canada digital media final 2009

1. Overview of
Digital Media
in Canada
Aslin Unlusoy
Trade Commissioner
Canadian Embassy in Dublin
April 30, 2009

2. Agenda
Who we are
Understanding Canada
Canadian ICT
Canadian Digital Media
Video Gaming
Computer Animation & Digital Effects
Education and Training Products
Business Applications & Web Marketing
Enabling Technologies
Wrap up

3. Canada’s most comprehensive network of intl trade professionals
270 diplomatic and consular offices in 180 countries
Sector specific, in line with local strengths
Access to an extensive network
We are your first points of contact

4. Oh Canada!
Second largest country in the world; polite neighbour in the North
17 of 20 largest cities are within a 90 min drive to the US border.
10 provinces, 3 territories; federal and provincial rules / programs
Strong ties and shared like-mindedness
with the Irish (incl 13% of our population!)

5. Oh Canada!
Great access to the US through NAFTA; + 443 million consumers!
Two Canadian banks rank among only seven banks worldwide that still
carry a Moody’s triple-A credit rating.
Canada rated as the #1 place to do business in the G7 for the next 5
years (Economic Intelligence Unit )
Canada has the lowest business tax
rates and payroll taxes among the G7.

6. Positive Business Climate
Canada understands the importance of its business community and has created
an environment to encourage its success.
Canada’ business climate ranked first in the G-7; fourth out of 82 countries
Economist Intelligence Unit’s global business rankings for the forecast period (2009-2013)
Canada ranks well for its infrastructure, market opportunities, taxes, and
foreign trade and exchange controls.
Business Environment of Top Ten Countries, Forecast 2009-2013
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7. Best Educated Workforce
The overall skill level of Canada’s workforce ranks high among
competing countries.
Canada has the highest percentage of individuals achieving at least
college or university education, among OECD member countries.
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Higher Education Achievement
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Source: IMD, World Competitiveness Yearbook 2008

8. Canadian ICT
Canada ranks 9th in the world for ICT competitiveness
32k companies, 600k employees; 43% w a university degree
79% companies are in software and computer services
Average annual growth of 5% since 2002
92 universities produce 50k math, comp science & engineering grads
ICT is Canada’s largest private investor in R&D: $5.7 billion annually
Canada is 3rd largest for digital entertainment (Vancouver, Montreal)
The Greater Toronto Area IT cluster is the 3rd largest in N America
after San Francisco and Boston; several IT clusters across Canada.
Three main ICT sub-sectors are: Wireless, Software, Digital Media

9. Canadian Wireless & Software
Wireless: Cellular Equipment, Mobile Devices & Customer Premises
Equipment, WIMAX and Software Defined Radio Solutions
In the top 10% for global broadband penetration rates
Canada ranks #2 among the G7 for patent and copyright protection
RIM, Nortel, Redknee, Belair, Sierra, Wavesat and Intrinsyc
Software: Enterprise Application Software, Web solutions, E-security
and Green IT
One of the highest levels of broadband penetration and high speed
Very low overall communications costs
Mature, technologically advanced telecomms infrastructure
Corel, Constellation, Enghouse, Open Text, Platform Computing

10. Canadian Digital Media
Canada is reputed for its expertise in digital media and has a
remarkably successful track record.
Strengths of Canada’s Digital Media firms include:
Animation and special effects
Video and computer games
Education and training products
Business applications and web marketing
Enabling Technologies in the
Transmission of Digital Content

11. Digital Media – Quick Facts
Over 3,200 companies employing more than 52,000 people
Growth rate is 5.9% CAGR compared to the US at 5.6%
60 post secondary institutions provide digital media programs
Major international companies have chosen Canada for their operations:
Electronic Arts, Bioware, Disney, Ubisoft, THQ, Microsoft and Vivendi
Over 60% firms export; firms with revenues over $10M export at 98%
71% firms are engaged primarily in content creation; remainder, enablers
11 research labs in 3D imaging
Very competitive tax incentives at the provincial level

12. Canadian Programs Summary
There are many Programs and Policies (Federal, Provincial, and Technical) that
provide support and funding for New Media:
Ontario and Manitoba both emphasize interactivity in the products it
supports. Although funding levels are not as high in Manitoba, the
province does offer marketing support.
Quebec has succeeded and continues to attract large gaming content
developers (eg. Ubisoft).
British Columbia overall casts a wide net and supports investment in new
media ventures, versus the development of a particular product.
Technical funds provide significant support for those that qualify (specific
R&D definition); focus on technically challenging business segments like
gaming and mobile content.
Note: All programs are listed and detailed in the Appendix.

13. Video Gaming Industry
Canada is ranked third in the world in video games, after the US and Japan.
20% of the top selling games in N America developed in Canadian studios.
Sales hit record levels in 2008, +$2 billion; a 23% increase over 2007.
Canadian gaming companies are positioned across the value chain:
hardware, infrastructure and services, enablers and tools, developers and
publishers, and game-ware innovation.
The video-gaming software sector alone comprises of 247 companies w
14,000 employees. 10% of Canada’s software jobs are in this industry.
Thanks to generous tax incentives, Canada has the world’s two largest
video-game development centres: Ubisoft (QC) and Electronic Arts (BC).

14. Video Gaming Industry
The Quebec games subsidy means studios can claim back up to 37.5%
of their creative staff’s salaries; also a possible 40% tax credit for R&D.
Canadian advantage: cheaper to run a company, lower cost of living
The studios pursue close ties with education to ensure strong talent.
Cryptologic, leader in Internet casino and branded gaming software
Demonware, gamers can play ea other over the internet, Dublin & Vcr
Groove Media launched SkillGround in Dublin; free games download
Bioware, computer and console video games
GameLoft, huge catalogue of games for download to mobile phones
Next Level Games, Mario Strikers Charges for the Wii

15. Video Gaming Clusters
Canada’s video gaming industry has an emerging cluster that is targeting
the non-console markets and showing strengths in ‘middle-market games’:
Mobile Content
Serious Gaming. Canada has all the assets to become the 3rd ranked
global producer targeting the US and UK markets.
Business applications and web marketing.
Casual Games: There are 24+ companies employing 400 people.
Revenue models: trial-to-purchase, subscriptions, advertising supported,
in-game advertising, advergames, micro-transactions, skill-based games
through tournaments, retail sales, or single-purchase via downloading.
Canadian mobile content developers and publishers are also taking
advantage of wireless handsets to provide entertainment on the go:
egs. IUBO Mobile Entertainment, Blister Entertainment, Magmic Games

16. Computer Animation and Digital Effects
For years, almost every film nominated for an Academy Award in special
effects was produced with Canadian-developed technology.
Films: Batman Returns, Shrek the Third, King Kong, The Lord of the Rings
trilogy, the Harry Potter series, and the Chronicles of Narnia.
Side Effects Software, two-time Oscar winner and Toon Boom Animation,
Emmy Engineering Award winner for its animation software.
Major studios such as Rainmaker and Mr.X are clustered in Vancouver,
Toronto, and Montreal; also FatKat (NB) and Mercury Filmworks (ON)
Canada is also home to development facilities for the likes of Softimage
(Avid), Side Effects Software and Autodesk.

17. Computer Animation and Digital Effects
This industry is comprised of companies that produce content and/or
provide other services for film and tv markets in Canada & internationally.
Their primary customer base includes film studios, distributors, content
producers and television broadcasters.
The primary source of service work remains in the United States, followed
by Europe and Canada; new Canadian players are emerging
Canadian animation companies are focussing on international co-ventures
and co-productions, particularly in television, feature films, advertising,
mobile and gaming.

18. Co-production Agreements
Contribute to the further expansion of the film and video production
industries for both countries as well as to the development of their
cultural and economic exchanges.
In 2008, Section 481 set up to improve Ireland’s competitive position as
a location for International film and television production.
Co-production agreement on “Film and Video Relations Between the
Government of Canada and the Government of Ireland”:
http://www.irishfilmboard.ie/financing/Canada/11
Funding benefits for producers in Canada:
http://www.pch.gc.ca/pgm/ai-ia/ppp-ppp/coprod/ap_bp-eng.cfm

19. Education and Training Products
Canadian multimedia is setting new standards in courseware design,
edutainment, consulting and flight simulation.
For business, Canada provides instructional solutions for the
transportation, communications and manufacturing sectors.
CAE is a world-leading manufacturer of full-flight simulators for all
major aircraft types.
Kutoka Interactive develops award-winning interactive educational
materials for children; products in 40 countries, 123 languages.
The NECTAR Foundation develops state-of-the-art curriculum-based
multimedia software for math, languages and science education.
VitesseLearning is the largest independent business in the North
American customized learning marketplace.

20. Canadian Education
Canada’s professional schools and educational institutions offer more
than 100 new media programs.
The Art Institute of Vancouver, with its centre for Digital Imaging and
Sound, is a multi-million dollar facility that trains more than 1300 students
a year. Its graduates are employed worldwide.
The Great Northern Way Campus in BC is embarking on the development
of a professional master’s program in Digital Media.
Sheridan College in ON is the third-largest classical and computer
animation school in the world. Hollywood studios like Industrial Light +
Magic, Pixar Animation and Disney all regularly send talent scouts (and
endowments) to Sheridan.
The National Animation and Design Centre in Montreal enjoys an
enviable international reputation in digital animation and effects training.

21. Business Applications & Web Marketing
Canadian companies have shown how to use multimedia to design and
deliver superior interactive experiences for business applications and web
marketing.
The Autodesk (formerly Alias) AliasStudio line manages workflow from
concept sketch through to engineering. It is used by BMW,
Designworks USA, Nokia and General Motors.
Blast Radius designs Internet customer experiences for leading global
brands such as Nike, Nintendo, BMW, Heineken and Sony.
Eccentricarts specializes in web strategy, design and development.
Its state-of-the-art webware includes FlashMX and ColdfusionMX.

22. Enabling Technologies
Enabler firms are defined in the sector as suppliers of software
development and design, video and audio compression technologies,
internet applications such as graphic rendering programs, audio-visual
content management systems, and interactive broadcasting.
Canada has pioneered achievements in telecommunications and R&D in
audio-visual transmission technologies.
Corporate R&D investments: Multimedia Broadcasting, Interactive TV,
Digital Radio, Satellite Transmission, Internet TV, IPTV and 3D TV.
The Communications Research Centre Canada is collaborating with
international partners (application developers, users, device integrators
and chip set makers) in new projects such as interactivity with 3D TV and
Immersive TV over wireless networks.

23. Enabling Technologies
A significant number of Canadian companies supply leading-edge technologies in the
vastly growing digital and mobile broadcast markets.
Miranda Technologies (300+ employees) and one of its spinoffs, Agolith,
both based in Montreal are R&D nodes of video processing solutions.
Bluestreak Technologies’ awarded-winning MachBlue ™ powers
sophisticated applications and user interfaces on mobile phones and
televisions set-top boxes.
International Datacasting is recognized for their transmission technologies
of 3D video/films to exhibitions/cinemas on high-speed broadband
connectivity via satellite and have their hardware and software installed in
over 100 countries.
Common business models are selling products and services at trade
event through certified distributors, or directly to decision-makers.

24. Upcoming Events
Game Developers Conference, May 12-13
The GDC covers industry-leading methodologies in game design,
production, programming, visual arts and writing for big-budget
multiplatform games: http://www.gdc-canada.com.
Vancouver International Partnering Forum, May 12-13
VIPF offers businesses and industry hopefuls the opportunity to meet
industry veterans, decision-makers and cutting edge creators through
networking sessions & hand selected B2B meetings: http://2009.vipf.ca.
Ottawa International Animation Festival, October 14-18
This festival is the largest of its kind in North America, attracting film
buffs, art lovers, filmmakers, and cartoon fans from around the world to
the nation's capital. The 6th annual Television Animation Conference will
take place the first two days: http://ottawa.awn.com/index.php.
Montreal International Game Summit, November 16-17
This summit smashed several records last year with more than 100
speakers and 1,500 participants: http://www.sijm.ca/2009/en.

25. What We Can Do For You
The Canadian Embassy in Ireland has direct access to investment
and partnership contacts at national, provincial and municipal
levels within Canada, and is well positioned to assist in attracting and
expanding your investment, and/or help locate partnership opportunities.
Doing Business with Canada
(Info on selling to Canada, buying Canadian, business travel, etc)
www.canadainternational.gc.ca
Invest in Canada
(results of KPMG studies, CEO’s Guide to International Business
Costs, breakdown of key industry sectors, etc)
www.investincanada.gc.ca

26. Think Canada!
Ms. Aslin Unlusoy
Trade Commissioner, ICT Digital Media, Investment, Wind Energy
Tel: 01 234 4061 E-mail: aslin.unlusoy@international.gc.ca
Mr. John Sullivan
Trade Commissioner, ICT Wireless & Software, Life Sciences, Agri-food
Tel: 01 234 4019 E-mail: john.sullivan@international.gc.ca

27. APP: Canadian Programs - Federal
Federal Departments and Agencies: Description of Programs or Policy by Organization Funding/Support Available
Canadian Radio-Television and Telecommunications Commission (CRTC) No direct funding support.
However, if an ISP levy is
Currently re-evaluating stance:
introduced there would be funding
Four possible outcomes, some not mutually exclusive: (i) continue to rely on market forces, (ii)
through an equivalent of the CTF
introduce/increase subsidies, (iii) add “opt-in” and “incentive-based” reg. mechanisms, (iv)
introduce more conventional reg. mechanisms
“New media broadcasting” and “mobile broadcasting” are currently exempt from Broadcasting
Act
Main Interests in new media:
Net neutrality: Interested in ensuring proper traffic management no undue discriminatory
conduct by ISPs (e.g. limiting access to certain websites, throttling)
Content: CTRC has divided content in 3: UGC, inexpensive commercial content (news,
information) and high-quality, expensive programming
Asking if new media will/has fundamentally changed „casting business model
Access to infrastructure: also an issue (affordability and availability of services)
Canadian Television Fund (CTF)
CRTC recently proposed changes to CTF that include the establishment of a new media
stream of production funding
This fund potential targets among „new media‟ segments were not discussed
Stipulates that broadcaster must pay for ancillary (e.g. web/mobile) rights
Rates of these rights are to be determined in terms of trade negotiations
Production, NM component:
Bell New Media Fund (IPF)
75% of costs up to $250k
To be eligible projects must (+ possible $100k bonus to match
include both NM and TV elements, broadcaster contribution)
obtain a minimum of 8 CAVCO points, Development, NM component:
have a broadcast commitment for the TV component 75% up to $50k (+ training element)
not be news, reporting, or sports
Total Funding (2007): $8.3 mil

28. APP: Canadian Programs - Federal
Federal Departments and Agencies: Description of Programs or Policy by Organization Funding/Support Available
CFC (TELUS Innovation Fund)
Part of Canadian Film Centre Up to $100k per project
Key criteria are innovation and narrative
Innovation Fund invests in new forms of high-quality, original Canadian content that explore
new ways of approaching entertainment and storytelling. This fund supports projects in the form of
a recoupable contribution towards the production of innovative film, television, new media, or Total Funding (annually):
cross-platform content projects. up to $300k
Requires that 50% of funding be in place
Fonds Quebecor
$500k per project up to 35% of
Funds the production of an interactive multimedia product that will use ICT including production and NM combined
necessarily high speed Internet or interactive television; projects must be associated to TV budget
programs that have been „picked-up‟ by a broadcaster.
Quebecor Fund “favours projects where use is made of advanced technologies permitting
Total Funding (2007): $3.5 mil
interactivity at the televisual production level as well as at the level of multimedia intended for high
speed Internet.”
Canadian Broadcasting Corporation (CBC) $10.3 mil spent in 2006-2007 on
“cross-media programming”
4 Internet services (cbc.ca, radio-canada.ca, radio3, bandeapart and RCIviva)
Most popular broadcaster-related site in Canada (2008), but not in top 25 of video content
Revenues more than double target in 2006/07
TV and Radio websites grew 19% and 13% respectively from 2005/06 to 2006/07
Signed deal with Quattro Wireless to provide real-time, ad-supported news, sports and
entertainment content through mobile phones
Negotiates with content providers for right in all formats
Widely applauded for multi-platform approach (e.g. trad. radio shows w/ websites and weekly
podcasts)
Have commissioned 1 web-only video content recently (Bloody Immigrants)
st

29. APP: Canadian Programs - Federal
Federal Departments and Agencies: Description of Programs or Policy by Organization Funding/Support Available
Canada New Media Fund (administered by Telefilm on behalf of the Department of
Product Assistance accounts for
Canadian Heritage
80% of all funding
Total annual budget is about $14.5M (2007) several layers of involvement (i.e. approvals) in
production process
Requires that copyright to be retained by CDN company
3 components of CNMF administered by Telefilm:
• Product Assistance – conditionally repayable advances for interactive digital cultural
content products in both official languages that are intended for the general public
• Sectoral Assistance – conditionally repayable (and non-repayable) advances to
initiatives that contribute to the industrial and professional development of the interactive
digital content industry in Canada.
• Sectoral Development – Telefilm driven initiatives to address gaps in industrial support
through events and initiatives that contribute to the industry’s participation at industry
events in Canada and abroad. Total Funding (2007): $14.5 mil
Canadian Culture Online (CCO) Gateway Fund – up to $50k for
any single project, with 25% of the
The funder for the CNMF (administered by Telefilm Canada) project budget contributed by the
Recently wound up 3 programs
applicant
Purpose is to develop policies and programs related to the Internet and digital technology to
bring our country's cultural content to Canadians. Partnerships Fund – up to
$500k or 75% of project budget (the
On-going funds:
lesser of the two)
Gateway Fund – aims to increase access to diverse Canadian cultural content online,
specifically aboriginal and “ethnocultural” content
Partnerships Fund – Aims to provide meaningful and seamless access to content that helps
deepen an understanding of Canada; primarily aimed at public, educational and NFP sectors
Recently Discontinued Funds:
Canadian Memory Fund – goal was to encourage federal agencies to digitize their collections
and make them available online to Canadians
aimed at supporting innovative applied research at the intersection of technology and culture
New Media R&D Initiative – a pilot project that was not continued to build a foundation for the
interactive media sector; funding totalled $27.3 million.

30. APP: Canadian Programs - Provincial
Provincial Ministries and Agencies: Description of Programs or Policy by Province Funding or Support Available
Ontario
Fund: 50% of budget up to $100k
Recently identified “digital media” as a key growth sector
Recently expanded interactive digital media tax credit by 5% to 25% of eligible labour Tax Credit: 25% of labour
expenditures expenditures
Geared to helping Ontario-based businesses with particular products
Interactive digital media fund (an OMDC Fund) supports the creation of original IP, assist in
capitalization, and contribute to financing.
Applies to consumer, commercial projects Total funding (2007): $870k
Also has tax credit (recently extended through 2012)
Quebec Strategic investment on a case-
by-case basis in addition to tax
Commits significant support to gaming industry through a series of one-off tax incentive
credit
(e.g. for Ubisoft, Eidos)
SODEC does not include „new‟ or „digital‟ media as a supported area
The Quebec government's refundable tax credit for the production of multimedia titles helps
companies lower their production costs. Depending on the category of titles produced, assistance
can represent up to 37.5% of labour costs.
British Columbia 30% non-refundable tax credit
for venture capital investment in NM
New Media Venture Capital Program – to support manufacturing/export or development of
by corporations (no max)
interactive new media products
30 % refundable (max $60k) per
tax credit per year for individuals
Manitoba MIDMF has 3 components:
Falls under the jurisdiction of Ministry of Science, Technology, Energy and Mines (STEM). 1) Market Research &
Manitoba’s rendition of “interactive” media mirrors that of Ontario Prototyping:
Manitoba Interactive Digital Media Fund (MIDMF) goals: up to 50% of approved eligible
• to provide recoupable financial support to Manitoba companies for the development, costs, to a max of $20k
production, and marketing/distribution of high-quality, original, Interactive Digital Media
2) Product Development: up to
products;
50% of approved eligible costs, to a
• to assist in the growth and development of a Manitoba Interactive Digital Media production
max of $50k
and distribution industry that is competitive in international markets;
• to raise the profile and presence of Interactive Digital Media creators in both domestic and
3) Marketing Assistance: up to
international markets (including providing travel assistance) while providing opportunities
50% of approved eligible costs, to a
for professional development
max of $25k

31. APP: Canadian Programs - Technical
Technical Funds: Description of Programs or Policy by Organization Funding or Support Available
Scientific Research and Experimental Development (SR&ED) 35% tax credit up to $2 mil on
labour, overhead, equipment;
Maximum expenditure limit (and other limits) increase to tax years ending after February 2008.
20% above $2 mil
A federal tax incentive program to encourage Canadian businesses of all sizes and in all
sectors to conduct research and development (R&D) in Canada that will lead to new, improved, or
technologically advanced products or processes
Supports R&D for improved technologically advanced products or processes (e.g. gaming
devices and game-related software)
A firm-level investment tax credit that is phased out as a company group
Industrial Research Assistance Program (IRAP) Canadian-controlled private
corporation (CCPC) can earn an
Provides advice to technology innovators
investment tax credit (ITC) of 35%
Provides non-repayable contributions to Canadian SMEs interested in growing by using
up to the first $2 mil of qualified
technology to commercialize services, products and processes in Canadian and international
expenditures for SR&ED carried out
markets
in Canada, and 20% on any excess
Also administers a network of innovators and financiers
amount
Recently committed to increasing the funding available per client
Stimulates wealth creation through technological innovation by providing technology advice,
assistance and services to SMEs to help them build their innovation capacity.

32. Think Canada!
Ms. Aslin Unlusoy
Trade Commissioner, ICT Digital Media, Investment, Wind Energy
Tel: 01 234 4061 E-mail: aslin.unlusoy@international.gc.ca
Mr. John Sullivan
Trade Commissioner, ICT Wireless & Software, Life Sciences, Agri-food
Tel: 01 234 4019 E-mail: john.sullivan@international.gc.ca