Budget Lowers Tax Rate on Business Investment to 6.4%
Budget 2026 makes the Productivity Mega Deduction permanent for businesses, letting them immediately write off the full cost of a broader range of capital assets representing more than 65% of investment. The measure lowers the marginal effective tax rate on new business investment in Canada from 13% to 6.4%. Those official figures describe the investment measure behind the search for “Poilievre pans Liberal budget’s $15M capital,” but do not substantiate that claim.
Did Poilievre pan the Liberal budget’s $15 million capital measure?
Quick answer: No. Budget 2026’s official figures describe the Productivity Mega Deduction, not a $15 million capital measure or Poilievre’s response. The deduction lets businesses immediately write off the full cost of a broader range of capital assets, permanently, and lowers the marginal effective tax rate on new business investment from 13% to 6.4%.
- It applies to businesses and covers capital assets representing more than 65% of investment.
- Use the 13% and 6.4% figures to compare the marginal effective tax rate before and after the measure.
- Read Budget 2026’s official description of the Productivity Mega Deduction.
Who can use the deduction?
Businesses are the group addressed by the Productivity Mega Deduction, which covers a broader range of capital assets representing more than 65% of investment.
The measure lets businesses immediately write off the full cost of those assets on a permanent basis.
Key dates and amounts
The rate falls to 6.4%.
| What | Figure or date | Applies to |
|---|---|---|
| Broader range of capital assets | More than 65% of investment | Capital assets businesses can immediately write off in full |
| Marginal effective tax rate before the deduction | 13% | New business investment in Canada |
| Marginal effective tax rate after the deduction | 6.4% | New business investment in Canada |
The measure combines immediate write-offs with a lower marginal effective tax rate, addressing both the cost of eligible investment and the tax on new investment. The write-off is permanent.
What should a business check next?
To determine whether the Productivity Mega Deduction applies to a planned investment, compare the asset with the broader range of capital assets described in Budget 2026.
Read the official measure. Budget 2026 says businesses can permanently write off the full cost of a broader range of capital assets immediately. Read Chapter 1 of Budget 2026.
Consider the planned asset. The measure covers a broader range of capital assets representing more than 65% of investment. The details don’t name individual assets.
Use the tax-rate figures as context. The measure lowers the marginal effective tax rate on new business investment from 13% to 6.4%. The official tax-rate chart shows the rates, while the capital accumulation chart presents additional capital accumulation with the deduction.
Last checked: November 13, 2026. Rules and dates can change; confirm on Canada.ca.
| Key fact | Source |
|---|---|
| Pre-seed and Seed Investment Stream: $75 million to support investment in innovative early-stage companies. | Government of Canada |
| Later and Growth Stage Investment Stream: $675 million to increase the availability of domestic growth capital for Canadian companies as they expand and scale. | Government of Canada |
| Tax certainty for investments of $1B or more: fast-track access to binding Canada Revenue Agency rulings before capital is committed. | Government of Canada |
| Bell’s Saskatchewan AI hub: 1.2 gigawatts of projected capacity, initially 300 megawatts and scaling to 1.2 gigawatts. | Government of Canada |
| Defence: the Business Development Bank of Canada will deploy $700 million to accelerate growth in Canadian defence and dual-use technologies. | Government of Canada |
| Marathon mine, approximately $140 million: Canada Growth Fund equity investment in copper and palladium. | Government of Canada |
Frequently Asked Questions
When does the Productivity Mega Deduction start for new investments?
Budget 2026 makes the Productivity Mega Deduction permanent, allowing businesses to immediately write off the full cost of a broader range of capital assets.
Does the deduction apply to all business types and industries?
The measure applies to businesses, with immediate write-offs for a broader range of capital assets representing more than 65% of investment.
Are there limits, exclusions, or recapture rules for the immediate write-off?
Budget 2026 describes an immediate write-off of the full cost of a broader range of capital assets, representing more than 65% of investment, on a permanent basis.
How can a business confirm an asset fits the broader capital asset category?
The stated details don’t list individual assets or provide a method for confirming eligibility.
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