Expanded Immediate Expensing – Productivity Mega Deduction
by RMP Advisors LLP | September 16, 2026
On September 15, 2026, the Federal government announced the Productivity Mega Deduction (“PMD”), a proposed permanent tax incentive that would allow businesses to write off the full cost of most eligible depreciable capital assets in the year they are purchased and put into use. The PMD would apply to eligible property acquired on or after September 15, 2026.
For a property to qualify for immediate expensing under the PMD:
- The property must be depreciable property (i.e., capital investments other than land) acquired on or after September 15, 2026. There is currently no proposed end date for the incentive.
- The property must be an eligible business asset. Certain types of property are excluded, including:
- Most buildings and building additions;
- Goodwill and certain other intangible assets; and
- Certain vehicles, including used vehicles and vehicles assembled outside Canada.
- The property can be either:
- New property; or
- Used property that was purchased from an arm’s-length party and was not acquired as part of a tax-deferred “rollover” transaction.
Other key points:
- Manufacturing and processing buildings would not qualify for the PMD but may continue to benefit from the immediate expensing measures announced in Budget 2025.
- Certain restrictions apply to individuals and some partnerships to prevent the PMD deduction from creating or increasing a tax loss.
For more details on this incentive – please click this link.
Please reach out to your RMP advisor if you would like to discuss how these proposals may affect your business.
