MONTREAL — Music service provider Stingray says its plans to more than double its size in Montreal within five years could be hampered by Quebec government support for video game companies.
Chief executive Eric Boyko said Friday that it is having trouble attracting talent because of provincial tax credits that have helped companies like Ubisoft and Warner Bros. to settle in Quebec over the past 20 years.
He said these companies use the tax credits, which Stingray is not eligible for, to help pay higher salaries to recruit coveted computer engineers.
“Twenty years ago, it was a good measure,” Boyko told reporters. “But today I do not agree. If we want to innovate, we need engineers and we do not get enough (from universities). “
Stingray (TSX:RAY.A) wants to increase its Montreal presence by hiring 400 people over the next five years and adding 30,000 square feet to its headquarters, which employs about 300 workers.
However, the lack of skilled labour could thwart the company which owns specialty channels such as Galaxie, Concert TV and Karaoke Channel.
For the first time since its start a decade ago, he said Stingray may have to extend the planned December launch of a new application because it is unable to fill 70 positions.
Martin Carrier, who led Canadian video game developer WB Games Montreal with about 600 workers until recently, said it was a “relevant and sensitive” subject.
“(Tax credits) created a special environment in which foreign companies came here to create jobs while adding strong competition to the labour market,” he said in an interview.
Carrier said government tax measures are not “the issue” but ways should be found to ensure local businesses aren’t disadvantaged.
“We want to avoid being a branch economy, but we also want foreign investment,” he said. “It’s a game of balance. “
Stingray, which saw its revenues top the $100-million mark for the first time for its financial year ended March 31, wants to reach between $200 million and $250 million of revenues in five years.
The company generates about half of its revenues outside Canada and hopes to increase that to 75 per cent by 2022.