The Canadian province of Ontario has increased its tax credit budget for 2009, in an attempt to increase its attractiveness to video games companies. Canada in general already has one of the most significant systems of tax credits for interactive entertainment companies in the world, with major publishers such as Electronic Arts and Ubisoft already taking advantage of the benefits. The Ontario Media Development Corporation (OMDC) claims that the province has the third-largest entertainment and creative sector in North America -- after only California and New York. The OMDC encourages film and television production in the region, as well as book and magazine publishing, sound recording, and video game development. The province’s new budget proposes around $100 million annually in additional tax relief, and investments of around $30 million to support the entertainment industries. The Ontario Interactive Digital Media Tax Credit (OIDMTC) currently offers a 30 percent refundable tax credit to small corporations working in the region and a 25 percent tax credit to larger corporations. This is set to increase to 40 percent and 35 percent, respectively. Additional incentives include allowing corporations to claim 100 percent of the amount paid to “arm’s-length contractors” that is attributable to the salaries and wages of the contractor’s employees. Currently only 50 percent can be claimed. Finally, the OIDMTC will be extended to developers that incur a minimum $1 million of labor expenditures over a 36-month period, for fee-for-service work done in Ontario. Qualifying corporations would not be required to be at arm’s length with the purchaser corporation, or to develop all, or substantially all, of the eligible product. “These changes will be significant in allowing OMDC to continue to provide critical services to the cultural media industries and we join our stakeholders in thanking the provincial government for recognizing the economic impact of these key sectors, and for committing to these important investments,” said OMDC president and CEO Karen Thorne-Stone, in discussing the new OMDC budget as a whole.