservative, Mississauga East—Cooksville, ON]

I understand, but who is supposed to run it? Is it the companies, the colleges, a combination, or a collaboration of both? How do you see it being implemented?

[Deirdre Ayre]

I think it does need to be a collaboration.

To your earlier point, there are just too few seniors. It's not that we don't have people who are up to the standard that may be in the United States, or in the U.K., or what have you. We do. We just don't have the number for the fast pace that the industry is growing in Canada. We just need more.

Also, some of these issues are different, as I mentioned, in different regions and in different provinces, and it's the size of the companies. You're talking about some companies that have three and four employees, and you're talking about other companies that have 3,000 employees. We're not going to all have the same needs, although we all seem to agree there is a skills issue, and there needs to be more transfer of information in skills.

I think some of the points that Professor Benoit was making were excellent, and it goes to Serge's point too, of how quickly the industry is changing. We need to have ongoing training programs even for these highly skilled workers because things are changing so quickly. It's really not something we've really seen before. A lot of these issues are new and they're not things we've been able to plan for. Things are changing so quickly.

[The Chair, Conservative, David Sweet]

Your time is up.

Mr. Benoit, I did see that you're making some notes, so if we have time at the end we'll try to give everybody a couple of minutes to wrap up.

Ms. Borg, you have eight minutes.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Thank you very much.

I would like to thank all the witnesses for participating in our meeting today and for sharing their comments on this industry, which is very important for our economy.

My first question is for everyone. Is it important to implement a digital strategy to ensure the growth of your industry? If so, what should this strategy include in order to allow the video game and entertainment industry to develop?

It doesn't matter who goes first.

[Serge Landry]

We have been talking about this digital strategy for a long time in Canada. It is important to clearly establish what we want as a type of business, as a type of industry. To do so, we can match the needs of educators like Mr. Benoit with those expressed by major companies, like the Ubisoft of the world, and smaller companies, like my colleague Deirdre's company.

In developing such a strategy, we must consider all those needs. Yes, we must take time to analyze things, but we must also take action. Right now, action is long overdue.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

I completely agree. Thank you.

Does anyone else want to comment? Mr. Benoit, do you have something to add?

[Jocelyn Benoit]

It is essential that the new digital strategy supports the creation of Canadian intellectual property, but the rest of the industry must not be ignored. Foreign companies that come to Canada are important, but I think the future also depends on the support for small businesses that are starting out and that want to create something new that belongs to Canada. That depends on R&D and investment, among others.

Let me go back to what I said earlier. The risk must be spread between the industry and training institutions, including the various Canadian universities. That is what is being done in other more established fields, particularly in construction.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Thank you.

Ms. Stiles or Mr. Peacock, would you like to add anything?

[Simon Peacock]

For us, I think it comes down to a policy that will help establish stability within the industry to make sure that the games companies that we already have continue to thrive, and that the small companies can grow, and we can bring more industry into Canada. From an actor's point of view, that would be a blessing. We would have all these amazing companies making amazing games here, giving us amazing work, and really putting Canada on the map, as companies here already are doing. I think that's a continuation of what we'd like to see.

We also see other countries becoming increasingly aggressive. That also goes to the point of losing skilled labour. A lot of Canadian skilled workers on both sides of the industry get taken out of the country. I know that London, England has become a particularly aggressive player in the industry and is really coming after the most talented workers in the video game industry. I work with the companies all the time. I'm in studios all the time with people who work at those companies, so I have witnessed first-hand the turnover they have within the industry. The people who are here today are gone tomorrow.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Thank you very much.

My next question is more for Mr. Landry, but, if other witnesses also want to comment, please do so.

Tablets and more mobile games are converging. What are the resulting challenges for companies in this sector? What could the federal government do to help you meet those challenges?

[Serge Landry]

The challenges are considerable. As I said, the industry is evolving very quickly. Methods for monetizing products marketed right now are still being developed. We are still experimenting with those methods. In addition, we must keep the knowledge acquired in this field in Canada.

Earlier, we talked about talent in administration and upper management. It was said that the commercial aspect of the industry had to be more regulated. Unfortunately, boxes are no longer being sold today; virtual products are instead. How can we make our products more known? I have already suggested that a Canadian publishing agency be created to help businesses market their products.

In November 2011, we launched our game ourselves. That same day, 1,172 other new applications came on the market in the App Store. You can imagine how challenging it is for us to stand out from the mass.

[Charmaine Borg, NDP, Terrebonne—Blainville, QC]

Yes, absolutely.

Mr. Benoit does not seem to want to comment. I will therefore proceed with my next question, which is mostly for Ms. Stiles and Mr. Peacock.

How can we encourage Canadian content on the web, whether it be the content of the video game industry or yours, more broadly based?

[Marit Stiles]

If we're going to talk more broadly for a moment, one of the things we've been looking for is that the CRTC get interested and involved in over-the-top broadcast. Right now we have no way to ensure that a percentage of the revenues generated by the kind of online content that is broadcast by these over-the-top providers goes back into Canadian content production, in the same way that the CRTC regulates television broadcasts. That's something we're going to be talking about with them in their current Let's Talk TV review.