Canada Introduces Productivity Mega Deduction, Expanding Immediate Expensing to Over 65 Per Cent of Assets
The Government of Canada introduced the new Productivity Mega Deduction on October 2, describing it as one of the most significant changes to Canada's business tax system in half a century. The measure allows businesses to immediately deduct the full cost of a much broader range of investments in the year they become available for use, giving them a powerful incentive to build, expand and create jobs in communities across Canada.
Under the Department of Finance plan, the share of assets eligible for immediate expensing will increase from roughly 15 per cent to more than 65 per cent, newly including fibre-optic cable, greenhouses, mining property, oil and gas pipelines, software, research and development, computer equipment, aircraft and vehicles, patents, rail track, bridges and roads. The federal government is also making immediate expensing permanent, giving businesses long-term certainty for major investment decisions. The measure applies to eligible property acquired on or after September 15, 2026.
Together, the changes will lower the marginal effective tax rate on new business investment from roughly 13 per cent to 6.4 per cent, the lowest of any major economy in the world and less than half the rate in the United States, the department said. Over five years, the government's capital investments and incentives in support of third parties, totalling about $280 billion, are expected to enable more than $1 trillion in total investment from public, private and institutional partners.
Agriculture and Agri-Food Minister Heath MacDonald highlighted the measure during a visit to an equipment manufacturer in Charlottetown, Prince Edward Island, on October 2. Minister of Finance François-Philippe Champagne said the deduction will help Canadian businesses of all sizes invest in new equipment, adopt new technology, expand their operations and compete at home and around the world.
Source: Department of Finance Canada
Published by GSM · USA (original Chinese edition)
Photo: 图：工厂工人操作工业设备（资料图）。生产力超级扣除让企业可立即抵扣逾65%的投资成本。图片来源：Shixart1985 摄，Wikimedia Commons，CC BY 2.0。EN: A worker operates industrial equipment in a factory (file photo). The Productivity Mega Deduction lets businesses immediately expense over 65 per cent of investment costs. Image: photo by Shixart1985, via Wikimedia Commons, CC BY 2.0.
