By Jon Scarr
Canada's 2026 federal budget arrives November 5th, and the Canadian Interactive Alliance is asking Ottawa to commit $100 million a year to interactive digital media, including video games. The proposal would establish permanent funding through the Canada Media Fund. It hasn't been approved.
The Canada Media Fund increased its interactive digital media allocation from $42 million to $57 million for 2026–27. According to a 2024 study commissioned by the Entertainment Software Association of Canada (ESAC), the country's video game industry contributed an estimated $5.1 billion in total GDP impact and directly supported 34,010 full-time-equivalent jobs in 2023–24.
The alliance has also called for a national strategy covering video games and other interactive technologies. ESAC's wider federal priorities include skilled workers, intellectual property and digital trade. Ottawa already has investment, research and export programs, but those existing measures don't tell us what Thursday's budget will bring.
Industry Seeks Permanent Funding Through Ottawa's Audiovisual Review
The $100 million proposal is tied to Ottawa's review of federal support for screen-based industries. In September, the alliance asked for a permanent interactive digital media commitment within Canadian Heritage's audiovisual-sector modernization.
That review concerns federal funding arrangements and institutions, not just the Canada Media Fund. In April, Canadian Heritage named an 11-member advisory panel. Its members include Jason Della Rocca, a game industry entrepreneur and Execution Labs co-founder. His involvement puts video game experience on a panel examining audiovisual support across Canada.
The proposed commitment would also cover extended reality, simulation software and other interactive development. CIAIC wants long-term funding for the broader sector as Ottawa decides how its audiovisual support should work in the future.
National Strategy Proposal Includes Canadian-Owned Games
The alliance has separately proposed a National Interactive Digital Media Strategy that includes a Video Game Strategy. Part of that discussion concerns Canadian-owned intellectual property, including games that independent studios can develop, retain and sell internationally.
ESAC's 2024 study estimated that 76% of responding game companies were Canadian-owned. Foreign-owned companies nevertheless accounted for 88% of industry employment. The alliance wants more Canadian-owned games and technology without discounting the investment and jobs international studios bring to Canada.
CIAIC has proposed a National Creative Innovation Lab Network covering training, prototyping and international market preparation. The alliance also wants creative technology skills training that connects work in games with animation, extended reality and AI. ESAC president and CEO Paul Fogolin raised the idea of a national video game strategy after September's Video Games on the Hill event. A funding increase and a national strategy would be separate government decisions.
Canada's Venture Capital Plans and Game Studio Financing
CIAIC's wider policy priorities include a separate $2 billion Innovation Fund through Innovation, Science and Economic Development Canada (ISED). It would invest in Canadian-owned intellectual property and digital storytelling technologies. It's a broader industry policy proposal, not an investment Ottawa has announced.
Ottawa is also developing broader measures to improve access to investment for Canadian businesses. On October 22nd, Industry Minister Mélanie Joly outlined a $1.75 billion venture and growth capital plan. Both components originated in Budget 2025, rather than the budget scheduled for this Thursday.
The plan includes a $1 billion Venture and Growth Capital Catalyst Initiative. Its purpose is to attract private investment into Canadian venture capital funds. A separate $750 million Early and Growth Stage Investment Strategy has two streams. The first sets aside $75 million for pre-seed and seed investment. The other allocates $675 million for later-stage investment to help Canadian companies grow.
The government is accepting feedback on the later-stage stream until November 23rd. These initiatives support investment through funds rather than grants reserved for game studios. Whether an individual developer benefits will depend on where those funds invest.
Skilled Workers and Research Tax Incentives
Canadian studios also depend on access to people with specialized development skills. ESAC's federal lobbying registration calls for predictable immigration pathways for game workers and better ways to retain international talent. It also advocates domestic digital-skills training and improved labour mobility between provinces. These are the association's wider policy priorities, not a verified list of Budget 2026 requests.
Federal research incentives are another consideration. Changes to the Scientific Research and Experimental Development (SR&ED) program received Royal Assent in March. For eligible corporations, the annual expenditure limit increased from $3 million to $6 million. That limit applies to the enhanced 35% investment tax credit for qualifying tax years.
Those changes are already in effect. A studio must undertake eligible technological research or experimental development to qualify. Routine game production alone doesn't meet that requirement.
Canada Already Funds Creative Export Programs and Trade Missions
Reaching customers outside Canada is another part of the industry's federal policy discussion. ESAC's registered priorities include digital trade and greater recognition of games in creative-industry trade missions and export programs.
In May, Ottawa permanently renewed the Creative Export Strategy. It committed $95 million over five years beginning in 2026–27, followed by $19 million annually. The strategy supports multiple creative industries, including interactive digital media, through funding, trade missions and business-development assistance.
A Canadian delegation travelled to China in October. It represented 36 companies and organizations, primarily from interactive digital media and the performing arts. Canadian Heritage reported more than 370 business meetings and seven commercial agreements worth over $4.2 million. Those totals cover the full delegation, not video game companies alone.
The trade mission and renewed export funding are examples of support already operating before Budget 2026.
Funding and Strategy Remain the Key Budget Questions
Finance Minister François-Philippe Champagne will table the budget November 5th. Canadian developers will be watching for permanent funding beyond the current Canada Media Fund allocation. Any specific commitment to developing a national strategy would be a separate development.
Measures involving investment, skilled workers, research incentives or exports could affect studios too. The details will determine which companies benefit. The alliance has requested a $100 million annual baseline. Thursday's budget will reveal whether Ottawa makes that commitment.
Jon Scarr
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