Alberta has abandoned its plans to revive a tax credit targeted at video game developers, The Logic has learned.

Proposals for a new tax credit in the province were floated by Premier Danielle Smith in November 2022, but the idea has now been canned, officials have confirmed. “Instead of sector-specific tax credits, Alberta’s government has chosen to support the digital media gaming industry through strategic funding partnerships and investments,” said Jonathan Gauthier, press secretary for Alberta’s Innovation Minister Nate Glubish.

Premier Danielle Smith’s 2022 technology and innovation mandate directed Glubish to develop a tax credit proposal for video games and multimedia that would help keep the province competitive with the larger development scenes in Quebec, Ontario and British Columbia.

At the time, Ontario was offering a tax credit of up to 40 per cent for game development, while Quebec was offering up to 37.5 per cent, and B.C. topped out at 17.5 per cent. B.C. plans to expand its tax credit to 25 per cent beginning in September.

Gauthier said strategic partnerships are “the most effective and sustainable” way to support game development in Alberta. As examples of the government’s strategy, he pointed to Alberta Innovates partnering with B.C.-based Shred Capital and the Alberta Enterprise Corporation backing Seattle’s Flying Fish Ventures as the two firms invest in Alberta-based companies.

Alberta’s NDP government introduced a digital media tax credit of 25 per cent in 2018. The United Conservative Party ended the credit after taking power in 2019. For the year it existed, major new studios were founded in Calgary and Edmonton, with New World Interactive opening an office in the former and Improbable in the latter. 

In reports prepared for the Entertainment Software Association of Canada, consulting firm Nordicity put Alberta’s game development workforce at 1,310 full-time employees during the year the tax credit was in place. Last year, the firm reported that number had dropped to 810.