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| title | collection | path | parentDocument | outlineId | createdBy |
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| Ontario Funding Landscape | Resources | Resources/Central (Ontario) Hub/Ontario Funding Landscape | Central (Ontario) Hub | eba4ff2c-fe24-43dd-be92-bacaffb6e308 | Jennie R.F. |
This article covers Ontario-specific funding, tax credits, and incentives for cooperative game studios.
:::warning If you're incorporating as a co-op and want to access any of these programs, one thing matters above all else: incorporate as for-profit. Non-profits are ineligible for everything in this article!
:::
- For help deciding which type of co-op to incorporate, see Co-op types for Ontario game studios
- For the incorporation process itself, see How to incorporate a co-op in Ontario
- For co-op support organizations and communities, see Ontario co-op resources and support
OIDMTC: The biggie
The Ontario Interactive Digital Media Tax Credit is the most valuable incentive for Ontario game studios. It's a refundable tax credit of 40% on eligible Ontario labour expenditures for studios that develop and self-publish their own games (called "non-specified products"), plus up to $100,000 in marketing and distribution expenditures per product. Fee-for-service work earns a 35% credit. There is no annual cap on eligible labour expenditures.
The credit is administered through Ontario Creates (which issues a certificate of eligibility) and the CRA (which processes the credit on the T2 corporate tax return via Schedule 560). Studios must apply within 18 months of the tax year in which a product was completed. Administration fee is 0.15% of eligible expenditures ($1,000-$10,000).
Studios can also claim retroactively up to 3 years from the end of the fiscal year. If you've been developing and didn't know about this, go back and look!
The four streams
The OIDMTC is not just one program. It is broken up into four "streams" for different types of development scenarios. The stream you fall into determines your credit rate, whether you need a finished product, and whether the 80/25 rule applies.
Non-specified (own IP, self-published) is the 40% stream. Requires the 80/25 rule (see below), a completed product, and a revenue stream.
This is where co-ops developing their own games will fit. If you made the game, own it, and you're selling or licensing it to the public yourself (or through a distributor you chose), and nobody paid you upfront to make it—this is you. The government uses the term "non-specified" to mean it wasn't made under contract for someone else
The game must be completed, and you must have an avenue for generating revenue. (So you can't claim for a game you're giving away entirely for free.) You can also claim up to $100,000 in marketing and distribution expenses per product, which none of the other streams allow.
Specified (fee-for-service) is at 35%. Requires the 80/25 rule, an arm's-length purchaser, and a completed product.
If someone else, say a publisher or another studio, contracted or commissioned you to create a game (or part of a game), and they (not you) will sell it—this is where you claim this credit. The product must be completed, and you must meet the 80/25 rule.
If your co-op is doing contract work for other studios while you work on your own game, the contract work goes under specified and your own game goes under non-specified.
Qualifying digital game corporation is also 35%. Requires minimum $1M in Ontario labour over 36 months for work doing substantial fee-for-service game development. The product doesn't need to be completed.
This credit is out of reach for most small co-ops due to the large threshold, but if you do grow to this size, the advantage here is that your game does not need to be completed and the 80/25 rule does not apply.
Specialized digital game corporation is 35%. Requires minimum $500K Ontario labour per year, with 80%+ of payroll or 90%+ of revenue from games. This stream requires annual filing.
This might be your destination, if you're aiming to grow your co-op!
Most co-op studios starting out will be aiming for the non-specified (own IP) or specified (contract work) streams; remember, you can claim both in the same tax year for different games.
The 80/25 rule
The make-or-break threshold for small studios.
80% of total development labour must be performed in Ontario. 25% must be paid as wages to employees of the claiming corporation - not contractors. That second requirement matters a lot for co-ops. Worker-members must be on payroll receiving T4 slips to count toward the 25% employee test. If a co-op treats its members primarily as independent contractors, it will fail this threshold.
Can a co-op claim the OIDMTC?
Yes, in principle. The legislation requires the claimant to be a "Canadian corporation." A co-operative incorporated under the Ontario Co-operative Corporations Act is a legally recognized corporate entity that files T2 returns. The key requirement is that the co-op must not be tax-exempt. A for-profit worker co-op engaged in commercial game development is not tax-exempt and should qualify.
But no explicit guidance on cooperative corporations appears anywhere in the OIDMTC guidelines. (Sigh.) Studios need to resolve this before their first application. Get written confirmation from Ontario Creates and a tax professional. Don't assume!
If your studio is structured as a non-profit cooperative, it could be considered tax-exempt, which would disqualify it from the OIDMTC entirely. Again: for-profit incorporation is the prerequisite for everything on this page.
Common mistakes
Incorrect completion dates (must be the date the product is available for sale, not launch date). Submitting separate applications per product instead of one per tax year. Poor product descriptions. Failing the 80/25 rule through excessive out-of-province contracting. Missing the 18-month filing deadline. Start tracking expenditures, timesheets, and contractor agreements from day one of development. Start now!!
Stacking credits
Okay. Don't just pick one credit and stop. Different credits programs cover different types of work, so you can "stack" them and get back a significant portion of your costs. It requires some intentional planning, and ideally, the support of an experienced tax professional.
SR&ED
Studios can claim OIDMTC and SR&ED (Scientific Research and Experimental Development) credits in the same year, but cannot claim the same labour expenditures under both programs. Allocate experimental R&D work to SR&ED, regular game production work to OIDMTC.
Experimental R&D means work that addresses "technological uncertainty" through systematic investigation - like custom tools solving longstanding problems. This is not for regular game design, art, animation, sound, UX, and testing.
SR&ED provides a 35% refundable credit for Canadian-controlled private corporation (CCPC) on the first $6 million in qualifying expenditures. A worker co-op controlled by Canadian individuals would likely qualify as a CCPC, enabling the enhanced rate. Now includes capital expenditures for equipment.
SR&ED credits are not considered "government assistance" that would reduce OIDMTC eligible expenditures - claiming SR&ED doesn't shrink your OIDMTC. (The reverse isn't true: the OIDMTC is considered government assistance that reduces the SR&ED expenditure base, so do the math carefully. 😵💫)
Studios should also claim the Ontario Innovation Tax Credit (OITC), which provides an additional 10% refundable credit on SR&ED expenditures in Ontario.
NRC IRAP
NRC IRAP provides non-repayable grants for innovative R&D projects with clear milestones. Unlike SR&ED (which covers broader annual activities), IRAP focuses on specific projects.
You must be able to cover 20% of wage costs and 50% of contractor costs. You can claim IRAP on a subset of your work, then claim tax credits on everything else.
Important: IRAP requires pre-approval before the project starts. Cannot be claimed retroactively. Not all work qualifies - it needs to be truly innovative, risky R&D. You also need to build a real relationship with your assigned Industrial Technology Advisor.
CMF Experimental Stream
The Canada Media Fund Experimental Stream offers development funding up to $15,000, production funding up to $250,000, and marketing funding up to $30,000. Use CMF for production costs (voice acting, music licensing, marketing, equipment rental) while OIDMTC/SR&ED cover internal labour.
Applicants must have Canadian ownership, control, and key personnel; the project must be innovative and experimental with cultural or educational value; and you need a public distribution plan with a digital distributor and a detailed project plan and budget.
Putting it together
A small co-op studio with $300,000 in Ontario labour could split $100K to SR&ED and $200K to OIDMTC, yielding combined credits of approximately $115,000 - an effective return of 38.3%. Layer IRAP on a specific innovative project within that. Use CMF for non-labour production costs. These programs aren't redundant; they cover different slices of the same work.
Ontario Creates funding programs
As of January 2025, the former Interactive Digital Media (IDM) Fund was replaced by the IP Fund (Intellectual Property Fund), which merges the old Film Fund and IDM Fund into a single program.
Futures Forward: the entry point
Futures Forward is where many new studios start. Up to $20,000 (or 75% of eligible costs) as a non-repayable grant, co-funded by CMF and Ontario Creates. Designed for for-profit companies that don't yet meet IP Fund requirements, like studios led by people with fewer than three years of professional IDM experience.
You must complete an approved training workshop before applying. These are delivered through Interactive Ontario, Hand Eye Society, or other partners. Hand Eye Society's Futures Forward business training program (now in its 8th year) requires a $20/month HES membership and a $100 refundable deposit.
The deadline typically falls in late fall.
A for-profit cooperative corporation should qualify, but confirm with Ontario Creates (ipfund@ontariocreates.ca) before applying.
IP Fund - Interactive Content Stream
The main production funding. Pre-production grants range from $15,000 to $50,000; production grants from $50,000 up to $250,000-$500,000 depending on track record. The fund acts as "last-in" participant, meaning all other financing must be committed at time of application. You need at least one owner or employee with minimum 3 years of IDM experience, must own at least 51% of the copyright, and must spend at least 75% of the budget on Ontario expenses.
Next deadlines: April 13, 2026 and September 14, 2026.
Global Market Development
Up to $15,000 (50% of costs) for international market development - trade shows like GDC, Gamescom, Tokyo Game Show. Requires released products. More relevant once your game is for sale.
Industry Development Program
The IDP funds incorporated not-for-profit trade and event organizations, not individual studios. Organizations (like Baby Ghosts!) use it to fund sector-wide programming.
The on-ramp
The practical path for a new co-op studio:
- complete Futures Forward training
- apply for the Futures Forward grant ($20K)
- build a prototype
- apply for IP Fund Pre-Production ($15K-$50K)
- progress to IP Fund Production ($50K-$500K)
- access Global Market Development for export
Claim OIDMTC throughout!!
IP Fund Interactive Content Stream • Futures Forward • Program Policies
Arts council funding
Ontario Arts Council
OAC funds individual artists and arts organizations. Less directly relevant to incorporated game studios, but individual creators doing interactive or media arts work should look at their programs.
Toronto Arts Council
TAC's Media Artists Program: Creation grants go up to $15,000 for individual media artists, and the eligible categories include electronic games, virtual and augmented reality, and new media artworks. The Visual/Media Arts Projects grants provide up to $15,000 for non-profit organizations and collectives. An Accessibility Grant Add-on provides an additional $5,000 for projects involving Deaf or disabled artists.
Co-op–specific funding
The co-op sector has its own funding tools that layer on top of everything above. The three most relevant to a game studio in its first few years:
- CWCF Technical Assistance Grants cover up to $4,000 for hiring co-op developers, lawyers, and consultants during startup. This is the single most important tool for offsetting incorporation costs.
- The Tenacity Works Loan Fund provides $15,000-$50,000 in 5-year term loans for worker co-ops that need startup or growth financing.
- The Common Good Capital Program lets co-op members place membership shares in self-directed RRSPs and TFSAs, creating a personal tax advantage while capitalizing the co-op.
For growth-stage co-ops, the Canadian Co-operative Investment Fund provides $50,000 to $1.25 million in loans, equity, and quasi-equity. There is a $1,000 application fee to cover their due diligence process.
For the full picture of co-op support organizations, development resources, and game-studio-specific communities, see Ontario co-op resources and support.
The GTA ecosystem
Toronto has a lot of organizations and programs relevant to game studios, and they overlap in useful ways.
- Interactive Ontario is the industry association for Ontario's IDM sector. They offer a members-only funding database, the Indie Superboost program, the Torchbearer Program for early-stage companies, the Black Talent Pipeline, and partnership delivery of Futures Forward training.
- Hand Eye Society runs the annual Super FESTival indie game festival and delivers the Futures Forward business training that feeds directly into Ontario Creates IP Fund eligibility.
- Dirty Rectangles runs monthly show-and-tell style meetups in the Junction.
- Toronto Games Week is a collective coordination of events organized independently by dozens of organizations, curators, companies, creators, and communities every year in June.
- The City of Toronto offers Creative Industries Funding including Sector Development Grants of $2,500-$15,000 for capacity-building and business development, open to both non-profits and for-profit businesses. In June 2025, Toronto proclaimed June as Video Game Month. Toronto also holds UNESCO Creative City of Media Arts designation.
- IGDA Toronto has an active Discord and regular networking events. The annual XP Game Summit is Canada's main B2B game conference, with indie pitch competitions and publisher matchmaking.
The co-op tax advantage
Under Section 135 of the Income Tax Act, cooperatives may deduct patronage dividends paid to members from taxable income. For a worker co-op that distributes its surplus to members based on hours worked, this can reduce corporate-level taxation to near zero. Members then report patronage dividends as personal income.
Combined with the Ontario Small Business Deduction, effective taxation for co-op game studios can be very low. Patronage dividends are not subject to CPP or EI payroll deductions - they're treated more like dividends than wages.
There are no Ontario-specific tax exemptions exclusively for cooperatives. The patronage dividend deduction is a federal mechanism. What Ontario offers co-ops is the OIDMTC's ✨generosity✨ and the general business environment, not co-op-specific tax treatment.
One minor Ontario-specific quirk: The province does not implement the federal investment income restriction on the provincial business limit, meaning a co-op with some investment income retains its full Ontario Small Business Deduction.
What Ontario co-ops should actually do!
Most of this should happen before or during your first year of development.
#1 - Incorporate as for-profit under the Co-operative Corporations Act
This is the prerequisite for everything else on this page. Non-profit co-ops are locked out of the OIDMTC, Ontario Creates funding, and most of the incentives described here.
#2 Put worker-members on payroll
They must be employees receiving T4 slips, not independent contractors. Essential for the OIDMTC's 25% employee test. Structure worker-members as both employees (in their capacity as workers) and owners (in their capacity as members). That dual-status approach satisfies the ESA, WSIB, CRA, and the OIDMTC.
#3 Track every expense from day one
Timesheets, contractor agreements, receipts, labour allocation. You cannot claim credits retroactively without documentation. Start now!
#4 Separate SR&ED-eligible experimental work
If any of your development involves real technological uncertainty - custom tools, techniques that don't have known solutions - document it separately from the start. You'll need this separation to stack credits properly.
#5 Contact Ontario Creates early
Confirm your eligibility well before applying for anything. Email ipfund@ontariocreates.ca and don't forget to ask specifically about cooperative corporations.
#6 Do Futures Forward training
If anyone on your team has fewer than 3 years of IDM experience, this unlocks Ontario Creates funding and is free through Hand Eye Society.
#7 Join the OCA and CWCF
OCA for Ontario-specific co-op support and the CCA guide; CWCF for Technical Assistance Grants, the Tenacity Works loan fund, and the Common Good Capital Program.
#8 Register for WSIB
Mandatory once worker-members are on payroll. Executive officers (president, secretary, treasurer) are exempt from premiums but can apply for optional coverage.
#9 Bank with a credit union
Try FirstOntario's CreativeArts division, Alterna Savings, Meridian, or DUCA. The big banks will be confused by your share structure.
#10 Get a tax professional who understands both co-ops and the OIDMTC
Not optional! The intersection of cooperative tax treatment and digital media credits is niche, and mistakes are expensive. Ask Baby Ghosts, CWCF, or OCA for referrals.