New budget ends IDM tax credit for video game studios in Alberta, Canada

The 2019-23 budget revealed by Alberta’s United Conservative Party government this week eliminates the Interactive Digital Media Tax Credit, a program that aimed to encourage the growth of Alberta’s game industry through a refundable tax credit.

According to the Calgary Herald, the Interactive Digital Media Tax Credit is one of five business tax credits completely eliminated in the budget.

In that plan, the UCP suggests choosing to instead lower the corporate tax rate by 4 percent over the next several years will yield better results in job creation and economic growth than focused, industry-specific tax credits. 

Set up in 2018, the Interactive Digital Media Tax Credit offered game studios operating out of Alberta a 25 percent refundable tax credit for labor costs, along with an additional tax credit of up to 5 percent for teams that participated in an optional diversity and inclusion program. The goal of the short-lived program was to attract tech talent to Alberta and support growth in the province’s interactive digital media industry.