Canada’s federal government has introduced a permanent Productivity Mega Deduction that expands immediate 100% expensing to a much wider range of business assets, including aircraft, in a move aimed at lowering the after-tax cost of investment and lifting capital spending. The measure was unveiled at the first Canada Investment Summit in Toronto and lifts the share of eligible assets from roughly 15% to more than 65%.
The incentive covers fibre-optic cable, mining property, oil and gas pipelines, software, research and development, computer equipment, aircraft, vehicles, patents, rail track, bridges and roads. It builds on Budget 2025’s Productivity Super-Deduction, which was narrower and temporary, mainly covering machinery, equipment and technology.
Immediate expensing is being made permanent for most depreciable property acquired on or after 15 September 2026. The policy change is intended to encourage businesses to bring forward investment by allowing a full first-year write-off instead of spreading deductions over several years.
The government’s broader list does not imply a separate aircraft-only carveout, but aircraft are explicitly included among the eligible asset classes. Draft legislation and final implementation details will determine how the new rules apply in practice.