By Jon Scarr
The Canadian Interactive Alliance (CIAIC) has proposed that Ottawa establish $100 million in permanent annual funding for Canada's interactive digital media industry. The proposal, submitted to the federal government on September 4, would support Canadian-owned video game studios and other interactive media developers through the Canada Media Fund.
The request comes after the Canada Media Fund increased its interactive digital media budget to $57 million for 2026–27. CIAIC welcomed that increase but says more funding is needed to help Canadian studios develop their games and attract private investment.
Canada Media Fund Increased Its IDM Budget to $57 Million
The Canada Media Fund's (CMF) $57 million allocation represents a 36% increase from the previous year. It's the largest year-over-year increase for interactive digital media (IDM) since the fund was established. In July, the CMF announced more than $18 million in funding for 20 interactive digital media projects. Nineteen were video games, while the remaining project was an interactive and immersive experience.
Among the recipients was Toronto developer Soft Rains, which received $1.45 million for A Dish Best Served Cold. Montréal's Outerminds also received $1.5 million for PROPS!. The funding came through two programmes. The Commercial Projects Program supports games with commercial potential. The Innovation and Experimentation Program focuses on new approaches to interactive development.
The CMF also introduced a pilot funding stream for developers with at least 25% third-party investment secured. However, the fund has stopped accepting applications for that stream because of high demand. Despite these increases, CIAIC argues that some commercially viable Canadian projects still miss out on funding because demand exceeds available resources.
More Funding Could Help Canadian-Owned Game Studios
For independent studios, securing enough money to develop a playable prototype can be a major hurdle. Developers often need something concrete to demonstrate before publishers or private investors will consider financing their games. CIAIC is calling for more early-stage funding for Canadian-owned studios. Its proposal includes support for pre-production work that wouldn't require developers to give up an ownership stake.
The association argues that this initial investment could attract additional financing from publishers and investors. It could also help Canadian studios retain ownership of their games and the revenue they generate. The proposed funding wouldn't be limited to video games. Interactive digital media also includes extended reality (XR), immersive experiences, spatial computing and other interactive software.
CIAIC estimates that the investment could generate a tenfold economic return over ten years. That figure is the association's projection, based on expected private investment and future revenue. It isn't a guaranteed outcome.
Rather than requesting a one-time increase, CIAIC recommends making the $100 million annual commitment permanent. CIAIC recommends delivering the funding through the CMF and making it a long-term part of Ottawa's audiovisual funding plans.
Proposal Also Supports a National Video Game Strategy
The funding request also connects with the ongoing discussion about a National Video Game Strategy for Canada. CIAIC explicitly supports the Entertainment Software Association of Canada's (ESAC) call for a long-term strategic framework. It also recommends creating a National Interactive Digital Media Strategy that would include a Video Game Strategy. ESAC president Paul Fogolin recently raised the idea of a National Video Game Strategy during Video Games on the Hill 2026 in Ottawa.
CIAIC represents ten provincial interactive media organizations, including Interactive Ontario, DigiBC and La Guilde du jeu vidéo du Québec. The alliance has also proposed a National Creative Innovation Lab Network to support training, prototypes and access to international markets.
The federal government closed its pre-budget consultations on September 8, four days after CIAIC submitted its recommendation. The $100 million request is now part of the wider discussion surrounding Budget 2026. Ottawa hasn't announced a new annual funding commitment or adopted either proposed national strategy.
Jon Scarr
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