B.C. Enhances Support for Video Game and VR Developers
The Government of British Columbia has announced a significant enhancement to its interactive digital media tax credit, increasing it from 17.5% to 25% starting from 1 September. In a move aimed at solidifying support for the digital media industry, the province has also declared the credit permanent, offering long-term financial certainty for companies operating in sectors such as video games, virtual reality, and educational software.
Premier David Eby, speaking at the Electronic Arts campus in Burnaby, indicated that the decision was a strategic step in reinforcing British Columbia’s economic independence. The enhanced credit comes amid growing international tensions, including threats of protectionist tariffs from former U.S. President Donald Trump. The government regards this shift as a proactive response, aiming to build a more resilient local economy that is less vulnerable to foreign policy shocks.
Finance Minister Brenda Bailey described the decision as an investment in the province’s knowledge economy. She acknowledged that other provinces have implemented even higher credits but emphasised that B.C. already offers a competitive taxation system alongside other benefits such as access to global talent and a robust technological infrastructure. The 25% figure, she noted, reflects a balanced and sustainable approach tailored to B.C.’s economic context.
According to government projections, the cost of the revised tax programme is estimated at $141 million for the 2025–26 fiscal year. This figure is set to increase to $151.3 million in the second year and reach $180.3 million by 2027–28, indicating the province’s expectation of continued growth and engagement within the interactive digital media sector. These figures reflect both the direct uptake of the programme and the anticipated expansion of the industry in response to the enhanced incentive.
The sector’s contribution to British Columbia’s economy is already considerable. Government-affiliated agency Creative BC estimates that the interactive digital media industry, which includes video game development, virtual and augmented reality, and educational software, employs around 20,000 people across the province. The sector also contributes more than $1 billion annually to the provincial economy, underscoring its strategic importance.
Major players in the industry, such as EA SPORTS Studios, have welcomed the change, viewing it as a formal acknowledgment of the value that digital media companies add to the regional economy. The measure is expected to facilitate further local hiring, technological investment, and global competitiveness. While EA stands out as one of the dominant names in the gaming sector, the tax credit revision has been particularly well-received by smaller developers, which constitute a substantial portion of the local industry. The Entertainment Software Association of Canada reports that nearly half of all video game firms in B.C. have 10 or fewer employees, highlighting the breadth of impact this policy change could have.
The decision to strengthen the tax incentive also raises potential concerns regarding future trade relations, particularly with the United States. Earlier this year, Trump had proposed a 100% tariff on foreign-made films following the province’s efforts to retain film productions through enhanced tax credits. Although this latest policy targets a different creative domain, there remains the possibility of similar criticisms from American policymakers, who may view the tax support as a distortion of fair market competition.
However, Premier Eby has stressed that the decision was made independently and without reference to potential foreign reactions. The provincial government remains committed to its broader strategy of fostering innovation and self-reliance, prioritising the economic stability and growth of British Columbia over international political considerations.
By cementing the interactive digital media tax credit at a higher, permanent rate, British Columbia is demonstrating its intent to champion a sector that merges artistic creativity with technological innovation. The measure is poised to bolster the province’s reputation as a global centre for digital media development and attract further investment, talent, and ingenuity. Through this policy, the province seeks to ensure that its economy remains both competitive and resilient in a rapidly evolving global landscape.
