Productivity Mega Deduction<\/a> Sept. 15 at the Canada Investment Summit in Toronto. The measure would expand immediate expensing from roughly 15 per cent of capital assets to about two-thirds.\u00a0<\/p>\nEligible investments would include items such as fibre-optic cable, mining property, oil and gas pipelines, software, research and development, computer equipment, aircraft, vehicles, patents, rail track, bridges and roads.\u00a0<\/p>\n
Businesses could deduct full cost sooner<\/p>\n
Under Canada\u2019s capital cost allowance system, businesses generally deduct the cost of depreciable assets over a number of years.<\/p>\n
Immediate expensing instead allows the full cost of an eligible investment to be deducted in the year the asset becomes available for use.<\/p>\n
The Department of Finance says the proposal would permanently provide immediate expensing for most eligible depreciable property acquired on or after Sept. 15, 2026.<\/p>\n
Some assets would remain excluded, including certain buildings, goodwill, licences, some vehicles and some regulated natural gas distribution pipelines.<\/p>\n
The measure builds on the Productivity Super-Deduction introduced in Budget 2025, which provided immediate expensing for a narrower range of investments including machinery, equipment and some technology.\u00a0<\/p>\n
Related Stories:<\/p>\n
Government projects lower effective tax rate<\/p>\n
The federal government estimates the expanded deduction would reduce Canada\u2019s marginal effective tax rate on new business investment from about 13 per cent to 6.4 per cent.<\/p>\n
Finance Canada estimates the comparable U.S. rate at 16.9 per cent and the OECD average, excluding Canada, at 19 per cent. The marginal effective tax rate is a measure used to compare the tax burden on an additional dollar of business investment.\u00a0<\/p>\n
The government estimates the measure would cost about $36 billion over five years beginning in 2026-27.\u00a0<\/p>\n
Carney said the government is trying to encourage more companies to build and expand in Canada.<\/p>\n
\u201cWe are capitalising on these strengths and making Canada the best place in the world to invest,\u201d Carney said.<\/p>\n
Part of broader investment push<\/p>\n
The announcement was made during the first Canada Investment Summit, hosted by the federal government in partnership with the Canada Pension Plan Investment Board and the Public Sector Pension Investment Board.<\/p>\n
Ottawa says roughly $280 billion in federal capital investments and incentives over five years are intended to help generate more than $1 trillion in public, private and institutional investment. That figure is a government projection rather than committed investment.\u00a0<\/p>\n
Finance Canada says the Productivity Mega Deduction is intended to increase business investment, productivity and long-term economic growth by reducing the after-tax cost of new capital spending.\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"The federal government is proposing a major expansion of immediate tax deductions for business investment, allowing companies to…\n","protected":false},"author":2,"featured_media":911894,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[194295],"tags":[49,48,20739],"class_list":["post-911893","post","type-post","status-publish","format-standard","has-post-thumbnail","category-ottawa","tag-ca","tag-canada","tag-ottawa"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/911893","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=911893"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/911893\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/911894"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=911893"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=911893"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=911893"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}