Industry Committee on March 3rd, 2014

[Simon Peacock]

From the performers' perspective, it's very important that this work stay here. Many other forms of media have dropped off significantly, and the employment rates of Canadian performers in film and television have suffered greatly over the years. Video games to a large extent have picked up that slack for a lot of performers.

It's almost like a safety net for Canadian culture in many ways. If you value the arts, such as the theatre, video games now are largely subsidizing that. I can tell you that most of the actors who I work with also do theatre, but it doesn't pay the rent very well anymore, unfortunately. Video games do that in a fantastic way, and in a way that continues to grow, but for us, our jobs are very easily taken offshore by video game companies at the moment.

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

How do you keep it growing? You're saying how crucial it is to grow. Specifically how?

[Simon Peacock]

For us, it's about educating our members, getting the skill set up so that we have a much larger talent pool that these companies can draw from. It is easier for them if they can work with a local talent pool. If they don't have to go offshore to do it, it's much easier. They're already in the same place. They can come to the studios, they can attend all the sessions, they're there all the time. They're right there in the presence of the actors. That's always preferable to them. Also, as far as pricing is concerned, we're very competitive. For example, I work in London and Los Angeles in the same industry. The prices there for talent are significantly higher.

I think it's just a matter of awareness within the industry of the fact that we are doing these programs within the industry, that we are creating more talent here, talent that has the experience to be able to go on to a set for a video game and deliver the goods straightaway and be the rival of any other nation on earth in that regard.

[Marit Stiles]

Like the film and television industry, it's an international industry. We have to be globally competitive, which is why I think we're all talking about tax credits, tax incentives.

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

How does a tax incentive make you globally—

[Marit Stiles]

Because other jurisdictions offer similar incentives. Like the film and television industry, which we're very familiar with because many of our members also are employed in the film and television industry largely, having those incentives in place makes us competitive with every other jurisdiction in the world that is competing with us in the same—

[The Chair, Conservative, David Sweet]

Thank you very much. That's all the time we have.

Now on to Mr. Harris, for eight minutes.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you to everyone for being here.

That last remark actually provides a perfect segue into the start of my remarks. There were members of the American industry in not just video games but in animation who were picketing the Oscars last night because of the tax credits and assistance we provide to help foster our industry and maintain those competitive advantages that we have here at home.

If we want to continue to build and grow this industry, we can't take the foot off the gas. The minute you take the foot off the gas, somebody else will come up behind and overtake you. The rest of the world is looking at Canada's model and what we've done to create a successful video game industry. One of those big competitive advantages we've had has been that local talent pool, so continuing to foster that local talent pool is going to be important for years to come to continue to grow the industry.

I think what was being said from both sides was actually two parts of the same problem. We heard last week from Jason Della Rocca, who works with start-ups and small companies, and from Ubisoft about how the big and small companies actually have very different needs for what will help to make them successful. The large companies are facing a problem where there isn't enough of that upper-end talent that's local, so they need to bring people over. Then you're saying you need to have that talent come over, show the local people how to do it, and then they get to be trained so that they can then take over those jobs.

Of course, having all of these large foreign companies that have come to Canada and set up shop here, like EA and Ubisoft, helps to develop that talent pool so that we can keep growing. Then we'll have more entrepreneurs and more start-ups and more small companies. If we provide the right supports for them, they'll grow and employ more Canadians and employ more local talent. Then we will actually have the local talent pool so that the big companies have enough people to draw from as well, because we heard them say at the committee that they would much rather hire the local talent, because it costs a lot of money to bring somebody from overseas. You bring them over; you have to pay for their travel and you have to pay them a premium for uprooting them. It's actually much cheaper to hire the local Canadian talent.

We know that it's providing $3.2 billion to Canada's GDP in an industry where there's lots of room to grow. When you're talking with small companies, a sound stage would be like the one that I worked on one time. It had a microphone with open sleeping bags surrounding it, and we had to use a flashlight to read our lines. Then there's the 3-D motion capture studio at Ubisoft that's being run by a former member from Industrial Light & Magic where the actors are in that room wearing all these sensors. They can't see anything. They have to imagine the scene in front of them. The director is sitting there with the camera on them and the director can actually see the scenery and everything behind them. It is a very specialized talent, and some assistance is going to be required to actually develop that talent pool. I'm happy to see that ACTRA and the industry are working together to further develop that talent pool.

There was $2 million in salaries paid last year. That's a good amount. Those are good family-supporting jobs for the most part, but there's still a fair amount of contract work and you have to go from job to job.

What would be the single thing that would help the actors most to maintain and sustain themselves in these careers so that they can continue to work and to receive the training to get better at those jobs so that they can actually continue to grow and get pay raises and an improved standard of living?

[Simon Peacock]

The ultimate for that would be to have more games companies coming to Canada. The more games that are being produced here, the more work there will be for actors. The more of those small independent start-up companies that are doing well and succeeding and using unionized labour, the better it is for us.

At the moment, for most actors video games provide sort of a supplementary income. Very few actors in Canada, unfortunately, are able to make a living doing just one particular form of performance. We generally tend to wear a lot of different hats. We do film, television, radio, commercials, video games, theatre. We do whatever we need to do to pay the bills, but as I say, video games are becoming a far more significant part of that equation for many of our members.

[Dan Harris, NDP, Scarborough Southwest, ON]

For the members in the performance art, because that's what this is, would being able to spread their income tax burden over multiple years help actors maintain and continue to apply their trade?

[Marit Stiles]

Yes, absolutely. Most of our members, as Simon was indicating, have a kind of lumpy income. There are good years and there are very poor years. I'm sure many of you have met performers, very big stars who will surprise you by telling you that they can have very lean years when they have virtually no income, and then one decent year. Maybe they'll bring in $40,000 or something and have a good year, and then there may be another bad year. They're not taxed accordingly. They're taxed as if every year was that great year.

We are very much advocating for income averaging for self-employed artists. Again, as you were saying, these jobs that you were talking about, when you're working on a video game, these are not salaried jobs. These are independently self-employed contract jobs.

[Dan Harris, NDP, Scarborough Southwest, ON]

Great.

Mr. Landry, you were talking earlier and I'm sorry I won't be able to ask you this question because I have other things I want to capture. Hopefully somebody else will let you talk more about it.

You spoke about the case of Finland and Supercell. We heard extensively from Jason Della Rocca last week about that and the success there.

You also mentioned equity crowd source funding. Crowd sourcing is something that small start-ups are increasingly making use of through, for instance, kick-starter campaigns, or in some cases where a campaign started that way and got much larger.

Chris Roberts, who helped to develop the Wing Commander games, started his own company with a kick-starter campaign and it grew beyond there, and now, as of this moment, Roberts Space Industries, is developing a new game. This is a brand new company without any previous development. They have crowd sourced $39,652,743 from 401,594 distinct individuals.

I'm hoping perhaps someone else will be able to ask you to expand upon that, or you could provide more information for the committee down the road, because to help start-ups to grow, that's one of those important sources of revenue, beyond tax credits, beyond direct grants and funding from government, because unfortunately we have a limited pool.

Mr. Peacock, you were talking about some of the potential bumps in the road. These are things that could upset Canada's current competitive advantage because there are other countries that are waiting to take the business, to take the talent, away from us. Could you go more extensively into what we need to do to smooth those bumps in the road?

[Simon Peacock]

It is primarily, as we said, education of our own members, of getting them all up to the level where they can all walk into a sound studio tomorrow and deliver the goods straightaway in a very quick and efficient way. Other countries have programs where they are training their own actors. We also have to fight against the celebrity status that other nations have with their performers that we haven't yet attained in Canada, but I can say that is changing thanks to video games.

A couple of examples would be someone like Elias Toufexis, who was in Deus Ex, or Michael Mando from Far Cry 3. Anyone in the gaming world anywhere on the planet knows who those two actors are. So it's finally Canada getting a star system without those actors having to leave the country, unlike the Jim Carreys or the Mike Myers who have to go south of the border to make their names.

[Dan Harris, NDP, Scarborough Southwest, ON]

Thank you very much.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Peacock.

Colleagues, I just want to make sure we remember Professor Benoit. I know that the folks with us here are always easier to spot, but we do have somebody here by teleconference so just—

[Dan Harris, NDP, Scarborough Southwest, ON]

If you had given me two more minutes, I would have gotten to him.

[The Chair, Conservative, David Sweet]

I'm certain that you would have, Mr. Harris.

[Dan Harris, NDP, Scarborough Southwest, ON]

I'm willing to sit down there if we take an extra meeting.

[The Chair, Conservative, David Sweet]

On to another unique questioner, Mr. Holder, for eight minutes....

[Ed Holder, Conservative, London West, ON]

I'd like to thank our guests, both on video and in live production here, in representing the various aspects of your industry.

I find it really fascinating. I heard Ms. Stiles and Mr. Peacock mention that Canadian actors have some $2 million in earnings in video-related acting. Ms. Stiles, you mentioned Gravity. I think Sandra Bullock made $20 million herself for that movie. I just find it kind of a bizarre connect.

Mr. Benoit, perhaps I could start with you. You seem lonely over there, so if you don't mind, I'd like to ask you a couple of questions.

By the way, I think you were the only one of all our guests who actually paid some compliments to the Government of Canada in some meaningful way. I only say it from the standpoint that it's always easy, I find, in these kinds of representations to say, “Here's what we want. Here's what we need”. Ears get bigger and more open if you first say, “Well done.” It's just a thought. If I went to an actor and said, “Bravo”, they'd probably be a little more receptive when I asked them for a coffee or something. I'm just saying something like that.

Mr. Benoit, you talked about 3-D animation. That was one of the first comments you made. I was struck when ACTRA was here in terms of their role, and I found that very interesting.

Where does 3-D fit into all of this? I'm trying to get a sense from you. Is that the big lead in digital gaming? Could you help me understand the role of 3-D in the industry?

[Jocelyn Benoit]

Yes. As has already been mentioned, video games are very multidisciplinary. There are four main aspects: the concept, the programming, the design, which includes the look of the game and the design of the levels, and the visuals. Let's not forget the sound and the music either.

3D animation provides a particular gaming environment that stirs up emotions. For some, it is secondary. So we design video games that are interesting to play. Increasingly, however, the players, the users, want an interesting visual experience, meaning that animation has a more and more significant place in different video games.

[Ed Holder, Conservative, London West, ON]

You also made some reference to the importance of training programs to transfer those skills into other areas. You mentioned the importance of graduate and masters programs, which quite frankly I hadn't thought a lot about until I realized....

First, you need to understand I come from London, Ontario, Canada, the 10th largest city in Canada, if you didn't know. I share that with you because we have a very strong digital gaming focus as one of our areas of attention in London. Just next door in Waterloo and tied into Stratford, I understand there's some really strong emphasis on digital gaming, and it's tying into what we're doing at Western University.

Is that the focus of R and D, and the focus on programs at the university, and perhaps I would say at the college level, that you were referring to?

How can we do that better, if that's not the right example?

[Jocelyn Benoit]

I mentioned two kinds of training. First, there is university education in the classic sense. These are mostly young students who want to learn a new occupation, and we should encourage that. Almost half the courses are taught by professors and the other half by instructors. At our school, we feel lucky that we have access to the pool of resources in Montreal, which is bursting at the seams with talent and with people who are ready to teach. Then there is the contribution from the industry. That is very important, because it rounds out the students’ education both in skills and knowledge, as well as in networking and contacts.

Companies have to be encouraged to lend out their human resources. I know that it may seem complicated to free up a top animator or game designer to go and teach one afternoon a week for 15 weeks. But, at the end of the day, the industry wins when our students are better trained. Experts from other countries have been brought in to teach our apprentices. We could ask local experts to come and teach them in the same way. That is the first aspect.

There is something else that needs to be done. A number of really good software engineers are working in different areas like aeronautics, aerospace and medicine. In some cases, employment is dropping and the resources remain local. However, the skills those engineers have are not quite the same as those needed in the video game industry. So we need to provide professional training in order to redirect their knowledge of the field, like transferring skills gained in aeronautics to video games, for example.

[Ed Holder, Conservative, London West, ON]

Thank you.

Ms. Ayre, I heard you say that one of the challenges we have with foreign workers in Canada is the ability to retain them, particularly, I think I heard, because they get lost to some of the larger centres. Then I heard the nice folks from ACTRA say that what we need is a larger pool of talent with focus on Canadians.

How do we square that circle? Ms. Stiles, do you have a thought on that? Am I confused on this?

[Marit Stiles]

I think there is a difference in terms of what we're referring to.