New Federal "Productivity Mega Deduction"

If enacted, it would permanently allow businesses to deduct 100% of the cost of most depreciable property acquired on or after September 15, 2026, once the property becomes available for use. The measure would also permit the immediate deduction of eligible Canadian development expenses incurred from that date.

Certain assets would be excluded, including certain buildings and additions to buildings, goodwill and other specified intangible property, certain licenses and similar rights, natural-gas distribution pipelines, certain vehicles, and specified mining and timber interests.

Eligibility would also be subject to conditions relating to previously used property, non-arm’s-length acquisitions and tax-deferred rollovers, with additional limitations applying to individuals and certain partnerships.

Premier Frechette has announced that Quebec intends to harmonize with this federal measure, but has not yet announced any application details. We will monitor further announcements from Quebec and update this communication once further information becomes available.

For further information on this new measure, please contact your Crowe BGK advisor.