Wed, 19 Dec 2012

The Parti Quebecois is creating a more enticing environment for cloud-computing and data operations companies by offering attractive tax holidays, subsidized electricity, and other incentives. 

The province recently announced in the budget a 10-year corporate tax holiday on companies that invest more than $300-million in new data-centre or other large investment projects. Big data infrastructure often requires big investments. 

In a recent interview, Industrial Policy Minister Élaine Zakaïb mentioned that the province is open to lowering hydroelectricity rates for certain companies. A committee comprised of Premier Pauline Marois, Hydro-Quebec chief Thierry Vandal and Natural Resources Minister Martine Ouellet will examine potential rate cuts on a case-by-case basis. “We have the knowledge, climate, hydroelectricity and there is a huge demand for the infrastructure needed in cloud computing,” said Industrial Policy Minister Élaine Zakaïb in a recent interview. 

This is not the first time that the province has made it an attractive place for companies in chosen strategic areas to do business. Sixteen years ago the province successfully did the same thing for the video gaming and multimedia industry.

The industry was lured to Quebec with Multimedia Tax Credits and SR&ED Tax Credits. The refundable tax credit for multimedia firms represents 30% of eligible production work salaries, rising to 37.5% if the products are available in French. In 2011 the province allocated $117 million for the program, up 17 percent from the previous year and double what it gave four years ago. 

Montreal has attracted industry giants like Ubisoft Entertainment SA, THQ Inc., Funcom NV and Square Enix Holdings Co. Ubisoft pioneered the province’s gaming renaissance in 1997 by moving to Montreal. Now they employ more than 2,000 people in the company’s largest studio. In total, the entire Quebec sector employs over 8,000 employees with 50 companies publishing video games and 30 others creating supporting accessories. 

It is the province’s hope that they can replicate the effect on the video gaming industry on the big data industry. 

For more information on SR&ED Tax Credits visit the Fundica website.