Hollywood North
Issue: Volume: 31 Issue: 7 (July 2008)

Hollywood North

Since winning their last World Series in 1993, it’s been a slow and steady decline for the Toronto Blue Jays, and with the Toronto Maple Leafs—or “Laughs,” as some Torontonians would say—still searching for their first Stanley Cup in more than 40 years, the beloved Canadian team has taken its cursed place as the Boston Red Sox of hockey (well, at least prior to 2004). But if the Ontario government has its way, the citizens of Ontario may have a new team to cheer for—its ever-growing digital content creation community. That’s because the newly established Ontario Media Development Corporation (OMDC), an agency of the Ministry of Culture, has set its sights on world domination in the computer animation industry. The Ministry is open about its ambitious battle plan, and is giving game developers and effects houses powerful financial incentives to set up shop in the province.

Having long ago earned the moniker Hollywood North, Ontario’s thriving film production industry has helmed some of the biggest productions in recent history, including last year’s Hairspray and the 2003 Oscar winner for Best Picture, Chicago. Several months back, The Hulk wrapped shooting at the Toronto Film Studios. Walking across the studio lot, the names that have graced the doors are impressive indeed: Ed Norton, William Hurt, and legendary producers Walter F. Parkes and Gale Anne Hurd. Unfortunately, while practical photography of these large-scale productions occurs frequently in Toronto, the visual effects work usually is delegated to heavyweight vendors down south, such as ILM or Sony Pictures Imageworks.

The irony of this is that some of the talent at these houses came from Ontario, where they were educated at its world-renowned animation schools, including Sheridan College in Oakville (alma mater of Steve “Spaz” Williams, former lead animator at ILM and director of Disney and CORE Digital Pictures’ The Wild) and Seneca College, whose students helped animator Chris Landreth with his Oscar-winning short Ryan. In addition, Rob Coleman, ILM’s animation team lead for the Star Wars prequel trilogy, is also Ontario born and educated.

Not only is Ontario a breeding ground for animators, but is a hotbed for software development experts, as well. Autodesk and Side Effects, both headquartered in Toronto, routinely scout for technical wizards from the acclaimed Computer Science programs at the University of Toronto and the University of Waterloo. Unfortunately, in the past, most of these graduates have joined Ontario’s rich talent pool of film and game talent that’s been siphoned by companies abroad, in the US, or even to other Canadian institutions, such as Electronic Arts in Vancouver and Ubisoft in Quebec.

Canadian studios have been churning out hit projects, such as Every-one's Hero (opposite page) and This is Emily Yeung (left).

Needless to say, the OMDC is determined to stop the brain drain through direct funding of digital content creation and the administration of a variety of generous tax credits. And by early accounts, the handouts are working. Premier developers, such as Capcom and Koei, have recently chosen to open North American offices in Ontario. Meanwhile, last September, US entertainment conglomerate Starz Media—which includes Film Roman (The Simpsons, King of the Hill) and Anchor Bay Entertainment—opened its state-of-the-art animation studio in Toronto. One of Canada’s largest studios with more than 150 employees, Starz is now hard at work on the Tim Burton-produced animated feature 9, based on the award-winning short by Shane Acker (see “Short and Sweet,” February 2006).

In the past, Ontario would lose a lot of its talent to studios in California, but what we’re seeing now is a steady repatriation of that talent,” says Starz executive vice president David Steinberg. Also thriving on the generous funding and tax credits of the OMDC are homegrown companies like Silicon Knights (developers of Metal Gear Solid and the upcoming Nordic-themed next-gen title Too Human for publisher Microsoft), Artech Studios, and Marblemedia, which makes the hugely successful preschool series This is Daniel Cook and This is Emily Yeung.

“Without the Ontario government’s financial support, especially on the development side, we would never have achieved the level of success we have now,” points out Mark Bishop, president of Marblemedia. Marblemedia exports the two series across multiple platforms, including television and the Web. Another huge Ontario success story has been Groove Media, which allows players to download retail-quality skill games, such as uTour Golf, and play online against competitors for fun or real money.

The Programs
So what is Ontario offering? Well, for starters, several funding programs for video game developers. The OMDC Video Game Prototype Initiative provides as much as $500,000 to help developers create a prototype for a market-ready game—an incredibly risky undertaking since such “prototypes” are created under speculation of a sale to a publisher. The OMDC Interactive Digital Media Fund provides up to $100,000 to create an interactive digital media content project, such as a Web, console, or casual game. The OMDC Export Fund offers $10,000 to qualifying companies to fund business development trips and participate in major industry events, such as GDC, DICE, or the Tokyo Game Show.

Furthermore, the Entertainment and Creative Cluster Partnership Fund supports strategic partnerships that forge fresh solutions to the needs of the industry. Application deadlines for each program can be found at www.omdc.on.ca.

CORE Digital Pictures has crafted the cartoon Chop Sockey Chooks, a co-production between Decode Entertainment and Aardman Animations.

In addition to the funding programs, the OMDC also sweetens the digital pot with six tax credits. The Ontario Interactive Digital Media Tax Credit refunds 30 percent of the costs of labor, marketing, and distribution for games created in Ontario—without any per-project or annual corporate limit on the amount that can be claimed. On top of that credit, The Ontario Computer Animation and Special Effects Tax Credit will refund 20 percent of the labor costs for computer animation and special effects work incurred by foreign producers on local CG productions. The Sound Recording Tax Credit refunds 20 percent of production and marketing costs of sound recording.

And that’s not all: If a developer works with an Ontario university or college—such as Sheridan or Seneca College—in the making of a game, it’s eligible for another 20 percent tax credit. The government also encourages developers to hire, train, and evaluate Ontario’s animation students by providing cash-back incentives or tax refunds for student salaries. In addition, the combined federal and provincial tax incentives could cut the costs of $100 in R&D to less than $44. Through the Ontario Innovation Tax Credit program, software and hardware developers such as Autodesk, Side Effects Software, and AMD are all eligible for a 10 percent tax credit for the cost of R&D for their yearly software updates.
The only drawback to Ontario right now may be the surging Canadian dollar, which recently touched parity with the American greenback, then roared past it. Regardless, Starz Entertainment CEO Robert Clasen remains bullish about Ontario as he cut the ribbon on a 45,000-square-foot Toronto studio. “If you’re going to do CGI, the dollar has no bearing. Toronto is where the talent pool is,” he says, pointing to such famous animation schools as Sheridan College and the Ontario College of Arts.

Leveraged by the benefits of the Ontario Computer Animation and Special Effects tax credit, Clasen anticipates that the facility will grow from about 150 animators to 300 by 2009. In addition, Steinberg notes that the proximity to Autodesk allows Starz animators to write their own proprietary software code for significant cost savings. Starz has already spent about $150 million on animation production in Toronto. Completed CG features include Universal’s The Pirates Who Don’t Do Anything and Fox’s Everyone’s Hero.

Building for the Future
Already the third largest television, film, and digital media cluster in North America, Ontario’s digital media industry generates more than $1 billion in annual revenue. Nevertheless, the province is hell-bent on ruling the future of both the film and game industry by investing in new, state-of-the-art production facilities. The crown jewel in this plan is FilmPort, a new studio complex being developed in partnership with Pinewood Studios in London and film director Ridley Scott. Scheduled to open in 2010, FilmPort will offer 550,000 square feet of film, television, and game production facilities, including 14 state-of-the-art soundstages, one of which will be 45,000 square feet—making it the largest soundstage in North America.

To support the growing need for motion capture in game cinematics and real-time play, Toronto’s Seneca College, in partnership with Fast Motion Studios, recently opened a new state-of-the-art facility encompassing 8000 square feet, with a capture studio occupying 2500 square feet. With a 20-camera Vicon system reaching two stories high and capable of single and multiple body and facial capture, it is the largest independent mocap studio in eastern Canada, and can easily accommodate Crouching Tiger, Hidden Dragon-style wire work.

Unfortunately, thus far, beating out industry giants such as ILM or Imageworks as the primary effects vendor for a major blockbuster such as The Hulk (see “Heavy-Handed,” pg. 18) has been an elusive goal for Ontario effects houses, although one of Toronto’s biggest and best houses, CORE Digital Pictures, single-handedly produced The Wild, a visually stunning film that was unfortunately hurt critically and commercially by parallel development with DreamWorks’ Madagascar. CORE also delivered stunning CG animation for Guillermo del Toro’s Blade II and, most recently, for Showtime’s The Tudors.

According to CORE managing director Ron Esty, the key to competing with giants like ILM and WETA is to consolidate and coordinate the resources of the various boutique effects across Ontario to deliver large-scale effects. That’s precisely the goal of a newly formed association called the Computer Animation Studios of Ontario. “Those two developments could have a profound effect on the digital animation industry in Toronto,” says Esty. 

Animation has been part of the cultural fabric of Ontario since the inception of the Canadian National Film Board, and this identity has been woven into the province’s many colleges and universities through a variety of animation, game development, and computer-science programs. While the University of Toronto and the University of Waterloo churn out some of the top computer scientists in the world, students at Algoma University College in St. Sault Marie can get a master’s level degree in computer games technology. The program, developed by the University of Abertay Dundee in Scotland in 1997, runs for three semesters over 12 months.

Students also flock to Seneca College’s Animation Arts Center and most famously to Sheridan College in Oakville. Called the best in animation training by DreamWorks CEO Jeffrey Katzenberg, Sheridan was also cited by Jack Lew, director of International University Outreach at Electronic Arts, as EA’s number one choice when looking for the next crop of game designers. Sheridan Spark, Oakville’s digital media incubator, supports aspiring developers and digital media content producers with a variety of digital media products and services.

Walking through Sheridan’s 80,000-square-foot facility, meeting the staff and students—potentially the best in the next generation of animators—I ask what skills recruiters from the big studios are looking for in a prospective animator. Almost unanimously, I am told that the big companies are looking for storytelling ability. “They want a student who can produce the next big idea,” says Michael Collins, Dean of School of Animation. Acting and drawing ability are obviously indispensable, which Sheridan emphasizes. However, many students I spoke to also cited the Internet as still an important part of their education.

As one fourth-year animation student told me: “For networking, career services, and developing classical animation skills, Sheridan and Ontario have been incredible. But I cannot overemphasize the importance of the ’Net in the learning process. Sites like http://www.animationmentor.com (run by former Pixar animators) have been an essential part of my education, as well.” In my random survey of the students, other sites paving the way for aspiring animators include gnomon3d.com and highend3d.com.

Immigration and Health care
Besides access to one of the best technical and artistic talent pools in the world, Ontario offers relocating companies half the health-care costs of the US (thanks to a publicly funded health-care system); payroll taxes that are 40 to 60 percent lower than in the US; and salaries for 3D animators that are approximately $10,000 less than their average American counterpart in New York or California.

Canada’s immigration policies also help streamline the transplantation of a large foreign work force to Ontario. “Transferring key staff from Japan proved to be easy,” says Hidenori Taniguichi, senior vice president of worldwide game developer Koei. For Koei, Ontario’s strategic location in the heart of the North American market (just hours from Boston and New York), as well as its easy access to the European markets, proved to be other strong lures. Capcom president Midori Yuasa concurs. “Toronto is the center for the North American industry; it gives us access to a seemingly endless supply of talented, entertainment-savvy people, thanks to its colleges and universities,” he says. “Ontario also offers low business costs, exceptional R&D tax credits that you can’t find anywhere else in the world, and helpful economic development people to facilitate all aspects of business startup.”

The crew at Starz recently finished work on the 3D animated Veggie Tales movie The Pirates Who Don't Do Anything.

Several provisions in Canada’s immigration program can expedite the relocation of qualified talent. Work permits from the Information Technology Workers allow qualifying applicants in seven software developer occupations to work in Canada on a temporary basis. Company staff, including managers and employees with specialized knowledge, may transfer to Canada under the Intra-company Work Permit category. Meanwhile, Canada’s Skilled Worker immigration category selects permanent residents based on a point system using selection criteria including education, experience, and language ability. Highly skilled digital media workers generally do well under this system. A job offer from a Canadian employer is not mandatory, but it can positively contribute to an application.

Moreover, unlike in the US, once a skilled worker arrives in Canada on a work permit, the person not only receives health-care coverage, but the worker’s residency is not tied to his or her job, which means that if the person loses the job before the length of the permit expires, he or she is not deported. Rather, the person is allowed to remain in the country, seek employment, and, if successful, apply for permanent residency. 

The Great White North
Also thriving in Ontario’s new developer-friendly climate is Tira Wireless, maker of a widely used porting technology for transferring software and games (such as EA’s NHL hockey titles) across myriad operating systems of mobile phone carriers. The company’s clients include Disney Mobile, Sega Mobile, Sony Pictures Mobile, Warner Brothers, and Capcom. Tony de Lama, Tira’s senior vice president of product management, emphasizes Ontario’s strong venture capital community as a critical component in the firm’s success.

Symbols of his own company’s success adorn the office of Silicon Knights’ vice president Rob DePetris. On one wall hangs a congratulatory letter from Metal Gear creator Hideo Kojima for the Metal Gear Solid games; on his desk sits a Master Chief helmet signed by the entire crew of Bungie after a favorable viewing of an early build of Too Human; and on another wall hangs a work of art; below it, his degrees from Ontario’s Brock University; and below that, two samurai swords. “Those are the three keys to success: art, education, and warfare,” he says.

As I’m led through the halls of Starz Animation by Steinberg (a former Disney producer whose credits include Meet the Robinsons, Mulan, and Hercules), I ask him how such a massive studio sprung up so suddenly on the industry landscape. “Actually, Starz began after purchasing a small studio in Toronto called DKP Effects, founded by Dan Krech in 1985,” he says.
“Oh, my God,” I respond in shock. “DKP was the first effects house I interviewed as a journalist covering the DCC industry way back in 2001.”

At the time, DKP was a comparatively tiny outfit doing digital cars for Ford and working on the short-lived digitally animated TV Series Game Over. It’s hard to believe what’s become of such a tiny studio, transformed almost overnight into a feature animation powerhouse with a seemingly endless sprawl of animators hard at work—with Tim Burton, no less, peering over their shoulders as they animate to the voices of Martin Landau, John C. Reilly, Jennifer Connelly, and Elijah Wood.

My, how times are changing in Ontario. 

Martin McEachern is an award-winning writer and contributing editor for Computer Graphics World. He can be reached at martin@globility.com.