The federal government is broadening a tax measure designed to encourage businesses to increase investment in Canada.
Prime Minister Mark Carney announced the “productivity mega deduction” during the Canada Investment Summit in Toronto on Tuesday. The measure expands on an investment incentive first introduced in the 2025 federal budget.
Under the expanded policy, businesses will be able to immediately expense a wider range of eligible investments on a permanent basis. The government expects the measure to encourage companies to invest more in productivity-enhancing assets and business growth.
The expansion is expected to cost the federal government approximately $36 billion over five years, beginning this year.
During his keynote address, Carney also said Canada is on course to balance its operating budget next year, which he described as one year earlier than previously planned. He added that Canada continues to have the lowest overall deficit among G7 countries.
The government says the tax changes are intended to support investment and productivity while creating stronger conditions for economic growth.
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