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Canada unveils 'Productivity Mega Deduction' tax reform for instant business write-offs
Ottawa introduced the Productivity Mega Deduction on Oct. 1, letting businesses immediately deduct the full cost of a much broader range of investments — billed as the biggest business tax change in half a century.
Why it matters
The Productivity Mega Deduction is one of the most significant changes to Canada's business tax system in half a century. Businesses will be able to immediately deduct the full cost of a much broader range of investments — new equipment, technology adoption, expansion — giving them a powerful incentive to build, expand and create good jobs in Canada.
Full report
Evan Solomon, Minister of Artificial Intelligence and Digital Innovation and Minister responsible for the Federal Economic Development Agency for Southern Ontario, announced the measure at an event on Oct. 1 highlighting federal support for business investment.
The government says Canada has what the world wants — abundant energy and critical minerals, the most educated workforce in the world, access to 1.5 billion consumers through free trade agreements, and the strongest fiscal position in the G7 — and the new deduction will help create the conditions for a new era of investment in Canada.
Source: Government of Canada, canada.ca (Oct. 1, 2026)
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