Industry Committee on March 5th, 2014

[Geoff Regan, Liberal, Halifax West, NS]

In view of the number of people who are graduating from community colleges and universities with some of the skills sets you need but with not as much experience as you need, what's your sense of how many people we are short of in terms of experienced workers in Canada each year?

[Jayson Hilchie]

Do you mean in our industry?

[Geoff Regan, Liberal, Halifax West, NS]

Yes. How many is it right now?

[Jayson Hilchie]

I would say it is probably close to 5% of the total workforce. We did have statistics in our study about the number of open jobs. I think it was something like 1,200 open positions in the next 24 months.

[Geoff Regan, Liberal, Halifax West, NS]

We have 65 institutes in Canada producing people who are skilled workers for your industry, so what proportion of that 1,200 are people you can't get in Canada because you need people with experience?

[Jayson Hilchie]

It is a small number. It is not a large number. Most of the employees we hire in our industry do come from Canada. It's in our best interests to do that.

[Geoff Regan, Liberal, Halifax West, NS]

You wouldn't need to bring in more than a couple hundred probably if you had—

[Jayson Hilchie]

It could be more than that across the country. Like I say, 5% seems to be a number that's being kicked around.

Again, to go back to your example of the kids graduating from college, they aren't the problem. Graduating students from university is great, but without the senior people to train them and to lead the teams and lead the games, oftentimes the demand for those people becomes less than it would be if we had a full complement of people at the senior levels.

[Geoff Regan, Liberal, Halifax West, NS]

That's the point. There aren't enough of those people in Canada. Is that what you're saying?

[Jayson Hilchie]

That's right.

[Geoff Regan, Liberal, Halifax West, NS]

Let me turn to something else. What's the potential impact of advertising, do you think, on mobile gaming? For example, there's been news recently that the Flappy Bird game has had very good success in terms of its revenues. Where do you see that going?

[Julien Lavoie]

Flappy Bird is really an exception to the rule in terms of a popular game that goes viral.

A number of different business models are being tested or used in the video game industry on the mobile side to try to monetize the creations. Advertising is just one of the ways that the companies are finding to recoup their investment. There are many others. In-app purchases is another one. Charging for the game up front is another one. Subscription models are also heavily used in the video game industry. There are many different models, and advertising is just one of those models.

[Geoff Regan, Liberal, Halifax West, NS]

I think you talked about marketing being one of the challenges you face. If that's the case, what mediums or programs can you imagine that industry and government can cooperate on that might assist in this regard?

[Julien Lavoie]

The Canada Media Fund has an experimental stream that video game companies can access. However, I think you heard from other witnesses that the program is highly subscribed to and does not fund everyone who applies, nor should it, probably. Even increasing the number of eligible projects in that program would help smaller companies for sure with some of their marketing or development costs.

[Geoff Regan, Liberal, Halifax West, NS]

As you look ahead to what you see as the evolution of the video entertainment industry over the next decade, what do you see happening? As you look at it, what do you think is needed for Canada to maintain its competitive advantage?

[Julien Lavoie]

Ten years is a long window in the video game industry. Things change very quickly, so it's hard to really know where things are going. However, I think it's safe to say that we're going to see more integration between various forms of media for video games. You'll be able to play a game on a mobile device or maybe on a console and continue it on your PC. Also, these game experiences are going to be even more immersive than they already are. That's perhaps a glimpse into the future.

In terms of maintaining Canada's competitive edge, the provincial tax credit programs are quite critical to our competitiveness nationally, and then on the federal side, keeping programs like the SR and ED tax credit program keeps Canada competitive as well. It keeps us on the map as a good place to make video games. Combined with educational institutions continuing to train the right kind of people, that's really what's going to keep us at the forefront of this industry.

[The Chair, Conservative, David Sweet]

Thank you very much, Mr. Lavoie and Mr. Regan.

Now we'll move on to Mr. Holder for seven minutes.

[Ed Holder, Conservative, London West, ON]

Thank you, Chair.

I'd like to thank our guests for being here today and sharing their thoughts.

As I read your book, which I found very interesting, it almost seems that we should have had you first, because I think that if you're the godfather of all the organizations—

[Voices]

Oh, oh!

[Ed Holder, Conservative, London West, ON]

I'm not sure if that's exactly appropriate.

According to the booklet, you've indicated that there are 329 companies that are gaming industry-type companies in Canada. Are they all members of ESAC?

[Jayson Hilchie]

No.

[Ed Holder, Conservative, London West, ON]

How many would be members of ESAC?

[Jayson Hilchie]

We have close to 20 members.

[Ed Holder, Conservative, London West, ON]

Because I noted that you had some on the back....

[Jayson Hilchie]

Yes. We represent a lot of the major companies, but we also represent a number of some of the smaller companies as well, and we're constantly diversifying our membership.