The stupid Quebec gaming tax breaks have FINALLY been scaled back

[Humanity has risen!]

http://www.pcgamer.com/2014/06/19/ubisoft-ceo-ponders-reductions-to-quebec-tax-breaks/

Ubisoft CEO ponders the future after Quebec cuts tax breaks for game studios
Andy Chalk at


Ubisoft Montreal is one of the company's biggest studios, with more than 2,600 employees. But it was built primarily on the strength of Quebec's generous subsidies and tax breaks, and with a newly-elected government facing serious debt problems, those breaks are being cut back. That has CEO Yannis Mallat taking another look at the studio's long-term future.

"I think we need to analyze what this means for us," Ubisoft CEO Yannis Mallat told IGN. "Then once the analysis is done, we'll be able to decide what the next stage is for us."

The cuts were confirmed in detail earlier this week by Develop, which noted that tax credits on salaries that currently go as high as 37.5 percent will be reduced to 30 percent for games produced in French and 24 percent for those produced in other languages. As revealed in a 2005 press release, Ubisoft enjoyed the maximum reimbursable tax credit, and it also received multiple millions of dollars in support from various government agencies.

Ubisoft announced in September 2013 a plan to create 500 new jobs by 2020, a decision reached primarily thanks to the promise of more government money, including a $9.9 million investment in the expansion and even more tax incentives. But that government was voted out of power in April of this year, and its promise of support went with it, and while Mallat said Ubisoft is still aiming for growth in the province, it's not the "primary goal."

"I think what Quebec has become over the years in terms of videogame development, it’s not a hotbed," Mallat said. "So obviously this tax program was here to help build that environment. So we see this program as an important reason for the growth of the sector in Quebec."

But is it a priority at all? "Not a hotbed" is an interesting choice of words, but the tax breaks are being reduced, not eliminated, and Montreal remains a major development hub. Mallat may not be happy, but I suspect that Ubisoft won't be going anywhere.

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After 18 years, finally! Paying dozens of millions every year to help companies that are already very profitable like Ubisoft to make even more money is now a less ridiculous endeavor. The only acceptable outcome is to turn them to nothing, and to give a good kick in the rear to all those Ubisoft executives, and don't let the door hit them on their way out.

Watch them scale back all their studios and close up shop within the next 6-7 years. All that BS about the "talent in Montreal" is going to be exposed for what it is.

It's scary to think that the AAA industry is now so sick that more or less only Montreal and a few other corporate welfare states/cities make it viable.

 

[Melan]

It is always amazing to watch multinational corporations with revenues in the billions of dollars bawling like little kids about having to pay taxes just like all those peasants. No perspective whatsoever, and not an ounce of respect or gratitude for the public that has generously subsidised them so far. Just temper tantrums.

 

[Jick Magger]

Goddamn Canadians.

 

[DragoFireheart]

Goddamn Canadians.

 

[Sodafish]

"Then once the analysis is done, we'll be able to decide what the next stage is for us."

Duh. Massive layoffs after "careful consideration".

 

[Whisky]

Please don't tell me they're going to move here...I already feel dirty whenever I come within a 1 KM radius of the EA building.

 

[Azazel]

Hopefully this means Eidos will die and Ubisoft will no longer be able to pump out generic trash every six months. As a Canadian, nothing would please me more than actually fucking taxing companies instead of paying them to be here.

 

[Spectacle]

Canada is a wealthy country, I think it's perfectly fair that Canadian taxpayers should finance games for the rest of the world.

Sent from my D5503 using Tapatalk

 

[taxalot]

The next logical step

 

[TedNugent]

I like how these fuckbags talk about how they're going to pack up and leave as though they weren't basking for years in massive tax breaks. Shows you how this shit works. Tax cuts for businesses are a race to the bottom, every time.

Also, regarding Canada, these are the same miserable idiots that had the audacity to bail out Silicon Knights after that Too Human debacle.

 

[Renegen]

Lol I thought the tax cut got removed, it went from 37% to 24%, oh noes! Good move for it to be scaled back, that's what strong independent profitable businesses can withstand.

 

[Average Manatee]

37.5%! Jesus fucking christ. That balances out to a 60% increase in salary. Everyone in Canada should take a look at their present salary, extrapolate the effects of a 60% increase over the next decade, and think about pooling together a few hundred thousand with their co-workers to bribe some bureaucrat to give their business a reach-around. I suppose you'd have to cut a deal with management to give them 20% or so, but still.

Lol I thought the tax cut got removed, it went from 37% to 24%, oh noes! Good move for it to be scaled back, that's what strong independent profitable businesses can withstand.

Ubisoft's games probably quality for the 30% figure since they have a French language option. And even that means a 42% increase in salary. If you told me I could open a business somewhere and offer a 40% higher salary than baseline elsewhere, I'd quickly pick up the best talent available in a heartbeat.

 

[Renegen]

It's not a 60% increase in salary, it's a tax subsidy for Ubisoft to move to Montreal. The video game industry in Montreal barely existed 10 years ago there and now it's thousands of people and has done things like create whole education programs there and side industries. Controversial economic development strategy but there's been many headlines of other countries losing their video game industry to the benefit of Montreal, I remember Australia and Britain. The tricky part is when the patient is weaned off the drug, that's when we see the true face of business and government.

 

[Azazel]

Yeah, Manatee, it meant that Ubisoft was only paying 60% of their staff salaries and the taxpayer was covering the rest. Remember kids, socialism is only good when it's corporate socialism.

 

[Average Manatee]

It's not a 60% increase in salary, it's a tax subsidy for Ubisoft to move to Montreal. The video game industry in Montreal barely existed 10 years ago there and now it's thousands of people and has done things like create whole education programs there and side industries. Controversial economic development strategy but there's been many headlines of other countries losing their video game industry to the benefit of Montreal, I remember Australia and Britain. The tricky part is when the patient is weaned off the drug, that's when we see the true face of business and government.

If you're paying someone $160k a year and you have a 37.5% tax credit, you're only paying $100k for your employees to get $160k out of it. A 60% increase in their salary at no cost to you.

 

[tuluse]

If you're paying someone $160k a year and you have a 37.5% tax credit, you're only paying $100k for your employees to get $160k out of it. A 60% increase in their salary at no cost to you.

It doesn't quite work that way. It's their salary + taxes + other costs with having employees - credit.

 

[Average Manatee]

Its close enough. In America the only factor getting in the way would be the 7.5% social security tax that employers pay, costing them an additional 4.5k (although its actually capped at an income of about 110k so it would barely apply in this example). Dunno if Canada has anything similar or how big it would be.

You don't have additional costs paying an employee more, its not like an employee being paid 60% more requires 60% more office space to work in. Of course if you are instead paying the same amount and hiring 60% more employees in the first place, that's different. But that wasn't the example given.

 

[DeepOcean]

Canadian goverment: We should tax the hell of all small and medium canadian companies and give tax subsides to rich big french companies that don't give a shit about us, that will work.

Canadian goverment: Where the canadian companies gone? There are those french faggots everywhere living like parasites. IT'S FRENCH IMPERIALISM!

 

[Azazel]

If you're paying someone $160k a year and you have a 37.5% tax credit, you're only paying $100k for your employees to get $160k out of it. A 60% increase in their salary at no cost to you.

In what possible la-la land would an employer, especially a digital industry employer, use a massive tax break to raise an employees salary rather than cut their costs and hire more bodies for lower wages?

Are you still in highschool, and yet to experience the harsh reality of our corporate oligarchy?

 

[Average Manatee]

If you're paying someone $160k a year and you have a 37.5% tax credit, you're only paying $100k for your employees to get $160k out of it. A 60% increase in their salary at no cost to you.

In what possible la-la land would an employer, especially a digital industry employer, use a massive tax break to raise an employees salary rather than cut their costs and hire more bodies for lower wages?

Are you still in highschool, and yet to experience the harsh reality of our corporate oligarchy?

I never said that the employer would raise their salary, but the point is that the state is paying for joe asshole making Assassin's Creed to have a salary 60% higher than what it should be otherwise for the the employer is willing to spend.

 

[Humanity has risen!]

The worst is that Quebec has just about the lowest paid game industry people in all of North America, which makes it all the more outrageous. The most absurd is that without this sort of made in Montreal cheap labor huge chunks of the AAA industry would basically become unsustainable.

 

[Azazel]

If you're paying someone $160k a year and you have a 37.5% tax credit, you're only paying $100k for your employees to get $160k out of it. A 60% increase in their salary at no cost to you.

In what possible la-la land would an employer, especially a digital industry employer, use a massive tax break to raise an employees salary rather than cut their costs and hire more bodies for lower wages?

Are you still in highschool, and yet to experience the harsh reality of our corporate oligarchy?

I never said that the employer would raise their salary, but the point is that the state is paying for joe asshole making Assassin's Creed to have a salary 60% higher than what it should be otherwise for the the employer is willing to spend.

No, you still aren't getting it. Ubisoft used the tax break to make their already pathetically low wages even lower after the cut was factored in, so instead of paying all of a 45k salary they only paid $28k and taxpayers covered the rest. They didn't use it to pay out higher wages than they would have otherwise, they used it to make their low wages lower.

Get it now?

 

[Average Manatee]

If you're paying someone $160k a year and you have a 37.5% tax credit, you're only paying $100k for your employees to get $160k out of it. A 60% increase in their salary at no cost to you.

In what possible la-la land would an employer, especially a digital industry employer, use a massive tax break to raise an employees salary rather than cut their costs and hire more bodies for lower wages?

Are you still in highschool, and yet to experience the harsh reality of our corporate oligarchy?

I never said that the employer would raise their salary, but the point is that the state is paying for joe asshole making Assassin's Creed to have a salary 60% higher than what it should be otherwise for the the employer is willing to spend.

No, you still aren't getting it. Ubisoft used the tax break to make their already pathetically low wages even lower after the cut was factored in, so instead of paying all of a 45k salary they only paid $28k and taxpayers covered the rest. They didn't use it to pay out higher wages than they would have otherwise, they used it to make their low wages lower.

Get it now?

That's... what I said? The government is artificially inflating the workers salary by 60% over what Ubisoft wants to pay. In your example Ubisoft wants to pay only 28k, and the government is using tax dollars to make that 45k.

I really don't get what you are trying to argue. You seem to be caught up in useless semantics.

 

[Abelian]

Paying dozens of millions every year to help companies that are already very profitable like Ubisoft to make even more money is now a less ridiculous endeavor. The only acceptable outcome is to turn them to nothing, and to give a good kick in the rear to all those Ubisoft executives, and don't let the door hit them on their way out.

Écrasez l'infâme.

 

[Spectacle]

That's... what I said? The government is artificially inflating the workers salary by 60% over what Ubisoft wants to pay. In your example Ubisoft wants to pay only 28k, and the government is using tax dollars to make that 45k.

I really don't get what you are trying to argue. You seem to be caught up in useless semantics.

By saying "inflating the salaries" you make it sound like the workers get more money than they otherwise would have because of these tax breaks. In reality the salary level is set by market factors, and ubisoft is pocketing the tax break, the individual workers see little of it. It's not semantics, it's an important difference.