In Budget 2025, the federal government introduced a Productivity Super-Deduction so that businesses can immediately deduct 100% of the cost of eligible new investments – machinery, equipment, and technology. Today, at the first Canada Investment Summit, Prime Minister Carney announced that the new Productivity Mega Deduction. This new tax incentive will increase the amount of assets covered from roughly 15% of assets to more than 65%, including fibre-optic cable, mining property, oil and gas pipelines, software, research and development, computer equipment, aircraft and vehicles, patents, rail track, bridges, and roads.

To reinforce Canada’s tax advantage, the federal government is also making immediate expensing permanent so businesses can recover these costs sooner. This will lower the after-tax cost of investing and boost capital investment across Canada. As a result, Canada’s marginal effective tax rate on new business investment will fall from roughly 13% to 6.4% – the lowest of any major economy in the world and less than half the rate in the United States.

In an increasingly uncertain world, a confident Canada is choosing to build – and becoming the best place in the world to build. We are leveraging our strengths, scaling our ambition, and moving with speed to unleash our full potential. We are catalysing unprecedented levels of new investment to build a stronger, more independent, more resilient Canadian economy.