The interactive media industry in Nova Scotia is pressing the provincial government to review the terms and duration of its current digital media tax credit, saying it is difficult to develop long-term strategies without knowing if the credit will exist in a few years.

The credit for developers of video games, interactive training videos and the like expired after a five-year stint at the end of 2012, and the government extended it for one year.

The industry expects that at the end of this year it will be extended for another year, forming a pattern of annual renewal. However, accountants and industry executives say it’s difficult to plan to grow a business without the assurance the credits will exist beyond the current year.

 “If you had a long-life project it would be of concern,” said one CFO. “You wouldn’t want to get a year into something and then realize your tax credit is gone.”

The digital media credit was introduced in 2007 as an incentive for companies that were active in neither film (which are eligible for the Nova Scotia film tax credit) nor in software development (which can apply to the federal government’s scientific research and experimental development program), but somewhere between the two segments.

It gives companies a credit worth 50 percent of the Nova Scotia labour used in a project, or 25 percent of the total cost of a project, whichever is lower. There is a larger credit for companies employing people outside the Halifax area.

Though most of the claimants have been in the video game industry, digital media or interactive media also includes such businesses as training material, e-learning, augmented reality and the like.

One contentious point about the credit is figuring out what companies are eligible for it. Last year, Stitch Media closed its Halifax office and moved to Toronto because it had failed to qualify for the credit, which it said cost the company about $100,000.

The Nova Scotia Supreme Court later ruled the provincial Finance Department failed to do its due diligence in disallowing the credit for the company.

People inside the industry said several companies and individuals have been holding informal talks with the government on the matter.

Spokesmen for the departments of Finance and Economic and Rural Development and Tourism declined to provide specifics on the future of the credit.

One referred to a news release issued last year that said the one-year extension would “allow the province to work with partners on how the credit can best serve the industry.”

One proposal that has been discussed among accountants is the possibility of extending the credit to a broader range of businesses but lower the overall rate on the credit. The goal is to support more companies without surrendering more government revenue.

The fear within the industry is that a provincial election could be called in the autumn, which means a resolution would be delayed until the election is over and may not happen until next year. All the discussions may have to begin anew if a new government is elected.