The federal government has proposed a new “productivity mega deduction” that would allow for the immediate write-off of most depreciable property acquired on or after September 15, 2026, in contrast to claiming CCA over the life of the asset. For example, if a business purchases $100,000 of qualifying equipment, it could generally deduct the entire $100,000 in the year the equipment becomes available for use, rather than deducting the cost gradually. Unlike many recent CCA-related incentives, there would be no phaseout of this immediate expensing proposal. The total deduction for an asset would not change, it is simply the timing of the claim that is accelerated under this proposal.
Eligible property would include depreciable capital property subject to the CCA rules acquired on or after September 15, 2026. The proposal is very broad and would apply to various depreciable business assets such as:
* machinery and equipment;
* computers and other technology;
* office furniture and equipment;
* tools and other business equipment; and
* a limited category of vehicles.
However, a few types of assets do not qualify (referred to as excluded property) for immediate expensing. Some notable exceptions are buildings (and additions to buildings), intangible assets (such as franchises, licences and goodwill) and certain vehicles (referred to as excluded vehicles). In general, to qualify, the vehicle must be both new and assembled in Canada.
Although not noted in the release, an April 17, 2025 AutoTrader.ca article (How Can You Tell if a Car is Made in Canada?) stated that a vehicle identification number (VIN) for a vehicle assembled in Canada will begin with the number 2. Some transactions between related parties and purchases involving property that has previously been owned or used may not qualify. Individuals and partnerships with individual partners would not be permitted to create or increase a loss from the property or business activity in which the assets are used, consistent with the previous temporary immediate expensing measure. The above proposal has not yet been tabled or passed into law.
Tax Tip: Businesses planning significant equipment or other capital purchases may want to consider this new proposal as part of their investment decisions.
General information only, not tax advice for your situation.