Carney government unveils tax deduction to encourage investment

The federal government has announced a new tax measure aimed at increasing business investment in Canada. Introduced at the Canada Investment Summit, the productivity megadeduction will let companies immediately expense the full cost of certain new investments, including machinery, equipment, clean energy assets and zeroemission vehicles. Prime Minister Mark Carney said the policy is intended to make Canada more attractive for investment across the G7. The expansion builds on a deduction announced in last year’s budget and broadens the range of eligible assets, which officials say will now cover about twothirds of investments. Economists quoted in the story said the measure could improve Canada’s tax competitiveness and support new projects, although it will also reduce government revenue by an estimated $36 billion over five years.