In the 2015 Ontario Budget, published by the Ministry of Finance, the Government of Ontario announced a review of the Ontario Interactive Digital Medial Tax Credit program (OIDMTC). As a result of this review, the government has re-stated and re-emphasized the program to focus on interactive entertainment products, and on educational products for children under the age of 12. Under the reviewed OIDMTC program, ineligible products would include news applications, search engines, social media platforms, and functional databases.
Ontario also proposed an amendment to the requirement that at least 90% of the digital media product be developed in Ontario by the company applying to the OIDMTC program. This requirement will be replaced with new stipulations:
- 80% of total labour costs for eligible products must be attributable to qualifying salaries and wages as well as qualifying remuneration (contract payments to Ontario freelancers operating either as sole proprietors or through personal service corporations).
- 25% of total labour costs for eligible products must be attributable to wages of the corporation’s employees.
These rules will not apply to projects that were started before April 24th, 2015.
In the budget, it was also reported that Ontario provided approximately $335 million between 2014-2015 to the film and television industry through the Ontario Film and Television Tax Credit (OFTTC), the Ontario Production Services Tax Credit (OPSTC), and the Ontario Computer Animation and Special Effects Tax Credit (OCASE). Moving forward, the OPSTC will be reduced from 25% to 21.5% for expenditures incurred after April 23rd, 2015, and the OCASE will be reduced from 20% to 18% for expenditures incurred after the same time. Despite the reductions, both programs are noted to remain competitive compared to other Canadian jurisdictions.