B.C. Strengthens Support for Video Game Industry with Tax Credit Expansion

Canada’s Budget 2025 marked a turning point for video game developers in British Columbia. The province has made its British Columbia interactive digital media tax credit permanent and raised it from 17.5% to 25%, effective September 1, 2025. This expansion gives B.C.-based game studios clear long‑term support, helping to attract investment and create jobs across the province.

The boosted tax credit and ongoing grant programs also means both indie and large studios gain stronger tools to compete. Indie teams benefit most from lower labour costs, while bigger players will see sustained operational value.

Meanwhile, alternative government funding programs give early-stage projects and tech startups more runway to scale across Canada’s vibrant ecosystem. The combined impact creates a more resilient and competitive B.C. independent game development environment.

Tax Credit Expansion Delivers Greater Certainty

The tax credit jump from 17.5% (for costs incurred before September 1, 2025) to 25% (after that date) means a substantial uplift in funding support. The permanent status removes uncertainty and helps video game studios plan with confidence.

This sector already contributes more than $1 billion a year to B.C.’s GDP and employs more than 20,000 people. The expansion aims to nurture that growth trajectory.

“B.C.’s digital sector and gaming industry ranges from massive corporations to small, dedicated teams. We are building an ecosystem where everyone can thrive and compete globally. With this increased tax credit, our groundbreaking Integrated Marketplace Initiative, and events like Web Summit Vancouver, we’re securing B.C.’s position as a global hub for innovation, talent, and creative excellence in interactive entertainment.”
– Diana Gibson, Minister of Jobs, Economic Development and Innovation

Funding Snapshot: British Columbia Interactive Digital Media Tax Credit

The objective of the B.C. interactive digital media tax credit program is to grow B.C.’s digital media ecosystem, support hiring, and enable competitive investment in game and virtual reality (VR) and augmented reality (AR) development.

Funding amount:

• 17.5% refundable on eligible salary/wages for costs before September 1, 2025
• 25% refundable thereafter, permanently

Eligible applicants:

• Registered Canadian corporations with a permanent B.C. presence; salary/wages thresholds apply ($100K–$2M depending on principal business)

Eligible projects:

• Interactive digital media products developed in B.C., including video games, educational software, and AR/VR
• Please note: Eligible projects excluding gambling-related products

Timeline:

• Apply to B.C. Ministry of Finance for registration.
• Claim with CRA within 18 months after fiscal year-end using Schedule 429 and T2 return.
• Permanent credit, with new rate active from salary/wages, is incurred September 1, 2025, onward.

Provincial Commitment in Building a Competitive Ecosystem

B.C.’s broader economic strategy includes investing $30 million in the Integrated Marketplace initiative, helping tech innovators pilot emerging products. The venture‑capital tax credit program also increased its annual individual limit to $300,000, encouraging investors to back small B.C. businesses.

Beyond the tax credit, B.C. video game companies have also benefited from grants like the Video Games Business Development Program, a $1 million joint initiative by Creative BC and the Canada Media Fund (CMF). Five B.C. studios (Critical Path Games, Blue Wizard Digital, Kano Applications, Brace Yourselves Games, and YumeBau) each received $200,000 to develop original IP and scale their operations.

“Our game developers have made many smash hits and beautiful works of art that are well-known in the industry and around the world. With this strengthened tax credit, more of your favourite games are about to be made in B.C., creating jobs and boosting our economy.”
– Spencer Chandra Herbert, Minister of Tourism, Arts, Culture and Sport

Government Funding Application Support

British Columbia’s decision to make the video game tax credit permanent at 25%, alongside targeted grant and incentive programs, offers a golden moment for game and interactive media studios to grow, invest, and innovate.

Ready to tap into B.C.’s expanded interactive digital media tax credit, grants, and venture support? Our Ryan Canada government funding team is here to guide your studio through eligibility, application, and maximizing the impact of every dollar. Contact us today to get started on your funding journey.