By Jon Scarr
Canada already supports video game development in several ways. Support can take the form of project funding, provincial tax credits, business-development programs and export support. What applies to a studio depends on where it is based and what stage it has reached.
Those programs do different jobs. Some can move a game from prototype to production. Others offset eligible labour or development costs. Separate programs focus on company growth and international markets. These are the main forms of game-specific and interactive-media support, though some studios may also qualify for broader business incentives.
Nordicity’s 2024 industry study for the Entertainment Software Association of Canada (ESAC) estimated provincial interactive digital media (IDM) tax credits at 6% of Canadian game-company revenue. Other tax credits, grants, bursaries and direct public funding accounted for another 2%. In total, public-support mechanisms represented an estimated 8% of industry revenue in 2023–24.
We also looked at why Canada’s video game industry numbers don’t always match in our recent coverage.
Project Funding Takes Games From Prototype to Production
The Canada Media Fund (CMF) is one of the clearest places to see direct support for Canadian game creation. Its 2026–27 budget increased funding for IDM projects by 36% to $57 million. That money covers interactive digital media more broadly, so it shouldn’t be treated as $57 million reserved for video games.
In spring 2026, 10 commercial projects, all video games, received $8.85 million in production funding. Another 22 projects received $4.8 million through the Prototyping Program, and 20 of those projects were games.
Direct funding also exists at the provincial level. Ontario Creates’ IP Fund Interactive Content stream supports video game and XR pre-production and production. Pre-production contributions can reach $50,000. Production funding can reach $250,000 or $500,000, depending on the applicant’s track record.
Saskatchewan takes a similar direct approach through its Digital Game Development Grant. Its Pre-Production stream covers work such as prototypes, demos, vertical slices and pitch material. The Production stream supports complete commercial games, with funding capped at $50,000 per fiscal year and $100,000 over a project’s lifetime.
Provincial Incentives Offset Different Development Costs
Tax credits work differently from direct grants. Rather than financing one stage of a game through a selected funding round, they can offset eligible development expenses for qualifying companies.
Ontario’s refundable Interactive Digital Media Tax Credit has different rates depending on how an eligible product is developed. A 40% credit applies to eligible Ontario labour and certain marketing and distribution expenses for qualifying companies developing and marketing their own products. Specified products and eligible games developed by qualifying or specialized digital game corporations use a 35% rate on eligible Ontario labour.
British Columbia’s Interactive Digital Media Tax Credit uses another formula. For eligible expenditures incurred after August 31, 2025, the credit is 25% of eligible salary and wages. In 2026, Quebec’s tax credit for eligible multimedia titles totals between 26.25% and 37.5% of eligible labour expenses, depending on the category, with refundable and non-refundable components.
Other provinces add more variations. Manitoba offers up to a 40% refundable credit on qualifying labour and certain marketing expenses. Newfoundland and Labrador uses a 40% credit on qualifying expenditures. Nova Scotia calculates its base credit as the lesser of 50% of qualifying expenditures or 25% of total expenditures.
Prince Edward Island has a different model again. Eligible employers can receive up to 25% back on eligible new full-time positions through PEI’s Video Game Labour Rebate.
Federal Scientific Research and Experimental Development (SR&ED) tax incentives may also apply to qualifying experimental-development work. Computer programming can qualify when it directly supports eligible SR&ED work, but routine commercial production does not qualify on its own.
Those percentages are useful, but they are not a provincial ranking. Each program has its own rules for eligible companies, expenses, employees, products and locations. A higher percentage on one page does not automatically mean a studio will receive more support there.
Some Programs Invest in Studios, Not Just Games
Some programs support the company itself, not only an individual game. In September 2026, the CMF announced its first Business Development Program, a $5 million pilot for small and mid-sized Canadian companies working in linear or interactive digital media.
The program has two tracks based on company revenue. Growth can provide up to $100,000 as a non-repayable contribution. Accelerate can provide up to $300,000 as a recoupable investment. Eligible work can include entering new markets, building partnerships, expanding internationally and finding new revenue from existing intellectual property.
British Columbia has a game-specific example through the CMF and Creative BC Video Games Business Development Program. The current program has a $1 million budget and grants of up to $200,000 for established B.C.-based studios. Its 2026 recipient announcement funded five studios at $200,000 each.
Creative BC also has a Video Games Early Stage Growth Program for newer B.C.-based studios, with a $300,000 program budget and grants of up to $50,000.
Project funding can support a particular game through development. Business-development funding supports the studio itself. A studio may need both at different points in its growth.
Export Programs Focus on International Markets
Getting a game made is only part of the challenge. Canadian companies also have to find audiences and business opportunities outside the country.
Creative Export Canada has a $14 million annual funding envelope within the federal Creative Export Strategy. The strategy includes interactive digital media and supports work connected to international market access, discoverability, monetization, marketing, promotion and business networks.
Under the current Creative Export Canada guidelines, interactive digital media projects must also involve at least one other eligible creative industry.
Toronto developer Torn Banner received Creative Export Canada funding over two fiscal years to support Chivalry II’s international expansion. That work included translation, promotional material, influencer campaigns, public relations and trade-show activity in international markets.
That kind of support comes later than prototype funding or a provincial development credit. It focuses on taking Canadian creative work into markets beyond Canada.
Canada’s Video Game Support Doesn’t Come From One Program
Canada’s current support system covers several different needs. A game can receive direct funding during development, a company may qualify for provincial incentives on eligible costs, and separate programs can support business growth or international expansion.
That existing support is also relevant to the recent discussion about a National Video Game Strategy for Canada. ESAC president and CEO Paul Fogolin raised the idea after Video Games on the Hill 2026.
The Canadian Interactive Alliance has also proposed $100 million in annual interactive digital media funding through the CMF. That remains an industry proposal, not approved federal funding.
Any future national discussion would happen alongside an existing network of federal and provincial support. The programs in place today are not one national strategy, but they already play different roles in getting games made, helping studios grow and bringing Canadian games to international markets.
Jon Scarr
Enjoying our coverage? Add 4ScarrsGaming as a Preferred Source on Google.
Comments
Post a Comment
Comments are moderated. Please stay respectful and on topic.