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A scene from Ubisoft video game Assassin's Creed: Brotherhood.

Ubisoft via AP

French video-game publisher Ubisoft Entertainment SA is raising its bet on Quebec, unveiling plans to invest another $780-million and create 1,000 new jobs in the province over the next decade amid persistent criticism over the tax breaks the company receives.

The Paris-based maker of the Assassin's Creed series said in a statement Tuesday it will open a new studio in Saguenay next year, its fourth in Quebec, and another studio in a yet-to-be-decided location as part of a strategy to push further into smaller cities. It also anticipates adding jobs to its existing work force in Quebec City and Montreal.

Ubisoft chief executive Yves Guillemot is expanding the business overseas as he prepares to fight off a potential takeover attempt at home from media giant Vivendi SA. A showdown looms later this month, when Ubisoft investors gather for the company's annual meeting.

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"These investments mark the deployment of the biggest growth plan in the history of Ubisoft in Quebec," Mr. Guillemot told a news conference in Saguenay on Tuesday, which was attended by Premier Philippe Couillard and Finance Minister Carlos Leitao. Mr. Guillemot noted that Quebec boasts a number of educational institutions that companies in the sector can tap for talent and said the province was on the path to becoming the world's leading hub for video-game development.

Not everyone believes Quebec should pursue that path.

Executives from music technology startup Amp Me Inc. and enterprise search business Coveo Inc. are among those decrying the taxpayer-funded aid Quebec offers to foreign-based firms to expand their technology-related operations. Louis Têtu, chief executive of Quebec City-based Coveo, has said Quebec is essentially paying foreign companies to drain a scarce resource, skilled IT labour, which is desperately needed by local companies creating the real wealth in the economy.

Quebec offers tax credits ranging from 26 per cent to 37.5 per cent on salaries of up to $100,000 for multimedia companies, such as video-game producers, that meet its eligibility criteria. Additional tax credits are also available, including a 30-per-cent credit for the development of e-business. The incentives are open to both foreign and local firms.

Mr. Leitao defended the tax credits to Ubisoft on Tuesday, saying the video-game maker has historically played a "hyperstructural" role in the creation and development of Quebec's video-game industry, which now employs about 10,000 people. "For us, it's extremely important to keep a company like that here," he said.

Mr. Têtu disagreed, saying in an e-mailed comment to The Globe and Mail that Ubisoft's expansion to Saguenay creates a new competitor for tech talent in the region. That in turn puts more pressure on local businesses that are desperately trying to hire and modernize their technology, he said.

"Ubisoft creates capital gain only in France, not in Quebec, and thus does not contribute net new injection of wealth in our economy," Mr. Têtu said. "In the past 10 years, Quebec taxpayers have given Ubisoft $800-million instead of investing in businesses that create wealth here. This is economically absurd."

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The governments of Quebec, Ontario and Canada have collectively given Ubisoft financial support worth €545-million (about $803-million Canadian at current exchange rates) over the past 11 years, according to a calculation published in June by Montreal's La Presse. The sum is more than its cumulative profit of about €434-million over the same time, the newspaper said.

Vivendi and its billionaire chairman, Vincent Bolloré, have been stalking Ubisoft for more than a year and currently hold about 25 per cent of voting rights at the video-game producer. Ubisoft says its big shareholders, such as Fidelity and BlackRock, are adamant that Mr. Bolloré cannot take over the company through a creeping tender and must offer a premium through a formal takeover bid.

Ubisoft is determined to stay independent, saying it enjoys a decision-making and operational agility that it wouldn't have under Vivendi. It argues that most big media groups have failed when they entered the video-game business, including Walt Disney Co.

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