The Victoria Cross (VC; French: Croix de Victoria) was created in 1993, perpetuating the lineage of the British Victoria Cross, while serving as the highest award within the Canadian honours system, taking precedence over all other orders, decorations, and medals. It is awarded by the governor general of Canada to any member of the Canadian Armed Forces or allies serving under or with Canadian military command for extraordinary valour and devotion to duty while facing hostile forces. The British Victoria Cross was recommended prior to the creation of the Canadian medal. The previous Victoria Cross remains the highest award of the United Kingdom honours system and was also awarded in other Commonwealth countries; although most, including Canada, later established their own honours systems and no longer recommended British honours.

The Canadian Victoria Cross can be awarded for action against armed mutineers, pirates, or other such hostile forces whereas the conditions of the British Victoria Cross last recoded in 1961, "shall only be awarded for some daring and pre-eminent act of valour or self-sacrifice or extreme devotion to duty in the presence of the enemy". The warrants for neither the Canadian nor the British Victoria Cross require war to be officially declared. Recipients are entitled to use the post-nominal letters VC (for both English and French), but they do not receive an annuity for the award. The decoration has not been awarded since its inception.

The original Victoria Cross was created by a Royal Warrant issued on 29 January 1856 with the royal sign-manual of Queen Victoria, and was intended to recognize demonstrations of gallantry during the Crimean War, regardless of either a man's social status or his record of service. Initially, the Victoria Cross could not be conferred on colonial troops, until Major Charles Heaphy received the medal for his actions while serving with a New Zealand militia unit in 1864. After this, the Victoria Cross was made available to all "local forces under imperial command." The cross could not be awarded posthumously but the policy was reversed in 1907.

Until 1972, 81 members of the Canadian military (including those from Newfoundland) and 13 Canadians serving in British units had been awarded the Victoria Cross. After that date, however, the Canadian honours system was overhauled, and the Victoria Cross was eliminated from the official list of honours, instigating a decades-long debate on whether or not to reinstate the decoration. The prime minister at the time, Pierre Trudeau, regularly dodged questions about the Victoria Cross, stating only that Canadians should receive Canadian decorations. In 1987, prime minister Brian Mulroney set up a committee to look into the creation of a Canadian Victoria Cross as part of a new series of military honours. Although the committee did not recommend the Victoria Cross—names such as the Canada Cross and the Cross of Military Valour were put forward—the creation of a Victoria Cross for Australia in 1991 and pressure from The Globe and Mail and advocacy groups, such as the Monarchist League of Canada and the Royal Canadian Legion, forced the plans to be amended. In 1991 a private member's bill received all-party support in the House of Commons, following which Mulroney formally advised the creation of the Victoria Cross, along with other Canadian military valour decorations, on 31 December 1992. The awards formally came into being with the issue of letters patent by Queen Elizabeth II on 2 February of the following year, thereby ceasing Canadian dependence (except for those honours and awards in the personal gift of the Sovereign) on the British honours system.

The Victoria Cross is awarded for "the most conspicuous bravery, a daring or pre-eminent act of valour or self-sacrifice or extreme devotion to duty, in the presence of the enemy" at any point after 1 January 1993. It may be presented posthumously. The main distinction between the Victoria Cross and the Cross of Valour is the specific reference to "the enemy", which the Canadian government has defined as a force hostile towards the Canadian Crown, including armed mutineers, rebels, rioters, and pirates. This means that the King-in-Council does not officially have to declare war to give acknowledgement of the existence of a hostile force that fits the official description. Thus, a Canadian serving as part of a peacekeeping operation is eligible to be awarded the Victoria Cross if the service member fulfils the above criteria.

In the case of a gallant and daring act having been performed by a squadron, ship's company, or detached body of individuals (such as a security detachment) in which all persons were deemed equally brave and deserving of the Victoria Cross, a ballot is to be drawn; the commissioned and Non-commissioned officers each select one of their own, and the private soldiers or seamen select from amongst themselves two individuals. This provision with modification is included in the current warrant but has not been used since the First World War.

The process of awarding the Victoria Cross may take place in two ways: One is through a recommendation by the Decorations and Commendations Advisory Committee, which is a part of the Department of National Defence and has six members, one appointed by the governor general and the rest by the chief of the Defence Staff. Alternatively, a field commander can submit a name for consideration, though permission must be obtained from the governor general before the award can be presented. Recipients are entitled to receive an annuity from the federal Canadian Crown; per the Canadian gallantry awards order issued in January 2005, members of the Canadian Armed Forces or those who joined the British forces while domiciled in Canada or Newfoundland prior to 31 March 1949, after receiving the Victoria Cross, be granted CA$3,000 each year. Previously, Canadians who were posthumously awarded the British Victoria Cross were given special headstones at their burial sites in Commonwealth War Graves and other cemeteries.

To date, no Canadian Victoria Cross has been conferred; Smokey Smith, who died in 2005, was the last living Canadian recipient of the imperial Victoria Cross, personally receiving it from King George VI at Buckingham Palace in December 1944. The last action that resulted in a Canadian being awarded the Victoria Cross was to Lieutenant Robert Hampton Gray for gallantry on 9 August 1945, at Onagawa Bay, Miyagi Prefecture, Japan. The award was posthumously gazetted on 13 November 1945 although in the following five months, three additional awards to Canadians were gazetted for actions in 1941, 1942 and February 1945. Prior to Queen Elizabeth II's re-dedication of the Vimy Memorial on 7 April 2007, there was speculation she would present a Canadian Victoria Cross to her then-prime minister, Stephen Harper, offering it in recognition of the gallantry of the Unknown Soldier, as representative of all Canada's casualties of combat. The proposal was met with a mixed response from members of the Royal Canadian Legion and Canadian Armed Forces, detractors feeling that the Unknown Soldier should not be elevated above his other comrades killed in war. It had also been agreed at the time of the Unknown Soldier's repatriation that no award or decoration would be bestowed on the remains. No decision was taken about the awarding of the Victoria Cross to the Unknown Soldier.