This is the Flag of the Kingdom of New France. It comes from a world where France actually put effort into colonizing the New World. The French government provided monetary incentives for families to settle in France's North American holdings. The thinking was that this investment would eventually be paid back by production of goods from the colonies. Families were given priority because of their importance to sustaining the colonies in the long term. France frequently got involved in boarder scuffles with the British, and this, among other reasons, led to something of an alternate French and Indian War.
Britain gained the Ohio River Valley, and a few other small bits of land, but New France survived the war more or less intact. During the war, the British also managed to capture Cuba. Cuba provided raw materials for Britain's North American colonies which, along with the fact that they were hemmed in by the Mississippi River, meant that the colonies stayed loyal to Britain. Thus, there was no American Revolution in this world.
The same, however, could not be said of the French Revolution. France's colonies had help relieve the pressure on its citizens a bit, but overtaxation, combined with a bad harvest, ensured that the revolution came to pass. However, when it became apparent the revolutionaries were going to gain the upper hand, the French monarchy fled to New France.
Originally, this government-in-exile was known as France-d'outre-mer. However, when it became apparent that retaking European France was unfeasible, the monarchy declared New France independent from France. Thus, the Kingdom of New France was founded. Eventually, things claimed down in Europe, but France remained staunchly republican.
New France is an economic and cultural powerhouse of North America. Over the years, it has to cede some of its southern territories to the Dominion of North America, but these days the two are on friendly terms with each other. The two nations compete with one another for immigrants from around the world. People of all races are given protection under the law of New France. Recently, a First Nations man was elected governor of the province of Canada. New France has been trying to convince nations, such as the Empire of Mexico and the Empire of Brazil, to create a league of New World monarchies.
The flag has as three-tailed banner design and feature blue and white, traditional colors of New France. An enlarged royal seal is displayed prominently on the flag.