Over the last twenty years, indirect funding has become the most common source of funding for eligible research and development (R&D) work. The Scientific Research and Experimental Development (SR&ED) tax incentive program has been used as one of the main indirect funding sources by countless companies performing R&D. Although SR&ED continues to help companies remain competitive through supporting innovative development, direct funding from repayable and non-repayable grants is beginning to gain momentum.
In Canada, companies in the digital media industry can benefit from both direct and indirect funding. Currently, digital gaming for online, mobile platforms is making major headway in Canada. Game development relative to improvements in concurrency, presentation, processing power, cross-platform development, simulation and motion capture, as well as mobile or online gaming are eligible for indirect funding through SR&ED. Moreover, interactive digital media (IDM) companies can receive direct funding through the Canada Media Fund (CMF) to cover expenditures related to the development, production, and marketing of IDM products.
There are two streams in CMF: convergent and experimental. The convergent stream is for development projects, whereas the experimental stream provides funding for development, production, and marketing and promotion. Technology infrastructure, project audit fees, research and content preparation, salaries and benefits, and travel and accommodation are eligible expenditures. Additionally, IDM companies can receive funding through the experimental stream for expenditures related to the cost to put digital content online, such as copyright clearance and translation costs.
