Tax Policy

A study by Université de Sherbrooke researchers, Michaël Robert-Angers and Luc Godbout, provided an in-depth examination of Quebec’s Tax Credit for Multimedia Titles (CTMM), a tax credit primarily used in the province's video game industry. Introduced in 1996 to boost employment during an economic downturn, the CTMM now covers up to 37.5% of a project’s labour costs, costing the provincial government around $350 million annually. The study revealed that a handful of businesses, especially foreign ones like Ubisoft, account for a significant portion of the claimed credit. Notably, many companies receive more from the tax credit than they pay in taxes. The researchers proposed reforms to increase the credit's value-add functions rather than its cost. As the job market has evolved since the 1990s, there's a debate over the relevance of such wage subsidies. This transparency around CTMM sparks discussions on how Canada's broader corporate tax credit system, such as the Scientific Research and Experimental Development (SR&ED) tax credit, can be more transparent and effectively reformed.