Prime Minister Mark Carney announced a new Productivity Mega Deduction on Sept. 15, 2026, at the first Canada Investment Summit in Toronto, a tax measure that would let businesses write off the full cost of a far wider range of assets in the year those assets are put to use rather than gradually over decades.
According to the federal announcement, the change expands immediate expensing from roughly 15 per cent of business assets to more than 65 per cent, newly covering oil and gas pipelines, mining property, fibre-optic cable, rail track, bridges, roads, aircraft and vehicles, software, computer equipment, patents, and research and development. The government puts the fiscal cost at about $36 billion over five years beginning this year, and says the measure would drop Canada’s marginal effective tax rate on new business investment from roughly 13 per cent to 6.4 per cent, which it describes as the lowest of any major economy and less than half the U.S. rate. It builds on the Productivity Super-Deduction from Budget 2025, which covered machinery, equipment and technology. Business groups welcomed the announcement, according to The Canadian Press.
Here is the part the headline number obscures. Immediate expensing does not usually hand a company a deduction it would never otherwise have received. Under Canada’s capital cost allowance rules, a firm that buys a $10-million piece of mining equipment already deducts that $10 million, just spread across many years at a set annual rate. Immediate expensing compresses the same total deduction into year one. What the company gains is the use of that money earlier, which is genuinely valuable, but it is the time value of the deduction rather than a permanent reduction in what it eventually owes. A meaningful share of the $36-billion figure is therefore revenue moved from later years into earlier ones, not revenue erased. Ottawa has not, in the announcement, broken out how much of the cost is pull-forward and how much is a permanent loss to the treasury, and that split determines how much of the price tag is real long-run spending.
The second thing worth knowing is who actually collects the benefit and when. This is a deduction, not a refundable credit. It reduces taxable income, so a company needs taxable income for it to do anything immediately. A profitable pipeline operator or established miner can apply it against this year’s earnings and see the cash effect right away. A pre-revenue exploration company, a start-up burning capital, or a firm having a bad year has nothing to apply it against, and carries the loss forward instead. The measure is designed to shift investment decisions at the margin, but the near-term cash lands first with companies that are already making money.
The asset list also matters in a way that connects directly to what was happening outside the summit. Pipelines and mining property moving into year-one expensing raises the after-tax value of exactly the category of project that Indigenous land defenders and environmental groups came to Toronto to protest. A mine or pipeline build that was marginal on an after-tax basis can clear its internal hurdle once the capital deductions arrive up front instead of over 20 years. The consultation and assessment requirements attached to those projects do not change because of a tax announcement, but the financial pressure to push them forward does. That is a policy interaction, announced indoors, that alters the stakes of the argument being made on the street.
The remaining question the announcement does not settle is definitional. Eligibility rules, the precise start date, and how terms like “mining property” and “available for use” are drawn in the eventual legislation will decide which projects qualify and which fall outside. Those details, not the summit podium, are where the $36 billion gets allocated.
Reported via the Prime Minister’s Office and Department of Finance Canada announcement and The Canadian Press. Original release: pm.gc.ca.
