Canada's Carney Expands Tax Breaks for Most New Capital Investing

Summary

Canadian Prime Minister Mark Carney announces that Canada is on track to balance its operating budget next year, one year ahead of schedule, while maintaining the lowest overall deficit in the G7. He also introduces a 'productivity mega deduction' effective today, allowing immediate expensing for most new capital investment, with two-thirds of assets qualifying. The measure is designed to make investing in Canada cheaper and to support eligible sectors including machinery, manufacturing equipment, software, patents, R&D, fiber, rail, and pipelines.

• Canada targets a balanced operating budget next year, one year early.
• Canada maintains the lowest overall deficit in the G7.
• New immediate expensing policy is effective today.
• Two-thirds of new capital assets will qualify for the deduction.
• Eligible assets include machinery, manufacturing equipment, software, patents, and R&D.
• Eligible infrastructure includes fiber, rail, pipelines, and other connective infrastructure.
• The policy aims to lower the after-tax cost of investing in Canada.
• The measure is branded the productivity mega deduction.