Industry Committee on March 5th, 2014

[Julien Lavoie]

The foreign services do a lot to attract investments to Canada. I am less familiar with their activities, gaps and competencies when it comes to market access. It would be difficult for me to answer that question.

[Jayson Hilchie]

I can respond to that just a little.

Actually, we're going to San Francisco in a week and a half to the Game Developers Conference, and the Canadian trade commissioner service has a large presence there this year. I know this because we've been in contact with them on this. They're working to match Canadian companies with foreign companies, and they're also working to, I believe, promote Canada as an investment destination as well. I don't know the ins and outs of the meetings and the details, but I know from my past experience attending that particular show that there is quite a reasonable presence there from the trade commissioner service.

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

How much time do I have left, Mr. Chair? You're saying I have only 30 seconds left? I'll wait for the next round and let the witnesses answer questions.

[The Chair, Conservative, David Sweet]

Thank you, Mr. Côté.

Mr. Leef now has the floor for seven minutes.

[Ryan Leef, Conservative, Yukon, YT]

Merci. Thank you.

I'm subbing in on this committee, and interestingly enough, last fall I subbed in on the Canadian Heritage committee, and you were testifying at that one on the exact same thing. Lucky me, I can tell you that my son's pretty jealous. He was the last time. He's a 13-year-old kid and like all his buddies, he's highly involved in these games. He'd probably be better sitting in this chair asking you questions than I am. He'd have a million for you.

Ed Holder and I are just waiting for you to come up with probably your next best seller of our video game on question period.

[Voices]

Oh, oh.

[Ryan Leef, Conservative, Yukon, YT]

You'd have quite an interactive battle there. I think it would be a number one hit. Get some direct involvement in democracy in Canada. We could have people crossing the floor. I'd play it.

Anyway—I noticed on your map—it's great to see involvement right across the country, save for being right there in the three territories. But I'm just curious; if I missed it, what would you define as sort of the number one drawing card for establishment in each province? I suppose I get Quebec and Ontario kind of dominating a bit of that market, but you see Manitoba has 20 and Alberta has 20, and then Saskatchewan has one sandwiched in between there. Is there some variable that's more attractive in Manitoba, Alberta, and B.C. than Saskatchewan or just in terms of general selection right across the country that projects the growth of the business?

[Julien Lavoie]

I think it's helpful to look at some of the bigger clusters where most of the employment is, which is British Columbia, Ontario, and Quebec. In terms of British Columbia, it shares a time zone with California, which is very important for a lot of companies that have headquarters or other operations there. It's also closer to the Asian market and Asian companies as well. There are a lot of Asian companies set up in British Columbia.

Ontario is a bit of a newer player and has a tremendous number of indie companies, a few of the larger types of companies, but mostly it has a burgeoning indie scene. Quebec is the dominant player in terms of the large companies. A lot of the big players are there.

In terms of Alberta, in Edmonton there's one very large studio, but for the most part small and micro-sized companies are situated in some of the other provinces that you mentioned.

There are some tax credit programs across the country. Manitoba has one, Quebec, Ontario, and B.C., all have some manner of credit that does help attract some companies to that jurisdiction.

[Ryan Leef, Conservative, Yukon, YT]

There's some provincial influence on that.

[Julien Lavoie]

That's right.

[Ryan Leef, Conservative, Yukon, YT]

Sort of on a different vein here, I think it's impressive that you have the third largest video game development in the world, particularly when you look at the global players you're up against. It's neat.

Interestingly enough, one thing that I shared with my son after the testimony at the Canadian Heritage committee that he didn't seem to know, and he's immersed in this stuff to the point where I'm constantly trying to kick him out the door....

Is there a labelling or a marketing strategy? It's great for us here, and I think a lot of us go, “Wow, that's interesting”, but when you're so big and such a prominent player in the world, why does the average Canadian not really grasp that just yet?

[Julien Lavoie]

It is a global industry and when someone likes a video game they don't always know where it's made. That's obviously something we know is a problem. We feel that it could be a source of tremendous pride for Canadians to know that we are one of the dominant players in the video game industry.

Aside from maybe a few titles that are clearly identifiable as being made in Canada, these products are made for the global market anyway. So they're not uniquely Canadian in the sense that they don't necessarily feature beavers and Mounties that would make them recognizable as a Canadian game. These games are to be sold on a global market in the U.S., Europe, and other places.

It's the same thing for the smaller products. We do talk about the console games, but even on the smaller casual games on a mobile device the same thing is true. Those developers are hoping to not access just the Canadian market but the global market. It has an impact on the fact that the product's not looking Canadian so people don't always make that association.

[Ryan Leef, Conservative, Yukon, YT]

Would there be an advantage to having the Canadian product synonymous with quality and expertise, and then the government can play a role in branding? So globally, people know this is another Canadian game, another Canadian innovation, another Canadian product and we know Canadians are doing a really good job of this. Would that help, or is it just something you're not trying to stream down?

[Julien Lavoie]

Absolutely. The industry has partnered with other groups for the Canadian Videogame Awards and that's a uniquely Canadian video game award show that honours the best in Canadian video games. A lot of the other creative industries, whether it's music, movies, or film, all have award shows on a somewhat national basis in different languages. We felt it was important that video games also be recognized by Canadians...for Canadians to recognize and promote some of these products.

We'd love it if the federal government was more involved in the Canadian Videogame Awards as a concrete way to promote the innovation and the games that are made here.

[Ryan Leef, Conservative, Yukon, YT]

I sit on the natural resource committee and we talk a lot there about social licence of things on a totally different scale. Of course like a lot of parents they're concerned about the kids. The general perspective is that you're spending too much time on video games, get out there. You must deal with a bit of that. Is there a message that you have, or sort of that social licence that you're giving? What give-back activities are your companies involved with in the community to balance that responsible utilization of video games and the health and welfare of the youth in Canada?

[Julien Lavoie]

As an association we've been well involved with media literacy initiatives trying to educate people about media. We just completed, not launched yet, but very shortly we'll be launching some new videos on our website that help parents access some of the parental control features on the major video game consoles. Parents can sometimes feel a little bewildered with the technology so we have step-by-step instructions on how to access some of the parental controls on some of the video game consoles.

We advocate for parental involvement and parental responsibility. The parents really need to know what kinds of games their kids are playing, and help kids make decisions when purchasing games. The rating system is very important. On every box there's always a rating signed by the Entertainment Software Rating Board that helps parents know what kind of content will be played by the kids.

[The Chair, Conservative, David Sweet]

Thank you very much.

On to Mr. Masse now. I understand there's going to be some juggling so go right ahead, sir.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

Thanks for being here. We've come a long way from Pong, my original console. It's been a great adventure actually through Intellivision, Sega, and now a PlayStation that I have.

One of the things I'm a little bit worried about is that we are focusing a little bit on protecting the industry, but I'd like to go on the offence. So a city like mine that has access to Detroit and Chicago has a lifestyle element that the artists and the rest of the creators could enjoy. Also, we're located in a very low-cost jurisdiction. What advice would you give to me in terms of the top three things that we could change on the government side federally that would open up and maybe gain some market from the United States or somewhere else?

I'm from the auto industry and I'm tired of being cherry-picked all the time. So I'd like to go on the offence on this. What would these top three be?

[An hon. member]

He's a goalie on the offence.

[Jayson Hilchie]

I can give you a bit of a unique background on this, only because before I took this job I worked for a provincial government trying to do just that, which is build the video game industry. So I have some first-hand experience with starting from scratch, almost. It was in Nova Scotia. We had one video game company. There are now something close to 18 or 19 companies there.

I think in general you have to really look at the two things that I talked about earlier as to why in Canada this industry is as big of a success as it is. It comes back to producing the right people, having access to the right people, and then having a government that wants to put the right economic policies in place to create the environment that's necessary for the industry to grow.

Going back to some of the things that Julien said earlier about the threats that our industry faces, if you look in the U.S., there are something like 25 states in the U.S. that now have digital media or video game credits that help entice production to set up in that state. So those types of things are necessary because they are now commonplace and very competitive. Without them you don't get your foot in the door. Having a tax credit does not make you the number one jurisdiction, because there are a lot of other things that go into it.

Having universities—obviously you have a very good university there, and college programs and things like that. That's step number one, making sure you have the right people coming out of school. But then having government support, and a simple focus on wanting to do it—you have to really want to do it because there is so much competition out there. Again we go back to the fact that our industry has a demographic of 31 years old and $72,000 a year. It is a piece of economic development, I guess I could say, that governments look at as being very viable for themselves.

[Brian Masse, NDP, Windsor West, ON]

Thank you.

[Dan Harris, NDP, Scarborough Southwest, ON]

Following up on your earlier point about the transferability of skills, whether it be into aerospace, simulations, or high-end programming for database and other technologies, Mr. Leef was asking about excellence and about reputation. Maybe it perhaps hasn't gone through the general public, but certainly within the industry itself Canada is very well known as being a centre of excellence for development, so that's great. That's the first battle, because people have to want to come work here. It's great that the Videogame Awards try to actually break out of the mould and reward those Canadian achievements, certainly because there's another wall that has to be broken down in regard to people viewing a job in the video game industry as a career rather than something you do when you're young before you get your adult job, because it's absolutely not that. That's one thing.

We also have a gender barrier there in terms of the industry itself. There are still not enough women working in the industry. People are always constantly shocked about the percentage of female gamers. Of course you've done research on that, so what is the breakdown between male and female gamers?

[Julien Lavoie]

It's almost 50% now men and women, 54% to 46% at last count, but that was a few years ago. As the industry has changed and the product offering has changed and diversified, that has brought in not only a better gender mix but also quite a broader population set. We've seen tremendous growth in gamers over the age of 55 and other even younger players, almost toddlers, sometimes playing some very simple games on mobile devices as well. This is something that is fairly new.

[Dan Harris, NDP, Scarborough Southwest, ON]

To show us also the power of the tax credits and some of the competitive advantages—and I mentioned it Monday—there are even, in special effects, picketers at the Oscars picketing against the tax credits that Canada gives that attracts jobs here in film and TV and specifically special effects, which again is transferable into the video game industry. They certainly would like us to stop doing what we're doing because then we'll lose that competitive advantage.

Speaking about temporary foreign workers, how do we fix the problem at home, all these things. You mentioned that it's a mix. Some of that is, you've mentioned also, that there was a bit of a gap in the workforce that was created by the dot-com bubble bust. Part of the problem will resolve itself probably in the next five years just because the people working there now having five years more experience; some of it. But some of it will.... With the labour market opinions, four months doesn't seem like a long time, but if you're working at EA and you're working on the next NHL, to use the very Canadian example, you have a fixed date that the game has to be out by. If you lose a high-level person and you can't get somebody else in, it could derail the entire project.

You mentioned the games being made in other countries. When we sat in my office and we were meeting and talking with Electronic Arts, they were talking about how, of course, they have shops all across the world and within the company they are competing for the projects themselves. We heard that there's a lot of competition in New Zealand now because they've made changes to immigration and the folks at EA in New Zealand are trying to get EA to move development of games that are done here to there.

[The Chair, Conservative, David Sweet]

I'm sorry, you've exhausted your time.

Now on to Madam Gallant.