Canadian province Ontario is spending approximately US$534,000 to spur video game development and production.

The provincial government is steering the dollars towards video game producers through three new training programs at Interactive Ontario, a not-for-profit trade group.

The first, ONtheEdge, will train video game entrepreneurs in new business skills, while the second GamesID program will provide market intelligence, marketing and promotional support to video game companies that are eyeing potential domestic and international partnerships.

The third program, the Ontario Video Game and Digital Media Investor Network, will actively work to match video game and digital media developers with Canadian and international investors.

Sandra Pupatello, Ontario minister of economic development and trade, told KidScreen‘s sister pub Playback Daily the new money will get foot-loose global game makers to invest, expand or relocate to Ontario, rather than go elsewhere in Canada or internationally.

‘We need to be competitive,’ the minister said. Her government earlier invested roughly US$210 million in a new Toronto development studio planned by French video games giant Ubisoft.

Pupatello made her announcement at the Game On Finance 2009 conference in Toronto.

Ontario last week enhanced its video game tax credits to enable local producers to offset development costs as they are incurred, and no longer when a video game is completed.

‘It’s not a big waiting game for producers anymore,’ Pupatello said.

The minister added Ontario tax subsidies are for video game makers big and small.

‘Our tax credits not only help the big multinationals. They’re for smaller companies that don’t have large credit lines and need assistance,’ Pupatello said.

Yannis Mallat, CEO of Ubisoft Montreal and Toronto, said the French games maker was drawn to Toronto in part by the provincial subsidies, but also by the opportunity to exploit the traditional story-telling skills of Toronto film and TV producers.

Mallat pointed to the upcoming November launch of two Ubisoft new games, Assassin’s Creed 2 and James Cameron’s Avatar The Game, as encapsulating the current convergence of film and video game production techniques.

Mallat said both games employ live actors and traditional story-telling narratives to better engage game users technically and emotionally.

‘They relate to the characters. That’s the perfect way to create those connections between the consumer’s brain and what’s happening in the game,’ Mallat argued.

Ubisoft is currently scouting possible locations for its proposed Toronto development studio before a planned 2010 launch.