The measure. The federal government is proposing a "Productivity Mega-Deduction." It would let businesses deduct the full cost of an investment in the first year, meaning the year the asset becomes available for use. It's a federal measure: it affects federal income tax everywhere in Canada, Quebec included. The Department of Finance presented it on September 29, 2026, and several ministers have since promoted it, including the Immigration Minister on October 9.
What changes. Today, a business deducts the cost of a machine or a computer bit by bit over several years: that's the capital cost allowance. According to the Department of Finance backgrounder, the new measure would permanently allow an immediate write-off for most depreciable property acquired on or after September 15, 2026. The share of eligible investment would rise from about 15% to nearly two thirds.
What's in, and what's out. The government's list includes software, computer hardware, vehicles, patents, research and development, greenhouses and fibre-optic cable. Buildings are excluded, as are franchises, licences and goodwill, and certain vehicles. Excluded property remains eligible for the existing temporary enhanced first-year deduction (the Accelerated Investment Incentive).
What still needs to happen. For now, it's a proposal: the government has published draft amendments to the Income Tax Act, which still have to be passed. The document also sets out rules limiting the ability of individuals and certain partnerships to create or increase a loss with this deduction. According to the government, the measure would cost $36 billion over five years starting in 2026–27.
Good to know. If you're self-employed or run a small business and are planning a major purchase, talk to your accountant before deciding: the acquisition date and the asset's class both matter. Our guide to self-employment in Quebec covers the first steps. For details of the October 9 announcement, see Immigration, Refugees and Citizenship Canada's news release.
