Video Game Trade War?

The governments of Canada and the United Kingdom are engaged in a increasingly heated dispute about the success of the Canadian video game industry. In particular the U.K. government has accused Canadian governments of unfairly subsidizing video game developers through tax credit programs.

These programs, which have been set up by various provincial governments including British Columbia, Quebec and Ontario, have been very successful in helping build the Canadian video game industry.

We can attest to the importance of these programs as we have several clients who have relied on a provincial tax credit programs to attract investors.

The success of the programs has now caught the attention of foreign governments who are alleging that the tax credits amount to an indirect subsidiary.

After a lengthy war of words the U.K. government has ratcheted up the dispute by making a formal complaint to the European Commission.

While the generally glacial pace of trade disputes suggest its unlikely that the various provincial programs are in any imminent danger, one wonders if eventually the current model of tax credits will have to eventually be overhauled or even replaced.

Coverage at Vancouver Sun and Game Politics