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From Site Selection magazine, November 2009

Digital Destination

Sandra Pupatello is Ontario’s Minister of Economic Development and Trade.

Ontario fosters a new media sector.


oronto is making a concerted effort to become Canada's next nexus of digital media. It took a large step when industry heavyweight Ubisoft, which has huge operations in Québec, announced in July it would create a major studio in Toronto. Ubisoft will invest C$500 million* in the project and will receive a C$263-million grant from the Province of Ontario.

As Ubisoft develops, it figures to become the signature company of Ontario's burgeoning industry.

"We've got a big push on in this sector," says Sandra Pupatello, Ontario's Minister of Economic Development and Trade. "We have tremendous strengths here and we have seen a tremendous growth in the industry. Companies tell us that talent is everything and they have to be where the talent is."

Ontario's pursuit of Ubisoft was a three-year effort.

"I had a longer courtship with Ubisoft then I did my husband," Pupatello jokes. "We met here, in Paris, and in Québec. We knew they were looking to do more in North America. We have a very successful smaller cluster, but we needed a publisher. For us, it was imperative that a company like Ubisoft come here."

Pupatello believes Ontario has a perfect lineup of companies across the sector in areas such as art, music and computer programming that are attracted by the region's skilled university graduates.

"These companies are telling us they are coming to Toronto because they want to stay home and get the skill sets we pay for," Pupatello says. "We are creating talented students for the sector. We want to level the playing field. There are lots of clusters around the globe, and companies know what each jurisdiction offers. Once you level the playing field, why wouldn't they pick Ontario? They have to go where there are qualified people, and we know we have that."

Pupatello says the digital media industry is tied to the film sector, and Ontario may have another advantage there with the information and communications technologies (ICT) sector that clusters around Toronto.

"A lot of ICT technology applicable in the film industry is now moving into gaming," she says. "There may be a boom yet to be generated by these companies. There's such an obvious synergy."

Starz Shines

Starz Animation has experienced rapid growth in Toronto over the past two years. The company has grown from 140 employees to 280 and has moved from working on one feature film to having three major projects in the pipeline.

"Being in Toronto gives us access to the city's great talent pool," says Jeff Young, CFO at Starz Animation. "For years, the college system here has delivered first-class animation talent. Since our arrival, we have seen a fantastic availability of talent who appreciate the opportunity to work in town on first-class, feature-level films. Heretofore, they would have had to go south of the border to work."

Young says Toronto also gives Starz access to some of the best software suppliers in the industry, which allows Starz to develop "leading-edge" technology and tools and create content at a high level, but at an affordable price.

"We've had fantastic support from the provincial and federal government with tax credits," Young says. "The Ontario Computer Animation and Special Effects Tax Credit enhances our overall worldwide competitiveness."

Expats and Generation Y

The Ontario government has targeted interactive media. Combined federal and provincial tax credits can cut the cost of $100 in R&D to less than $46. Earlier this year, Starz Animation also received just over $22.9 million in funding from another program, the Government of Ontario's Next Generation of Jobs Fund.

"The Next Generation Fund is an industrial strategy to make a very strategic investment in the digital media sector," Young says. "In making that investment, they are looking for a world-class anchor tenant committed to the Province of Ontario."

Starz established its Toronto base in 2006 when its parent company, Liberty Media, acquired IDT Entertainment, which Young describes as having roots as a much smaller mom-and-pop studio.

Young says Starz Animation's goals are to maintain employment at close to 300 and consistently feed the pipeline with new products such as the film "9," released on Sept. 9. All animation for the film was done in the Toronto studio.

"Animation really is the true combination of artistry meeting technology," Young says. "We look for individuals with a solid foundation in the discipline of animation who are well versed in technical skills and software capabilities. We are very fortunate to have great schools here. Our emergence as a leading animation studio has done a lot to attract expats who went to Los Angeles back to Canada and bring their toolsets from major studios such as Disney and DreamWorks."

Story in Pictures

Jeff YoungCFO for Starz, says Toronto offers the company superior pools of talent and suppliers.
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