Canada Expanded Business Asset Expensing Policies
The federal government increased the share of assets eligible for immediate tax write-offs to boost productivity.
Updated on Oct. 9, 2026 in Economic Policy
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The federal government has permanently increased the portion of business assets eligible for immediate expensing from 15% to over 65%. Minister Jol Lightbound announced the change while visiting Ferreol Skis in Beaupre, Quebec.
Why it matters
The policy aims to lower investment costs and encourage Canadian businesses to adopt new technologies. By creating conditions for an investment supercycle, the government hopes to drive long-term economic growth and national competitiveness.
The government raised the proportion of assets eligible for immediate expensing to more than 65% from a previous baseline of roughly 15%. Consequently, the marginal effective tax rate on new business investments has fallen to 6.4% from roughly 13%.
The players
Jol Lightbound
Jol Lightbound is a federal minister who is leading government efforts to implement new economic and tax policy initiatives.
Ferreol Skis
Ferreol Skis is a manufacturing company based in Beaupre, Quebec, that hosted the ministerial visit to discuss business investment.
The details
The Productivity Mega Deduction allows companies to immediately deduct the full cost of various investments to improve operational efficiency. This permanent change is designed to reduce the overall financial burden of upgrading equipment and hardware across the country.
Timeline
October 9, 2026: Minister Jol Lightbound visited Ferreol Skis in Beaupre to discuss the tax policy.
Macro View
This tax shift represents a structural change in Canadian fiscal policy, moving away from legacy depreciation schedules toward immediate capital recovery. It mirrors historic efforts to stimulate private sector investment by reducing the upfront cost of modernization during periods of economic transition.
By lowering the marginal effective tax rate, the government aims to stimulate business investment that can lead to stronger job security and wage growth for employees. Readers may see local businesses increasing their capital spending on new equipment as a direct result of these lower costs.
The takeaway
Businesses should evaluate their upcoming capital investment plans to take advantage of these new permanent expensing rules. Adopting new technology now may provide a significant tax benefit compared to investment strategies used under the previous 15% eligibility threshold.
Further reading
Learn more about the latest federal updates in the Economic Policy section.
Source note: This article includes information reported by Toronto Telegraph.
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