Canadian Heritage Committee on Nov. 3rd, 2025

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

I'll go back to Mr. Fogolin.

You mentioned that gaming creates 34,000 jobs in Canada and $5.1 billion in the Canadian economy. We obviously do very well for the size of our nation.

What is it? Is it something in the water? Why? Why are we good?

[Paul Fogolin]

Thanks for pointing out that we are good. We always use the term “punch above our weight”.

I think it's a confluence of factors. The first is talent. We have great academic institutions. We have some natural talent that has developed across the country, going back 20 or 30 years to B.C. We had guys like Don Mattrick making Need for Speed in his basement. He goes down and joins other companies. There's the natural talent.

To Warren's point about government intervention, the Province of Quebec decided to introduce a tax credit for digital media—for video games—many years ago. That was a huge driver of investment and jobs. Since then, almost every province across the country has introduced some version of a digital media tax credit. In fact, B.C. just increased theirs from 17.5% to 25% and made it permanent. The Premier came out to Electronic Arts and made a big announcement. That's definitely been a factor, but that alone wouldn't do it.

You have the talent, you have supports, and you have a solid framework—whether it's federal laws or provincial laws—and then you have the access to global markets. I think Canada is well positioned, both geographically and from an investment and cultural perspective, to sell to those markets. We have such a diverse population, and we have a diverse set of game creators. They're telling their stories, and they're working at all our member companies, creating products that will appeal to a global market. I think all that has come together to create this magic in Canada for the video game industry.

I speak for the video game industry, so I may be biased, but I think it's one that decision-makers like you in government should be looking at as we think about industries of the future to invest in and support. The market is growing, and we're really good at it here.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

One of the things that struck me is how you said that Canada has basically kept its talent here, whereas in the music industry, traditionally, until you make it in the U.S., you're nobody.

What attracts people to Canada and to my city of Edmonton, for instance? What's the deal?

[Paul Fogolin]

Yes, Edmonton is home to some great studios and creators. In fact, I was just in Edmonton a few weeks ago, at the Alberta Games Series.

When you're a company in this industry—like our member companies—and you're thinking about where to invest, for all the reasons I've mentioned, Canada is an attractive option. Also, proximity to the U.S. is helpful for U.S. companies looking to invest. There's a lower dollar, that talent's there and then there's lifestyle. If you're thinking about global talent, we have the health care system here and great academic institutions. We have great communities across the country for people to live and raise families in. I think all of that comes together and has created what we have here in Canada.

Then success breeds success. When you have a hub like Montreal, for instance, everybody in the world knows the Montreal games industry. In fact, we just signed a new member, Wizards of the Coast. It has the Dungeons & Dragons licence. It's based out in Washington state. It established a new studio to make the new Dungeons & Dragons games. Where is it? It's in Montreal. Others are looking to expand in other cities across Canada.

It's something we're proud of, and we want to keep it going, but it doesn't happen by chance.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

How is it that these gaming industries here in Canada have not sold out or been gobbled up by U.S. companies and others?

[Paul Fogolin]

It's a good question.

I think it's because, when you talk about the industry, it's not a monolith. You have small developers, and you have larger developers. A lot of our member companies are U.S., European and Japanese companies, but there's still a healthy number of Canadian-owned studios and IP. In fact, from that StatsCan study I mentioned, three-quarters of all the companies are Canadian-owned.

It's a mix. You have a mix of foreign investment coming to Canada because of the talent, the infrastructure and the people who are great at making games. Then you have homegrown studios here. Some grow quite large. We just signed Behaviour Interactive earlier this year, which is based in Montreal but also has studios in B.C. It's the largest Canadian independent studio. It sells its games all over the world.

It's really a special thing that we have going. It's the combination of those two things, the Canadian homegrown talent and the foreign investment, that is critical to this industry.

[Kerry Diotte, Conservative, Edmonton Griesbach, AB]

Obviously, the film industry and TV industry have long had more government help, I would think.

Would you have the same now, or is it tax...? What's the magic formula?

[Paul Fogolin]

Yes. You know, I'm looking over to my friends here and thinking that Hollywood North wouldn't exist without some of the tax credits, but then it's the talent. Then it's the infrastructure. Then it's all the storytellers. We've certainly benefited from some of that. Also, again, Canadians are really good at making games. If the games are not good, they're not going to sell. They've been able to create very successful games. I know that I don't have a lot of time, but a poker-type game called Balatro was made in Saskatchewan. More than five million copies have been sold. That was made by one person in Saskatchewan.

There's so much opportunity.

[The Chair, Liberal, Lisa Hepfner]

A poker game; that sounds like fun.

[Paul Fogolin]

There you go.

[The Chair, Liberal, Lisa Hepfner]

Are we playing that game next, Mr. Waugh? I'm down for that.

[Voices]

Oh, oh!

[The Chair, Liberal, Lisa Hepfner]

Mr. Al Soud, you have the floor for five minutes.

[Fares Al Soud, Liberal, Mississauga Centre, ON]

Thank you, Madam Chair.

Mr. Chan, for the record, the CityLights series is honestly incredible. I believe it was in an NFT living on blockchain, which gives us a lot to think about. I think we hadn't heard that perspective here in committee before, so thank you.

Mr. Fogolin, you mentioned Canada punching above its weight. You didn't get quite enough time to finish answering, but I think Mr. Diotte's question gave you the time to speak to it. I thank him for that.

Mr. Bischoff, it's a pleasure to see you again. I want to take a moment to thank Mr. Champoux for introducing us not that long ago.

You told the Standing Committee on Industry and Technology that “unlike the provisions of the EU AIA…Canadian creators and rights holders should benefit from an opt-in system to license their works.” You mentioned it in your opening statement today, as well.

Given how much AI has developed globally, is it realistic for Canada to impose an opt-in licensing regime, when the biggest AI models are trained outside the country?

[Samuel Bischoff]

Thank you for your question.

As I mentioned earlier, I think what we are going to see emerge are systems where copyright holders or creators license their work to the AI companies. That includes foreign companies and models developed outside the country. We hope to see a lot more of that. It's in the works.

As was pointed out earlier, our industry doesn't do well when certainty and stability are lacking. In other words, whether it's an American production, Canadian production, service production or national production, certainty around copyright protection is a must—otherwise, there will be no production. It could actually be very problematic.

As for major foreign players that have built their models without permission, I think there is a trend towards responsible AI.

We really hope the government will come out with very clear regulations on that.

[Fares Al Soud, Liberal, Mississauga Centre, ON]

Thank you, Mr. Bischoff.

The Directors Guild of Canada's AI working group notes that “AI raises a host of practical ethical questions” and that “The Guild must demand that any use or method of AI deployed in our industry be ethical”.

I'm curious, Mr. Sonoda: What safeguards do you envision might be necessary to ensure that AI systems used in casting, editing or production don't reinforce systemic inequities? As well, what do you believe is “ethical” AI?

Please be very quick, if possible. I know it's a big question. I apologize.

[Warren Sonoda]

It's no text and data mining without consent. It's respecting our copyright law and our moral rights framework. Having mandatory transparency and the concept of labelling for the public to know what they're actually interacting with will build public trust. That's incredibly important.

Really, keep this conversation going. This is great. Include us. Include unions and guilds and creatives and individual artists, the stakeholders involved, because we can give you perspectives from the floor, from the digital paintbrush, from the digital game room and from the set floor I left in Hamilton on Friday. Include us in the conversation. I think that's an important takeaway as well.

[Fares Al Soud, Liberal, Mississauga Centre, ON]

Thank you, Mr. Sonoda.

Madam Chair, I'll be sharing my time with the lovely Ms. Royer.

[Zoe Royer, Liberal, Port Moody—Coquitlam, BC]

Thank you very much.

I have a minute and 10 seconds or thereabouts, and I'm really intrigued by the conversation. I know that the screen sector generates about $11 billion for the economy.

Mr. Bischoff, I'll give you the last word. What would you like to leave us with?

[Samuel Bischoff]

Thank you. The last words would be that it's a defining moment. We are at a crossroads, and we believe that it is time to act as soon as possible, maybe even before legislation might be in place. That's the role we believe that the federal government has, to take steps to create protections for creators and authors, by labelling, public funds and the public broadcaster, which we have mentioned.

[Zoe Royer, Liberal, Port Moody—Coquitlam, BC]

Thank you.

[The Chair, Liberal, Lisa Hepfner]

Thank you very much.

That concludes our questioning for today.

Your testimony was amazing. It was a super interesting conversation. If there's anything you forgot to say, or if there's anything that occurs to you later—if you have more details or data to share with this committee—please forward it to us. Send it to our clerk. Our analysts can use it, our members can see it, and it can form part of our report at the end of this study. Thank you again for your time.

With that, I will consider this meeting adjourned.