How the proposal works
What the Mega Deduction changes
The proposal would allow immediate expensing for most depreciable business property acquired on or after September 15, 2026. In most cases, it changes when the deduction is claimed, not the total deduction over the asset’s life.
Compare it with the deduction already available
Capital cost allowance already lets a business deduct depreciable property over time, and existing accelerated measures can produce a substantial first-year deduction. The Mega Deduction does not generally turn a capital purchase into a new permanent deduction. It moves deductions that would otherwise be claimed in later years into the year the property becomes available for use.
That is why the relevant comparison is not purchase price versus zero. It is the proposed first-year deduction versus the first-year CCA already available. The difference affects current taxable income and cash tax, but it also reduces the undepreciated capital cost available in future years.
Acquisition and available-for-use dates are different
The September 15, 2026 acquisition threshold determines whether property can enter the proposed regime. The available-for-use rules generally determine when the deduction can begin. Equipment purchased before year-end but installed and operational afterward may not produce a deduction in the acquisition year.
Some used property can qualify
The proposal does not exclude every used asset. Previously used property may qualify when neither the taxpayer nor a non-arm’s-length person previously owned it and the property is not transferred on a tax-deferred rollover basis. Businesses should retain evidence of prior ownership and the terms of the acquisition.
Examples
Different assets, different first-year deductions
| 2026 example | Cost | Existing first year | Proposed first year |
|---|---|---|---|
| Ordinary Class 8 equipment | $100,000 | $30,000 | $100,000 |
| Qualifying Class 50 computer | $20,000 | $20,000 | $20,000 |
| Ordinary Class 1 building | Varies | Existing CCA | Excluded |
Illustrative amounts assume the asset meets the stated classification and timing conditions. The Class 8 example reflects the reaccelerated first-year baseline described in the calculator policy. Actual claims depend on the taxpayer’s facts.
Before claiming the deduction
Check these details
Classification
Is the asset actually in the expected CCA class, or do its use and specifications change the treatment?
Timing
Will the property be acquired after September 14 and become available for use before the corporation’s taxation year-end?
Existing incentives
Does another enacted measure already provide full or accelerated first-year expensing?
Tax attributes
Will the deduction reduce income taxed at the general rate, the small-business rate, or create a loss that does not generate immediate cash savings?
Class-level amounts
Do opening UCC, assistance, dispositions, short-year rules, or cost limits change the maximum claim?
Documentation
Can the business support cost, acquisition, availability for use, prior ownership, related-party status, and vehicle characteristics?