Ontario to match Ottawa's productivity mega deduction

Ontario will match a federal tax measure that lets companies immediately write off the cost of factories and machinery in the year they become available. Finance Minister Peter Bethlenfalvy announced that the matching provincial measure will be included in Ontario's fall economic statement, a financial update the province's government is set to deliver on Thursday. The Globe and Mail reported the announcement.

The federal measure, the Productivity Mega Deduction, was announced by Prime Minister Mark Carney on September 15, 2026. The Prime Minister's Office described it as a way to help businesses invest, grow and create jobs. The federal government says the deduction would permanently provide immediate expensing to a much wider range of assets and expenses.

Ottawa estimates its deduction would cost the federal government $36-billion over the first five years. Ontario's matching measure is expected to cost the province $8-billion over the next five years. Ontario says its tax moves together total an estimated $12-billion in tax relief, on top of the federal break.

The Ontario government estimates the tax measures will attract $11-billion in new investment and create 30,000 jobs. Bethlenfalvy said the new tax breaks will boost the province's economy and signal to investors that they should invest in Ontario.

The federal deduction is expected to be included in the federal budget. Finance Minister François-Philippe Champagne is scheduled to deliver that budget on November 5.