Gaming and tech ecosystem shows potential as Alberta drops tax credits, adds panel

• This story is part of The Homestretch'sTech for Tomorrow series: An in-depth look at what's being done to grow the technology industry in Calgary.

Insiders say the Alberta technology industry is poised for all kinds of growth, including an ecosystem that attracts entrepreneurs. But many of those experts have told The Homestretch that slashing provincial tax credits is counterproductive, while the province says stay tuned, it's studying the issue.

The president of the Calgary Game Developers Association says the gaming sub-sector of techhas exploded over recent years.

Five years ago, the group had 10 members, mostly creating games in their garages or basements, Mike Lohaus told The Homestretch.

"We are now just shy of 880 members."

But a gaming company president says the UCP government's decision to cut tech tax credits demonstrates the industry is not a priority.

"When you cut an investment tax credit, it's a statement beyond, 'We're trying to save money,'" New World Interactive president Keith Warner told CBC News late last year at a Banff conference.

"It's a statement that says, 'We don't really care about this industry, or the cross-section of digital media.'"

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A Calgary Economic Development commissioner notes lots of people are talking about the loss of tax credits.

Luke Azevedo, commissioner of film, television and creative industries, says companies are already turning away from Alberta.

But the economic development minister says her government is taking a bigger picture approach to tech sector support.

"Credits like the Alberta Investor Tax Credit (AITC) and the Interactive Digital Media Tax Credit (IDMTC) were application-based and administratively heavy," Tanya Fir told The Homestretch.

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"It involved the government picking winners and losers. Our goal, instead, was to create the best broad-based conditions for companies to thrive."

And there's a panel now looking into it.

"We recently named Innovation Capital Working Group with the express intent of coming up with new ways to attract investment to early-stage tech companies, but also looking at best practices across North America," Fir said.

Alberta only province without tax credits, says veteran

But one tech veteran says there is general agreement of what best practices for the sector in Canada already are.

The chief marketing officer at 4iiii Innovations Inc., Victoria Brilz, says Alberta is now the only province without support in the form of tax credits.

So why would tech entrepreneurs and companies come to Alberta?

"That is what we have tasked the Innovation Capital Working Group with," Fir said.

A co-founder of the popular SkipTheDishes food delivery service isn'twaiting for the panel results.

What Calgary could be

Chris Simair helped build the company from scratch but sold it for $200 million four years ago and now is now considering Calgary as a home base for his newest project, Harvest Ventures.

"If you think about the last 30 years and the real entrepreneurs who pioneered the oil and gas patch, what they have done for Calgary, I think it's the same entrepreneurial movement that is looking toward diversification," Simair said.

"We have a real opportunity here to piggyback on what's been built and look forward to what the new Calgary could be."

Simair says it's possible Calgary is about to turn the corner and become competitive with Canada's larger tech environments like Vancouver, Montreal and Toronto.

"You don't have a Shopify here, you don't see large success stories coming out of Calgary, although it's starting to emerge. There is a lot of technology being developed here, we just need to do a better job of getting to the world stage," he said.

"The world is changing and it's not just oil and gas. It is all industries."

Gaming success stories

Lohaus at the game developers association says there are already success stories on the local gaming horizon.

"Semispheres by Vivid Helix is an outstanding game. It's a bit of a mind-bender for sure," Lohaus said.

"It's very abstract. It's very much its own game. Some of the stuff in development is really exciting, the guys over at the Dead Matter team. They have raised an incredible amount of money to build a post-apocalyptic zombie survival game set right here in Alberta."

Wanted to stay in Calgary

And for Lohaus, gaming and Calgary have always been constants in his life.

"I had an Atari 2600 growing up and I never let it go," he saidwith a laugh.

"I knew I always wanted to build games, whether that was going to be moving to Vancouver, Toronto or Montreal to work in a big game studio, or start my own projects. That is what I ended up doing. I wanted to stay here in Calgary."

For Simair at Harvest Ventures, a company to help startups get through those initial hurdles, support from a variety of places, not just tax credit, is critical.

"We had to work with government, with academia, and we had to be resourceful and innovative in how we approached this," Simair said of financing a startup.

"There are many ways to help. Capital is only one of them."

And he's got some advice for people looking at tech startups.

"Get experience. Get exposure. Don't jump in head first. Find smarter people than yourself. Go out there and network. There are a lot of Calgarians who feel the same way you do."

Post-secondary cuts unhelpful

Some experts have said post-secondary education is critical in providing much needed talent for the thousands of anticipated jobs in technology in the province.

Calgary Economic Development's Mary Moran says the future is near.

"In the next two years, there is going to be $18.5 billion invested in our province," Moran said earlier this month.

"We are going to triple the number of software engineers and data scientists that we need in the next four years."

A technology veteran of 25 years, Shawn Abbott, questionsthe wisdom of deep cuts to post-secondary made by the UCP.

Picking sides?

But the economic development minister says her ministry and the advanced education ministry remain focused on these challenges.

"I am going to continue to have conversations with the minister ofadvanced education on the importance of continuing to support this.Demetrios Nicolaides is working hard to help post-secondary," Fir said.

She notes the UCP believes it doesn't have to pick sides.

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"We don't believe it is energy or technology; energy or the environment. We believe we can have both," Fir said.

But critics might argue the establishment of a $30-million a year agency to singularly promote the oil and gas industry and talk of government investing directly in the industry itselfsuggest priorities.

Panel wraps in April

The NDP energy critic has called on Premier Jason Kenney to scrap the Canadian Energy Centre.

"Kenney's war room isn't just failing to meet its goal, it's actually exposing Alberta to ridicule and providing a platform for opponents of pipeline expansion," Irfan Sabir said last month.

Some argue Canadian taxpayers also pick favourites, through direct and indirect subsidies that the oil and gas industryreceives more than $3.3 billion every year.

Fir said the panel will have recommendations in early April.

• This story is part of The Homestretch'sTech for Tomorrow series: An in-depth look at what's being done to grow the technology industry in Calgary.