Canada unveils productivity tax deduction for investment

Canada’s federal government has announced the new Productivity Mega Deduction to encourage business investment, with Adam van Koeverden highlighting it at an event in Brantford, Ontario on October 2, 2026.

• The measure will allow businesses to immediately deduct the full cost of a broader range of investments, expanding eligible assets from roughly 15% to more than 65%.
• The policy includes assets such as fibre-optic cable, greenhouses, mining property, oil and gas pipelines, software, R&D, computer equipment, aircraft, vehicles, patents, rail track, bridges, and roads; the government says this will lower the marginal effective tax rate on new business investment from about 13% to 6.4%.
• The government also says immediate expensing will be made permanent, and that over five years about $280 billion in capital investments and incentives could enable more than $1 trillion in total investment.