OMDC tax credit gaining steam: Ostry

The future of the Ontario Digital Media Tax Credit continues to hang in the air a year-and-a-half after its launch as a greater number of companies apply for the help. While the credit was seen as a failure a little over a year ago, much-maligned and with only a handful of applications, today 35 companies have applied for $1.5 million in total labour credits under the program. Adam Ostry, president of the Ontario Media Development Corp. (OMDC), which is responsible for administering the credit, says the number of companies which have applied for the credit represents a huge improvement over the course of the year, but the agency will have to continue monitoring its progress since it’s no longer either an unqualified success or disaster. Ostry tells Canadian NEW MEDIA that he’d like to see as many companies apply for it as possible, but recognizes there are outstanding issues relating to partnership restrictions that still need to be addressed. It’s premature, however, to take action until the agency has a better idea of how the credit is performing. "The uptake is a symbol of the utility of the credit. If no one is using the credit, then it’s not useful….It was put there to create jobs and it was put there to stimulate owned content as a means of wealth retention and diversification in the province. "If the credit isn’t being used, chances are the public policy objectives underlying the application of the credit in the first place aren’t being achieved. We are continuing to (monitor) that and, at some time, we will sit down with the Ministry of Finance and say, ‘I think these are substantive impediments to its use.’ And, we will also continue to consult with the industry players themselves to get their input." Discovering how successful the program has been, however, has proven difficult since the number of applications has grown many-fold over the course of the year. To date, 24 different companies have submitted 35 applications worth $1.5 million. OMDC has issued 14 certificates approving the credit to nine different companies, and just under $460,000 in cash has already been paid out. While the number is encouraging, Ostry concedes it’s a far cry from the $10-15 million the credit was expected to cost the provincial government when it was first launched. Restrictions on partnerships is largely responsible for the much lower cost of the program, something the industry has railed against since its inception (CNM, Sept. 20/00). One company that met all the requirements is Digital Frog Inc., which applied for the credit last summer (CNM, July 12/00). At the time, principal Celia Clark told CNM that the credit was ideally suited for a small company like hers creating original content. Recently contacted, Clark maintains that the credit has proven useful, even though the red tape and delays in getting cheques have been surprising. While program guidelines call for the OMDC to issue a certificate within 12 weeks, and for the Ministry of Finance to issue a cheque within 12 weeks after that, Clark says it was a year before she got her money. Ostry is sympathetic to Digital Frog and other firms caught in the bureaucracy, but says prudent fiscal management creates delays while information is verified. He says the situation should be somewhat alleviated by a new memorandum of understanding signed between OMDC and the Ministry of Finance, which will cut down on the number of requests for information being generated by the ministry that overlap information already solicited by the agency. Ostry also tells CNM that the OMDC is in the midst of a program review expected to conclude early in the new year that will determine new directions for additional funding received last year as part of the consolidation of the various media agencies in the province (CNM, June 14/00). The focus will be on creating new convergence products from the agencies’ different film, video, digital, book, sound, and magazine clients.

OMDC tax credit gaining steam: Ostry

News | 12/13/2001 5:00 am EST

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