Over at Kotaku, Brian Crecente has a link to an article from St. Catherines, Ontario where Denis Dyack tells consumers that unless they buy Too Human, the town will die. To death.

Well, not really. Dyack never actually tried to lay down the massive “you’re killing my town” guilt trip on gamers, and I have no doubt that Crecente knows that. With tongue firmly planted in cheek, he just put a sensational spin one what really amounts to a non-story by a small market newspaper. “Local Business hopes new industry will breathe life into flagging economy.” These kind of stories are printed by papers in towns and cities all over the country.

Now, I was foolish enough to scroll through the comments from Kotaku readers (which is almost always a fool’s errand) hoping that to see a discussion on the impact of the video game industry on small town economies. Of course, aside from a few coherent points from a few commenters, saw mostly knee-jerk reactions based on the sensationalist headline and a free-form “I hate Too Human” pile-on.

Now, let’s not spend much time talking about Dyack (smart guy with his foot surgically implanted in his mouth) or Too Human (which seems unimpressive, but not actively BAD.). The real question here is how important is the game industry to Canadian cities?

At the moment, probably not too important to a place like St. Catherines. Silicon Knights is the only substantial industry presence in the city, and employs just over 160 people out of around 150,000 residents. Even if Too Human tanks, it isn’t going to spell the end of the town.

But, like many towns (especially in Southern Ontario), St. Catherines could do with a financial boost – the city has traditionally relied on manufacturing and tourism from nearby Niagara. The former industry has taken a sharp nosedive as of late, and the second is in trouble with fewer Americans coming up to spend their greenbacks in our great white souvenir shops.

For a smaller city like St Catherines, the video game industry is an extremely attractive option. It’s a fairly high-paying sector (especially compared to manufacturing), it’s a fairly clean industry, and it is one of the few areas that are on the rise. As General Motors plants threaten to close and the construction market in Canada is cooling rapidly, video games are a booming business. Canada’s game industry is expected to see a 9.4% annual growth for the next four years – that puts us almost at the top of countries with booming electronic gaming sectors. It was a $ 1.5 billion industry last year (at a time when the Canadian dollar actually means something) and there is no reason to suspect that it won’t be even bigger this year.

Aside from just the good that a game company itself can do for the local economy, the industry also attracts related businesses – game developers provide support for a number of related services: animation, voice acting, advertising and promotion.

Canada’s video game industry is growing, there is no doubt about that, but there are still serious obstacles in the path of Canada’s game industry. Number one, while we have a number of highly-respected developers, the national landscape is nearly barren when it comes to publishers. Publishers hold tremendous power in the gaming industry – they are the ones that decide whose games get made, and how much creative control the developers receive over the final project. While Canadian developers is always a great thing, more publishers are also needed to put the country on the map.

As well, while they are technically considered “Canadian”, most of the bigger developers are actually just local branches of multi-national companies – Rockstar Vancouver, EA Canada and Ubisoft Montreal are all just the arms of large, multi-limbed international corporations. Which isn’t a bad thing, per say – these companies still offer considerable contribution to the local economies. But having truly local companies, especially those that do business outside of the canuck game Meccas of Montreal and Vancouver, is always a good thing. St Catherines’ Silicon Knights, Sherbrooke, Que.’s Golemgames and Edmonton’s Bioware (which I drive by on the way to work) – encouraging more of these types of developers, through incentives or tax-breaks, would do well for the Canadian economy. Manufacturing, at least for now, is in decline, and the west’s commodity-based prosperity won’t last forever. We need to be looking to what industries are going to do well in the future – gaming is one of them. Many provinces, like British Columbia, Ontario and Quebec have already offered these kinds of tax breaks to attract game developers – it’s no coincidence that the country’s game industry is (nearly) located completely in these areas.

Canada has a sophisticated economy, highly-educated workforce and easy access to the gaming market juggernaut that is the United States – we’re an attractive choice for game developers. So attractive that other countries sometimes suspect us of malfeasance when attracting their home-grown companies. (Why Britain is surprised that game developers want to flee the country as the government takes every opportunity to criticize the industry is beyond me.)

Canada is ripe for the electronic entertainment industry. We just have to show that we take fun and games very seriously.