How the proposal works
Write off the cost sooner. Understand the tax saving.
When a business buys a long-lived asset, it usually deducts the cost through capital cost allowance (CCA). The proposed Mega Deduction would let it deduct the full eligible cost of many assets in the first year they are available for use. A $100,000 deduction reduces taxable income by $100,000; the tax saved depends on the rate that applies to that income.
Start with what you can already deduct
The useful question is how much more you could deduct this year. Existing incentives already allow faster deductions for many assets. Qualifying manufacturing machinery, clean-energy equipment, zero-emission vehicles, patents, data-network equipment and computers can already be fully deducted in 2026, so the proposal may make no difference to their first-year claim.
The calculator shows the deduction under existing rules, the proposed deduction, and the additional tax saving from the difference. Claiming more now leaves less undepreciated capital cost (UCC) to deduct later. If the claim creates a loss, part of the benefit may be available in another year rather than as an immediate cash saving.
The Productivity Mega Deduction would broaden immediate expensing beyond the asset groups covered by the earlier Productivity Super-Deduction. Assets excluded from immediate expensing may still receive an enhanced first-year deduction under the Accelerated Investment Incentive.
Buying before year-end is only part of the timing
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.
Buying used? Check who owned it before
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
A $100,000 equipment purchase: what changes?
An Ontario corporation buys $100,000 of eligible Class 8 equipment after September 14, 2026 and puts it into use before year-end. Assume the entire deduction reduces income taxed at the 26.5% combined general rate.
Existing first-year deduction
$30,000
$7,950 less corporate tax
Proposed first-year deduction
$100,000
$26,500 less corporate tax
That is $18,550 in additional first-year tax savings.
The extra $70,000 deduction brings tax relief forward. It also leaves $70,000 less to deduct in future years. If the income qualifies for the small business rate, the tax saving will be lower.
Illustration assumes a full taxation year, 100% business use, sufficient general-rate income, no assistance or dispositions, and eligibility for the reaccelerated 30% first-year Class 8 baseline. The proposal must be enacted before it can be relied on for a claim.
What if the purchase is a computer?
A qualifying $20,000 Class 50 computer may already receive a $20,000 first-year deduction in 2026. In that case, the Mega Deduction adds $0 to the first-year claim. Check the existing treatment before estimating an extra saving.
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, and do the ownership and rollover facts satisfy that regime?
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?
Methodology and source date
Last reviewed September 19, 2026. The calculator first identifies the likely CCA class, tests the proposal’s acquisition, available-for-use, prior-ownership, rollover and exclusion rules, and then compares the proposed first-year deduction with the deduction estimated under existing 2026 rules. It applies the selected corporation and province’s tax rates only to income the added deduction can reduce. It does not assign a dollar result when the asset classification or a material eligibility fact is unresolved.
The proposal is not yet law. TaxDesk reviewed the Department of Finance backgrounder and draft legislative proposals dated September 15, 2026, together with CRA guidance on CCA and asset classes. The calculator will be revised if enacted legislation or later guidance changes the treatment.