Eligible product
 34. (1) In this section, “interactive digital media product” means a combination of one or more application files and one or more data files, all in a digital format, that are integrated and are intended to be operated together and that have the following characteristics when they are being operated: 1. If a qualifying labour expenditure is incurred in respect of the product before April 24, 2015, their primary purpose is to educate, inform or entertain the user. 1.1 If a qualifying labour expenditure is incurred in respect of the product on or after April 24, 2015 but not before that date, their primary purpose is to entertain the user or to educate users who are under 12 years of age. 2. They achieve their primary purpose by presenting information in at least two of the following forms: i. text, ii. sound, iii. images. 3. They are intended to be used by individuals. 4. By interacting with them, the user can choose what information is to be presented and the form and sequence in which it is to be presented. O. Reg. 37/09, s. 34 (1); O. Reg. 77/17, s. 5 (1). (2) For the purposes of this section, a combination of application files and data files developed primarily for use as system software is not an interactive digital media product. O. Reg. 37/09, s. 34 (2). (3) A product that is not a specified product is an eligible product for the purposes of section 93 of the Act if the following conditions are satisfied: 1. The product is an interactive digital media product. 2. If the product was completed before May 12, 2005, i. all or substantially all of the product was developed in Ontario by the qualifying corporation or by the qualifying corporation and a qualifying predecessor corporation, and ii. the product was developed for commercial exploitation by the qualifying corporation or by the qualifying corporation and a qualifying predecessor corporation. 3. If the product is completed after May 11, 2005 and if, before April 24, 2015, the Ontario Media Development Corporation issued a certificate under subsection 93 (10) of the Act to the qualifying corporation in respect of the product, or sent a letter to notify the qualifying corporation that the product does not qualify for certification, i. all or substantially all of the product was developed in Ontario by the qualifying corporation or by the qualifying corporation and a qualifying predecessor corporation, and ii.  the product was developed for sale or licensing by the qualifying corporation to one or more persons dealing at arm’s length with the qualifying corporation who have not previously entered into an arrangement with the qualifying corporation or a qualifying predecessor corporation for the development of the product. 3.1 If the product is completed after May 11, 2005 and if, on or after April 24, 2015 but not before, the Ontario Media Development Corporation issued a certificate under subsection 93 (10) of the Act to the qualifying corporation in respect of the product, or sent a letter to notify the qualifying corporation that the product does not qualify for certification, i.  the product was developed for sale or licensing by the qualifying corporation to one or more persons dealing at arm’s length with the qualifying corporation who have not previously entered into an arrangement with the qualifying corporation or a qualifying predecessor corporation for the development of the product, ii. the qualifying corporation’s Ontario labour ratio in respect of the product is equal to or greater than 0.8, and iii. if the qualifying corporation applied under subsection 93 (8) of the Act for certification of the product on or after April 24, 2015, the qualifying corporation’s Ontario wage ratio in respect of the product is equal to or greater than 0.25. 4. The product is not used primarily for interpersonal communication. 5. The product is not used primarily to present or promote the qualifying corporation or a qualifying predecessor corporation. 6. The product is not used primarily to present, promote or sell the products or services of the qualifying corporation or of a qualifying predecessor corporation. O. Reg. 37/09, s. 34 (3); O. Reg. 77/17, s. 5 (2). (4) The following are the conditions referred to in paragraph 1 of subsection 93 (15) of the Act with respect to a specified product: 1. The product is an interactive digital media product. 2. The product is not used primarily for interpersonal communication. 3. Development of the product was started by a qualifying corporation or a qualifying predecessor corporation and completed by the qualifying corporation in Ontario. 4. The product is not used primarily to present or promote the qualifying corporation, a qualifying predecessor corporation or the purchaser referred to in paragraphs 2 and 3 of subsection 93 (15) of the Act. 5. The product is not used primarily to present, promote or sell the products or services of the qualifying corporation, a qualifying predecessor corporation or the purchaser referred to in paragraphs 2 and 3 of subsection 93 (15) of the Act. 6. If, on or after April 24, 2015 but not before, the Ontario Media Development Corporation issued a certificate under subsection 93 (10) of the Act in respect of the product, or sent a letter to notify the qualifying corporation that the product does not qualify for certification, i. the qualifying corporation’s Ontario labour ratio in respect of the product is equal to or greater than 0.8, and ii. if the qualifying corporation applied under subsection 93 (8) of the Act for certification of the product on or after April 24, 2015, the qualifying corporation’s Ontario wage ratio in respect of the product is equal to or greater than 0.25. O. Reg. 37/09, s. 34 (4); O. Reg. 77/17, s. 5 (3). (5) If a qualifying labour expenditure was incurred in respect of a product on or after April 24, 2015 but not before that date, the following are additional conditions prescribed for the purposes of clause (a) of the definition of “eligible product” in subsection 93 (14) of the Act and for the purposes of subsection 93 (15) of the Act: 1. The product does not provide any content that is, i. news, current events or public affairs programming, ii. opinion, commentary or advice, or iii. weather or market reports. 2. The product is not produced primarily for industrial, corporate or institutional purposes, including vocational training products or products that educate or inform employees. 3. The product is not primarily a reference material or the product is not designed to be used primarily for finding information, such as a guide for equipment or software, a dictionary or a map. 4. The product does not primarily aggregate content from various internet sources. 5. The product is not used primarily to filter and organize specific content from the internet. 6. The product is not a search engine. 7. The product is not a blog. 8. The product is not primarily a database, including a real estate database or recipe database. 9. The product is not a website, except a website that primarily hosts any of the following: i. One or more digital games. ii. Content that is related to a film, television or internet production described in subsection (6), A. if the content is hosted under a licence agreement in respect of a copyright that relates to the film, television or internet production, and B. if the website does not exhibit more than 10 per cent of any film, television or internet production described in subsection (6). iii. One or more virtual or augmented reality experiences. iv. Content that is designed to educate users who are under 12 years of age. 10. The product is not a product the majority of the content of which is also available on a website, except a website that primarily hosts any content described in subparagraphs 9 i to iv. 11. If the product is a specified product, the product is used by the purchaser referred to in paragraphs 2 and 3 of subsection 93 (15) of the Act to generate revenue through, i. the sale of the product, ii. fees for the use of the product, including licence and subscription fees, iii. in-product purchases, iv. advertising, other than advertising of, A. the qualifying corporation, B. the purchaser referred to in paragraphs 2 and 3 of subsection 93 (15) of the Act, C. a person that does not deal at arm’s length with the qualifying corporation or the purchaser, or D. products or services of the qualifying corporation, the purchaser or a person that does not deal at arm’s length with the qualifying corporation or the purchaser, or v. the sale or licence of another product developed by the qualifying corporation that can reasonably be considered an extension or upgrade of the product. 12. If the product is not a specified product, the product is used by the qualifying corporation to generate revenue through, i. the sale of the product, ii. fees for the use of the product, including licence and subscription fees, iii. in-product purchases, iv. advertising, other than advertising of, A. the qualifying corporation, B. a person that does not deal at arm’s length with the qualifying corporation, C. products or services of the qualifying corporation or a person that does not deal at arm’s length with the qualifying corporation, or v. the sale or licence of another product developed by the qualifying corporation that can reasonably be considered an extension or upgrade of the product. O. Reg. 77/17, s. 5 (4). (6) A film, television or internet production for the purposes of subparagraph 9 ii of subsection (5) is a production, (a) that is produced, (i) for commercial release in theatres; (ii) for broadcasting on television; or (iii) for broadcasting over the internet where the end user is required to pay a purchase, licence or subscription fee; and (b) that is not, (i) news, current events or public affairs programming, or a programme that includes weather or market reports, (ii) a talk show, (iii) a production in respect of a game, questionnaire or contest (other than a production directed primarily at minors), (iv) a sports event or activity, (v) a gala presentation or an awards show, (vi) a production that solicits funds, (vii) reality television, (viii) pornography, (ix) advertising, (x) a production produced primarily for industrial, corporate or institutional purposes, or (xi) a production, other than a documentary, all or substantially all of which consists of stock footage. O. Reg. 77/17, s. 5 (4). (7) The Ontario labour ratio of a qualifying corporation in respect of a product is equal to the amount determined by the formula, A/B in which, “A” is the sum of all expenditures of the qualifying corporation or qualifying predecessor corporation in respect of the product that satisfy the conditions set out in subsection (9). “B” is the sum of all expenditures in respect of the product that satisfy the conditions set out in subsection (10). O. Reg. 77/17, s. 5 (4). (8) The Ontario wage ratio of a qualifying corporation in respect of a product is equal to the amount determined by the formula, C/D in which, “C” is the sum of all expenditures of the qualifying corporation or qualifying predecessor corporation in respect of the product that satisfy the conditions set out in subsection (11). “D” is the sum of all expenditures in respect of the product that satisfy the conditions set out in subsection (10). O. Reg. 77/17, s. 5 (4). (9) The following are the conditions referred to in the definition of “A” in subsection (7): 1. The expenditure is incurred during the time period set out in subsection 93 (4) of the Act that is applicable to the product. 2. The expenditure satisfies the conditions set out in paragraphs 1, 2 and 4 of subsection 35 (4). 3. The expenditure is paid no later than 60 days after the end of the taxation year of the qualifying corporation
in which development of the eligible product is completed. 4. The expenditure is incurred, i. on account of salaries or wages paid to an employee of the qualifying corporation or qualifying predecessor corporation, as the case may be, who reported to a permanent establishment of that corporation in Ontario at which the eligible product was being developed, or ii. on account of remuneration paid in respect of services rendered at a permanent establishment in Ontario to, A. an individual who is not an employee of the qualifying corporation or qualifying predecessor corporation, as the case may be, and who deals at arm’s length with that corporation, to the extent that the expenditure is attributable to services personally rendered by the individual if the individual provides the services as part of a sole proprietorship carried on by the individual and that does not have employees, or B. a taxable Canadian corporation for services rendered personally by an individual, 1. if all of the issued and outstanding shares of the capital stock of the taxable Canadian corporation (other than directors’ qualifying shares) are owned by the individual, 2. if the individual deals at arm’s length with the qualifying corporation or qualifying predecessor corporation, as the case may be, 3. if the taxable Canadian corporation’s primary activity is the provision of the individual’s services, and 4. if the taxable Canadian corporation has no employees other than the individual. O. Reg. 77/17, s. 5 (4); O. Reg. 112/21, s. 3 (1). (10) The following are the conditions referred to in the definition of “B” in subsection (7) and in the definition of “D” in subsection (8): 1. The expenditure is incurred during the time period set out in subsection 93 (4) of the Act that is applicable to the product. 2. The expenditure is directly attributable to the development of the eligible product. 3. The expenditure is incurred, i. on account of salaries or wages, or ii. on account of remuneration paid to an individual, corporation or partnership for services rendered. O. Reg. 77/17, s. 5 (4); O. Reg. 112/21, s. 3 (2). (11) The following are the conditions referred to in the definition of “C” in subsection (8): 1. The expenditure is incurred during the time period set out in subsection 93 (4) of the Act that is applicable to the product. 2. The expenditure satisfies the conditions set out in paragraphs 1, 2 and 4 of subsection 35 (4). 3. The expenditure is paid no later than 60 days after the end of the taxation year of the qualifying corporation in which development of the eligible product is completed. 4. The expenditure is incurred on account of salaries or wages for an employee of the qualifying corporation or a qualifying predecessor corporation, as the case may be, who reported to a permanent establishment of that corporation in Ontario at which the eligible product was being developed. O. Reg. 77/17, s. 5 (4); O. Reg. 112/21, s. 3 (3).