Sir Elton John’s presence added even more glam to the occasion as Ontario, Canada’s provincial government announced yesterday that it was investing US$20.6 million (CDN$23 million) in Starz Animation’s Toronto-based studio.

The unexpected outlay of cash will go toward expanding the workforce and capacity at the studio owned by US conglom Starz Media (itself a subsidiary of Liberty Media). Starz Animation’s goal is to bump current staff levels up to roughly 250 and attract more international business to the Canadian city. Starz is also investing US$117 million into the facility over the next five years.

As for Sir Elton, he was on-hand to announce one of the studio’s major projects coming down the pike – Gnomeo and Juliet, a 3-D animated film from Miramax Films and prodco Rocket Pictures owned by John and partner David Furnish. The recently resurrected project is a comic re-envisioning Shakespeare’s Romeo and Juliet as depicted by ceramic gnomes inhabiting a suburban English garden. John and long-time writing partner Bernie Taupin will supply the music.

Robert Clasen, chairman and CEO of Starz’ Denver, Colorado-based HQ, and head of the Toronto studio, David Steinberg, were both there to accept the funding from the Ontario Premier Dalton McGuinty and said the studio should add 40 staff by the end of the year. John said he expects the investment will boost the Canadian animation sector and ultimately attract Canuck animators who moved State-side for animation work back to Canada.

When asked why only one animation company was singled out to receive millions in funding from the province’s billion-dollar Next Generation of Jobs Fund, Premier McGuinty said Starz took part in a process available for businesses to apply for funding, and along with its track record of successful projects, satisfied all the necessary requirements.

Along with getting character design underway for John’s Gnomeo that’s been slated for theatrical release in 2011, Starz Animation has just finished up work on Tim Burton/Universal/Focus Features pic 9.