Carney Announces Major Tax Break to Boost Business Investment

Prime Minister Mark Carney has announced a major tax break for companies making new investments in Canada.

Under the new measure, businesses will be able to immediately claim 100 per cent of the cost of eligible new investments, including machinery, equipment and technology, as a tax deduction.

Announced Tuesday, the measure is being called the “Productivity Mega Deduction” and is aimed at encouraging businesses to invest more in their operations.

The government says making investments cheaper will give companies greater incentive to spend on expanding and improving their businesses, helping boost Canada’s productivity and economic growth.

According to the government, the measure will reduce Canada’s marginal effective tax rate on new business investment from 13 per cent to just 6.4 per cent, which it says would be the lowest among major economies.

The share of assets eligible for the deduction will also increase from about 15 per cent to 65 per cent. The expanded list includes fibre-optic cables, mining properties, oil and gas pipelines, software, railway tracks and bridges.