--- title: "Productivity Mega Deduction: 100% Write-Off on Equipment" url: https://www.everstonecpa.com/tax-update/productivity-mega-deduction description: "The Productivity Mega Deduction lets a business deduct the full cost of most equipment in the year it is used, with no dollar cap. Check what qualifies." type: tax-update updated: 2026-11-06 summary: "The Productivity Mega Deduction would let a business deduct 100% of the cost of most depreciable property acquired on or after 15 September 2026, in the year it becomes available for use. It is proposed as permanent with no dollar cap. Buildings, goodwill, franchises and licences are excluded, and so are passenger vehicles that are used or assembled outside Canada." faq_count: 3 publisher: EverStone CPA Inc., a Chartered Professional Accountant firm registered with CPA British Columbia and CPA Alberta service_area: British Columbia, Alberta, Ontario and Manitoba language: en-CA contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online --- [Home](https://www.everstonecpa.com/) [Tax updates](https://www.everstonecpa.com/tax-updates) [Budget 2026](https://www.everstonecpa.com/tax-update/federal-budget-2026) Productivity Mega Deduction Corporate tax # Productivity Mega Deduction: write off equipment in the year you buy it By EverStone CPA · Updated November 2026 Announced on 15 September 2026 and confirmed in Budget 2026: most business equipment can be deducted in full in its first year, instead of a slice each year through capital cost allowance. **Quick answer:** The Productivity Mega Deduction would let a business deduct 100% of the cost of most depreciable property acquired on or after 15 September 2026, in the year it becomes available for use. It is proposed as permanent with no dollar cap. Buildings, goodwill, franchises and licences are excluded, and so are passenger vehicles that are used or assembled outside Canada. **Planning a big purchase?** We work out the write-off and how it fits your year-end before you buy, as part of the corporate year-end. [Get My Fixed Quote](https://www.everstonecpa.com/book-online?service=corporate-tax#enquiry-form) **Announced, not yet law** · Property acquired on or after 15 September 2026 (announced, draft legislation released) This has been announced but is not yet law. It can change or be withdrawn. ## How it works Normally a business cannot deduct an equipment purchase all at once. It claims **capital cost allowance (CCA)**, a percentage of the cost each year. The Mega Deduction lets most equipment be deducted in full in the first year it is put to use. The government estimates about 65% of business investment would qualify, up from about 15% under the previous rules. ## What qualifies, and what does not What the Productivity Mega Deduction covers | Type of property | Covered? | | Computers and software | Yes | | Machinery and equipment (for example class 8) | Yes | | Heavy equipment such as excavators (class 38) | Yes | | Most buildings and additions to buildings | No | | Goodwill, franchises and licences | No | | Passenger vehicles bought used, or assembled outside Canada | No | ## Example A contracting company buys a $60,000 excavator in October 2026 and starts using it the same month. Under the Mega Deduction it can deduct the full $60,000 on its 2026 return. Under ordinary CCA it would deduct only part of the cost in 2026 and the rest over the following years. ## Two things to watch **Recapture.** If you later sell the equipment, the amount you receive (up to its cost) can come back into income, because you already deducted it all. **Losses.** Sole proprietors, trusts and partnerships with individual partners cannot use the deduction to create or increase a loss; corporations can. **What to do.** The deduction applies in the year the property is available for use, not when it is ordered. If a December purchase will not arrive until January, the deduction moves to next year. How the ordinary rules work: [the half-year rule for CCA](https://www.everstonecpa.com/blog/half-year-rule-cca-canada) and [equipment CCA classes](https://www.everstonecpa.com/blog/equipment-cca-classes-bc). Whether this applies to you depends on your year-end and structure; [ask about your own situation](https://www.everstonecpa.com/quick-question) and a CPA replies by email, usually the same business day, free. ## Common questions **Does the Productivity Mega Deduction have a dollar limit?** No. The earlier immediate expensing for private corporations was capped at $1.5 million a year; this proposal has no cap. **Can I write off my company car?** Only if it is new and assembled in Canada. Passenger vehicles that are used, or assembled outside Canada, are excluded. **Is it law?** Not yet. Draft legislation was released on 15 September 2026 and the measure was confirmed in Budget 2026, but it has not been enacted. ## Where this comes from Budget 2026 was tabled on 5 November 2026. Figures on this page are from: - [Thor — Productivity Mega Deduction announced](https://www.thor.ca/blog/2026/10/productivity-mega-deduction-announced-immediate-expensing-as-the-new-default-for-capital-investment/) - [Insights CPA — Productivity Mega Deduction: what is excluded](https://insightscpa.ca/productivity-mega-deduction-canada-2026/) - [BLG — Federal Budget 2026: tax measures](https://www.blg.com/en/insights/2026/11/federal-budget-2026-sovereignty-strategic-investment-and-tax-simplification) **General information, not tax advice.** Budget measures are proposals until enacted and can change. Before deciding anything, [send an enquiry](https://www.everstonecpa.com/book-online?service=corporate-tax#enquiry-form). [Federal Budget 2026: what changes for small business owners](https://www.everstonecpa.com/tax-update/federal-budget-2026) [SR&ED now covers regulatory testing and patent costs](https://www.everstonecpa.com/tax-update/sred-expansion-2026) [Tax instalments: the threshold rises from $3,000 to $7,500](https://www.everstonecpa.com/tax-update/instalment-threshold-7500) --- Source: https://www.everstonecpa.com/tax-update/productivity-mega-deduction Prices: https://www.everstonecpa.com/pricing · Contact: info@everstonecpa.com · https://www.everstonecpa.com/book-online