Alliance Numérique poised to take national leadership role with new funding

Quebec’s new media association is poised to receive $30 million in provincial and federal funding, some of which could be used to help mobilize the new media sector in other parts of Canada in an effort to build a strong national industry. Alliance Numérique president Claude Dagenais says that while the soon-to-be-announced funding is intended to further boost the work of the Alliance in Quebec, he’s open to helping the rest of the country. Following up on the work first envisioned by the now-defunct Interactive Multimedia Producers Association of Canada (IMPAC), Dagenais told new media leaders in Toronto in a September 28 speech that it’s crucial the entire Canadian industry work with its respective provincial governments to create a strong national sector. "I believe that if we want to be strong in Quebec, we need also to have a strong partnership in Canada," Dagenais tells CNM. "My personal vision – I don’t want to say it’s the vision of the association – but my personal vision is that we need to work with the other provinces. Since we’re a leader in Canada as far as associations, we’ll probably give all the support we can to get our act together. That’s why I was in Toronto. "We’re going to keep these meetings going in other parts of Canada to see how we can help and how we can organize. I made my government aware of this situation with IMPAC and asked them how they see that, if this is something that could be seen very positively if we support the rest of Canada. So far, everyone I saw has a very positive vision of that. If we can be a leader, and get this thing sorted out throughout Canada, then it would be really, really good for us." The $30 million in funding for the Alliance is over three years and is split 50/50 from the Péquistes and the federal Canada Economic Development body. The provincial portion of the funding will be administered by the ministries of Culture and Communications and Industry. After Dagenais’ speech in Toronto, which was organized by the New Media Business Alliance (NMBA) and sponsored by the Liberty Village New Media Centre, Toronto’s new media leaders are hoping to work closely with the Alliance in the absence of strong measures from the Ontario or federal governments, and following the demise of the short-lived IMPAC. Dagenais says he’s shocked at how poorly the Toronto new media industry is faring, and credits aggressive support measures by the Parti Québecois for a much stronger sector in his home province. While communities such as Ottawa and Toronto are reeling from the recent downturn in dot com fortunes, Dagenais says generous tax credits to attract workers, grants for startup companies, and now the multi-million dollars in funding for the Alliance have kept Quebec’s multimedia sector relatively insulated from the current economic climate. Dagenais says Quebec’s new media sector is continuing strong because it has moved away from a service model dependent on export. Unlike Ontario, where fee-for-service work is often performed for large U.S. and Canadian companies now in the midst of mass firings, 80 per cent of multimedia work done in Quebec isn’t for export, and fee-for-service constitutes less than a third of the sector’s work, he says. "What I saw in Toronto was companies doing work for the U.S – for example the car industry," Dagenais says. "They’re badly hit right now. Companies aren’t buying services anymore from the Toronto companies." By contrast, government support measures have contributed to less reliance on sub-contract work – in emulation, he says, of the Irish model of economic re-vitalization by the creation of a critical mass of IP-creating research companies. As Dagenais points out, both the Quebec and Irish models have relied on government to create the conditions necessary to create critical mass. He cites five-year tax holidays for newly-arrived multimedia workers and other targeted tax credits as key ways the government has attracted business to the province. "The message is that this, by itself, is not enough to get the industry off the ground, but it’s enough to attract companies here. And then, if you can help build companies that serve the companies that set up here, you create a favourable environment," he asserts. "That’s where we are right now. We are starting to produce our own games, our own training content. We started as sub-contractors. That was the vision of the government and it needed the involvement of several players. It needed the association…the school system is one of the players; the government is one of the players. It’s that mix that the people in Toronto, I gather, were interested in hearing about." Dagenais says Quebec has taken a markedly different approach to sector-building than Ontario, where a single, poorly-subscribed tax credit on labour has done little to help the majority of companies wean themselves from fee-for-service work. "I don’t want to say that their premier is doing something bad, but they’ve taken a different approach," he says. "It’s an approach that works, I would say, until last year because the people are less taxed; their burden is not as big as what it is in Quebec, but there’s less involvement with the government. When you have an economy that is strong, for example in Ontario, there’s a very alive service industry. When you have a strong service economy, then industry will thrive. But, when the economy is in a slump, then the service industry is usually the first one to pay for that." Ontario sector likes Quebec approachOntario’s new media leaders are taking note. NMBA head Luda Tovey says the provincial government could be doing more to help companies in her province along the lines of what the Quebec government has done. She notes that while the Ontario Media Development Corporation has a single tax credit offsetting 20 per cent of labour costs for small companies, Quebec City has three different programs: a collaborative tax credit, a labour tax credit and one geared toward investors. "It’s no way to drive an industry," Tovey says of Ontario’s approach. "What Quebec has done, in addition to launching a tax credit program, it’s launched a subsequent program that helps guarantee loans to the bank. That enables developers, like a lot of the industry that is reliant on the income that comes from professional services, to make these tax credits bankable. It’s one thing launching a program. It’s another thing having a good understanding of your local landscape and thinking through issues related to implementation. That was not done here, unfortunately." She says NMBA is exploring ways to work with the Alliance to help boost the industry in Ontario but that it’s premature to begin discussing what forms that may take. One of the avenues likely being discussed in Ontario’s association board rooms is some kind of amalgamation to help focus activities. Dagenais says one of the key elements of his association’s success has been close cooperation with the government as a single point of contact for the entire industry. Last December, three of Quebec’s multimedia groups merged to create the Alliance (CNM, Dec. 14/00). That initiative has paid off with the upcoming funding announcement. Premier is new media supporterIn a strange twist to the tale, if support from the Alliance for the rest of Canada materializes, credit might be laid directly at the feet of PQ premier Bernard Landry. Dagenais says Landry has been a champion for the sector since his days as finance minister for primarily economic as opposed to cultural reasons. It was Landry, he says, who saw the utility of adopting an Irish model for Quebec as other industries such as the automotive sector face a decline in the province. Quebec has always given strong support to its cultural sector as an island of French on a predominantly Anglophone continent. Landry, however, has envisioned multimedia, along with bio-pharma and the aerospace sectors, as ways to offset the lack of other industries such as manufacturing in Ontario or energy in Alberta. "It’s not magic. It’s simple," says Dagenais. "We have very good relationships at the top and we have a leader, Bernard Landry, that has been a leader for some time to help our industry." He says that’s one of the key messages he delivered in his Toronto address, and one that has generated the greatest reaction. "What I delivered was a real business message. It’s really simple stuff. If you want to work with government, you have to sell to them. If you want to sell to them, you don’t want them to be your enemy. You need to be friends with them… you need to be present at the government level… At the same time as you can be friends with the government, you can also manage crises. There’s a crisis right now, and it should be brought to the attention of the right people. I saw Toronto as being a disaster zone. There’s people being laid off. There’s a lot of people losing their jobs, losing their companies. should be aware of that."

Alliance Numérique poised to take national leadership role with new funding

Broadcast | October 18, 2001

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