the ontario technology corridor advantage for digital media and ict august 2012

The Ontario Technology Corridor advantage for digital media and ICT

August 2012

www.ontariotechcorridor.ca

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Welcome to the Ontario Technology Corridor

If yours is an Information Communications Technology (ICT) or digital media company seeking to expand or relocate into the North American market, you need to consider Ontario, Canada.

The Ontario Technology Corridor is North America’s gateway to innovation, offering:

• A deep talent base• Excellent growth opportunities• A low-risk business environment• Generous targeted tax credits• A strategic geographic location

Why the Ontario Technology Corridor?

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A two-hour flight from many major U.S. cities

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Zoom in on the Ontario Technology Corridor

Greater Toronto Area and Ottawa Region

Population: 6.1 million

Companies: 3,362

Workforce: 148,000

Population: 1.3 million

Companies: 1,922

Workforce: 75,000

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Waterloo Region and City of London

Population: 550,000

Companies: 880

Workforce: 30,000

Population: 450,000

Companies: 350

Workforce: 8,000

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Niagara Region

Population: 442,908

Companies: 470

Workforce: 3,500

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Top 10 reasons to invest in Ontario

1. Stable, highly talented, motivated workforce

2. Access to the North American market (NAFTA)

3. Openness to diversity and multiculturalism

4. Economic engine of Canada

5. World class research institutions

6. Innovation leadership

7. Low risk business environment

8. Superior infrastructure

9. Business incentives

10.Quality of life8


Ontario offers one of the World’s most educated populations

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% Population Age 25-64 with Tertiary Level Education

Ontario has 44 world class universities and colleges – Canada’s largest talent pool

• University of Waterloo• Wilfred Laurier University• University of Toronto• Ryerson University• York University• Brock University• University of Western

Ontario (Western)• University of Ontario

Institute of Technology• Ontario College of Art &

Design University• Carleton University• University of Ottawa

• Conestoga College • Centennial College• George Brown College • Humber College• Seneca College • Sheridan College• Niagara College • Fanshawe College • Durham College• Algonquin College• La Cité collégiale• Stratford Institute

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Ontario’s internationally respected education system includes over 400 registered private career colleges, 20 public universities and 24 colleges. Among these are:

Ontario digital media related programs

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Ontario – the innovation society!

Gnomeo & Juliet created by Toronto-based Starz animation is the largest animated feature ever produced in Canada.

• Ottawa: Algonquin College in cooperation with Carleton University offers Interactive Multimedia and Design (IMD), a 4 year degree program

• Toronto: Ryerson University’s Digital Media Zone in its first two years fostered 45 companies and 438 jobs

• Waterloo Region: Communitech HUB, the provincially funded ($26 million) Ontario Centre of Excellence for Digital Media

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The Ontario Technology Corridor is the economic engine of Canada

• The OTC represents 92% of the Province’s ICT industry

• Key Sectors include: software development and services, telecom equipment, digital media, microelectronics

• Ontario has about 1,000 interactive digital media companies that employ 16,000 people and create $1.5 billion in revenue

• Ontario's entertainment and creative industries support 300,000 jobs and contribute $12.2 billion to the province’s GDP

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Home to 6,400 ICT companies

• Greater Toronto Area: Ubisoft, Tecmo Koei Canada Inc., Capcom Interactive Canada Inc., Zynga Inc., Arkadium Inc.

• Ottawa: Fuel Industries Inc., Magmic Inc., bitHeads Inc., which includes HeadGames and Playbrains Inc.

• Waterloo Region: Research in Motion Ltd. (Blackberry), Open Text Corp., Google Inc., SAP Canada Inc., Electronic Arts Inc.

• Niagara: Keyframe Digital Productions Inc., morro images Inc., nGen (Interactive Media Generator)

• London: Digital Extremes Ltd., Big Blue Bubble Inc., Antic Entertainment Inc.

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Canada – a sound choice for new investment and trade

• Foreign Direct Investment (FDI) into Canada has more than doubled in the past decade

• By 2012 the federal corporate income tax falls from 18% to 15% – the lowest in the G7

• By 2015 tariffs on all manufacturing inputs reduced to zero, creating a national Free Trade Zone

• Most of Canada’s population of 33.7 million people live within 200 kilometers of the United States

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Canada has a low-risk business and regulatory environment

Canada also has:

• World’s soundest banking system

• Lowest taxes on new business investment in the G7

• Low Inflation and low interest rates

And:

• It takes only one procedure and five days to register a new company in Canada

• Forbes Magazine ranked Canada #1 for business in a study ranking 134 countries (October 2011 report)

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Ontario offers highly favourable tax treatments for R&D

• In Ontario a broader range of costs qualify for deductions than in many jurisdictions

• When tax credits are factored in, $100 in R&D expenditures can be reduced to about $57 or $39 for small businesses

• Five of the world’s ten biggest ICT firms conduct R&D in Ontario: GE, Siemens, Intel, Cisco and IBM

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Ontario’s digital media incentivesand targeted tax credits include:

• Ontario Business Research Institute Tax Credit (OBRITC)

• Ontario Innovation Tax Credit

• Ontario Research & Development Tax Credit

• Ontario Computer Animation & Special Effects Tax Credit

• Ontario Interactive Digital Media Tax Credit

• OMDC Interactive Digital Media Fund

• OMDC Ontario Sound Recording Tax Credit

More information at www.ontariotechcorridor.ca

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Ontario targeted incentives at a glance

SUPPORTPROGRAMS/INCENTIVES

CRITERIA HOW MUCH

Ontario Business Research Institute Tax Credit (OBRITC)

Must incur qualified expenditures in respect of scientific research and experimental development (SR&ED) under an eligible contract with an eligible research institute (ERI)

20% refundable tax credit for SR&ED expenditures incurred in Ontario under an eligible contract with an ERI. The maximum amount a corporation can claim is $4 million

Ontario Innovation Tax Credit

Must carry on eligible SR&ED in Ontario

10% refundable tax credit for qualifying. Can be combined with OBRITC (above) for a total of 30%

Ontario Research and Development Tax Credit

Must carry on eligible SR&ED in Ontario

A Canadian-controlled private corporation (CCPC) can earn an investment tax credit (ITC) of 35% up to first $3 million of qualified expenditures for SR&ED and 20% for any excess amount

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Digital media incentives in Ontario

SUPPORTPROGRAMS/INCENTIVES

CRITERIA HOW MUCH

Ontario Computer Animation & Special Effects Tax Credit

Computer animation and special effects activities in film or TV production

20% refundable tax credit for eligible labour expenditures

Ontario Interactive Digital Media Tax Credit

Labour, marketing and distribution expenditures for the creation of interactive digital media products

40% of eligible labour, marketing and distribution expenditures

OMDC Interactive Digital Media Fund

Labour expenditures and eligible marketing and distribution expenses claimed with respect to interactive digital media products

A non-refundable contribution of up to $150,000 to a maximum of 50% of the project budget to create a market-ready interactive digital media content product

OMDC Ontario Sound Recording Tax Credit

Eligible production and marketing costs incurred by a qualifying corporation with respect to an eligible Canadian sound recording

20% refundable tax credit for eligible sound recording company for production and marketing costs with respect to an eligible Canadian sound recording

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Ontario’s NAFTA advantage

What this

means for

your company:

• 450 million people in North America’s $17 trillion market

• Either preferential (reduced) or eliminated tariff rates for North American goods traded between Canada, the U.S. and Mexico

• Protection of investment and intellectual property (IP) laws and regulations are enforced equally among all trading partners

• Skilled ICT suppliers

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Ontario’s NAFTA advantage


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What this

means for

your company:

• New market opportunities

• New partnerships

• New customers

• New investors

• New links in supply and production chains

• New choices for consumers

• Economic growth

• High standards of living

Excellent infrastructure of international airports

• Toronto Pearson

• Toronto Billy Bishop City

• Ottawa Macdonald-Cartier

• Region of Waterloo

• London

• St. Catharines/Niagara District

• Hamilton John Munro

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Ontario – international destination, world class convention facilities

• Ottawa Convention Centre – 192,000 square feet of usable space, a bold, modern design

• University of Waterloo Conference Centre

• Scotiabank Convention Centre, located just 1640 feet from the Horseshoe Falls, Niagara

• Metro Toronto Convention Centre and The International Centre, adjacent to the airport

• London Convention Centre – tiered 300 seat theatre

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Well developed highway, rail, and shipping

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• Largest and busiest freeway network in Canada

• Efficient 400-series highways and municipal expressways

• Ports connect major manufacturing, processing, transportation services and logistics expertise

Established mass transit system

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• GO Transit interregional public transit system carries 50 million/passengers/year

• The Corridor, a VIA Rail passenger train service area

• The Toronto Transit Commission’s (TTC) subway system, linked with buses, hybrid buses and streetcars carries ~ 1.6 million riders/day

Highly integrated telecommunications network

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• One of the most extensive and integrated telecommunication networks in North America

• The largest “free calling” area in North America

• 100% Digital Telecom Infrastructure

• High speed data services

• Internet connectivity

• E-business services

Niagara is one of the busiest Canada-U.S. borders

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• 2nd busiest point of entry between Canada and the U.S., the world’s largest trading relationship

• Four efficient bridges for U.S. border crossings

• The Welland Canal offers direct shipping access from the Atlantic Ocean

Openness to diversity and multiculturalism

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Excellent culture and sports facilities

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Very high quality of life

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Safe, stable, and well governed

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• Canada is a constitutional monarchy

• Canada has a three-tiered system with Federal, Provincial, and Municipal levels of government

• Municipal governments are under provincial jurisdiction and governed by an elected mayor and council

Ontario cities and towns offer a superior lifestyle

Canada has the most liveable destinations in the world! Economist Intelligence Unit (EIU)

• Low crime

• Highly stable

• Highly developed infrastructure

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The Ontario Technology Corridor advantage for digital media and ICT

August 2012

www.ontariotechcorridor.ca

the ontario technology corridor advantage for digital media and ict august 2012

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