Updated October 2026: the Super-Deduction has been expanded
On September 15, 2026, the federal government proposed the Productivity Mega Deduction, a permanent 100% first-year write-off for most equipment and other depreciable property acquired on or after that date. It goes well beyond the Budget 2025 measures described below. Read our new guide: Productivity Mega Deduction: Buy the Equipment, Write It Off This Year, Keep Your Cash.
The Productivity Super-Deduction from Budget 2025 sped up tax relief on qualifying capital investments. It never paid for the equipment itself. Financing closes that timing gap.
When the federal government tabled Budget 2025 on November 4, 2025, it grouped a set of accelerated write-offs under one name: the Productivity Super-Deduction. For Canadian SMEs, the idea was simple. Invest in productive assets and deduct more of the cost sooner. The catch was just as simple. A faster deduction lowers the tax you pay when you file, but you still need cash to buy the asset today.
What the Productivity Super-Deduction included
The Budget 2025 package combined new and previously announced measures:
- Immediate expensing of manufacturing and processing buildings acquired on or after November 4, 2025 and used for manufacturing or processing before 2030, with a phase-out from 2030 to 2033.
- The Accelerated Investment Incentive, an enhanced first-year write-off for most capital assets.
- Immediate expensing of clean energy generation and energy conservation equipment, and zero-emission vehicles.
- Immediate expensing of patents, data network infrastructure and computers.
- Immediate expensing of capital spending on scientific research and experimental development (SR&ED).
- Enhanced write-offs for low-carbon LNG facilities.
Together, these covered a meaningful but limited slice of business investment. Most general equipment, such as construction machinery, still followed the regular declining-balance rules with a better first year.
What changed in September 2026
The Productivity Mega Deduction, announced on September 15, 2026, extends immediate expensing to most depreciable property, roughly two-thirds of business capital investment by Finance Canada's estimate, and makes it permanent. Key differences:
| Super-Deduction (Budget 2025) | Mega Deduction (September 2026) | |
|---|---|---|
| Scope | Specific asset types and buildings | Most depreciable property, with listed exclusions |
| General machinery and equipment | Enhanced first-year write-off | 100% first-year write-off |
| M&P buildings | Immediate expensing (temporary) | Excluded, but the Budget 2025 measure continues |
| Used equipment | Depended on the measure | Qualifies if never owned by you or a non-arm's length party |
| Duration | Mostly temporary | Permanent, as proposed |
| Status | Budget measures | Draft legislation, not yet law |
If you are planning a purchase now, the Mega Deduction is the rule to plan around. The full details, including what is excluded, are in our Productivity Mega Deduction guide. If your fiscal year-end is coming up, see our year-end equipment purchase guide for the timing rules.
How CBLE helps you capture the deduction
Turn future tax savings into buying power today
Short-term CAPEX bridge financing and SR&ED advances let you buy the asset now and repay as the tax relief arrives.
Structures matched to your tax timing
Equipment loans, leases and short-term bridges, with early paydown options so you can put the tax saving to work.
Underwriting that works with your accountant
We coordinate documents with your CPA to speed approvals and avoid back-and-forth.
How it works
- 1. Free eligibility check. Tell us about the asset, the estimated cost and how you will use it. It takes about two minutes.
- 2. Quote and structure. We propose a CAPEX Accelerator, equipment loan or lease from our network of 30+ lenders, and flag the questions to confirm with your CPA.
- 3. Fund and implement. Buy the asset, claim the deduction with your accountant, and use the tax saving to prepay or reduce your financing cost.
Recommended financing products
CAPEX Accelerator (6 to 18 months)
A short-term bridge covering purchase and implementation until the tax refund or improved cash flow arrives. Flexible prepayment once the tax benefit lands. See bridge financing.
Equipment loan or term financing
Fixed or variable terms, larger down payment options, and early paydown so you can apply tax savings efficiently. You own the asset, so you claim the write-off.
Equipment lease
Lower upfront cost and predictable payments. With a true lease, the leasing company usually claims the write-off rather than you, so discuss lease vs buy with your CPA. More on equipment leasing.
SR&ED advance
An advance against anticipated refundable SR&ED credits, where applicable. CPA verification required.
Quick checklist: is your purchase likely eligible?
- Was the asset acquired on or after September 15, 2026? If so, the Mega Deduction likely applies. If earlier, the Budget 2025 rules apply.
- Is it used primarily to earn business income?
- Is it outside the excluded classes, such as general buildings, goodwill and certain passenger vehicles?
- If it is used, has it never been owned by you or a related party?
- Will it be available for use before your fiscal year-end?
- Has your accountant confirmed the treatment?
Illustrative use case
A small manufacturer needs a new press to increase capacity. The immediate write-off makes the purchase more attractive, but the company needs cash now to buy it. CBLE arranges a CAPEX Accelerator to fund the purchase and installation. Once the tax relief is confirmed, the company applies the saving to prepay the bridge, or keeps it as working capital for the ramp-up.
Illustrative only. Not tax advice.
Productivity Super-Deduction FAQ
How do I qualify for the Productivity Super-Deduction?
Qualification depends on the asset and when you acquired it. Manufacturing and processing buildings acquired on or after November 4, 2025 and used for manufacturing or processing before 2030 qualify for immediate expensing under Budget 2025. For most other equipment acquired on or after September 15, 2026, the proposed Productivity Mega Deduction now applies instead and is broader. Your accountant should confirm the class and treatment of each asset.
Is the Productivity Super-Deduction still available?
Parts of it continue, including immediate expensing for manufacturing and processing buildings, which runs until 2030 before phasing out. For most equipment acquired on or after September 15, 2026, the proposed Productivity Mega Deduction offers a broader, permanent 100% first-year write-off. The Mega Deduction is draft legislation and not yet law.
Will every equipment purchase qualify?
No. Eligibility depends on the asset's capital cost allowance class, when it was acquired, whether it is used, and how it is used in your business. General buildings, goodwill and certain passenger vehicles are excluded from the Mega Deduction. We recommend CPA confirmation of the tax treatment for each purchase.
Do I still need financing if my purchase qualifies?
Most businesses do. The deduction reduces the tax you pay when you file, but it does not provide cash to buy the asset today. Financing bridges that timing gap so you can put the equipment to work now and use the tax saving to pay it down.
Does CBLE give tax advice?
No. Canada Business Loan Experts arranges financing and eligibility checks through a network of 30+ lenders. Clients should confirm how to claim any deduction with a licensed tax professional.
Get a free eligibility check
Tell us about the asset and we will match it to the right structure from 30+ lenders. No obligation.
Would rather talk it through first? Call (604) 762 7350 or book a call.
Not tax advice. Confirm eligibility with a licensed accountant. Sources: Government of Canada, Budget 2025 (November 4, 2025); Department of Finance Canada, Productivity Mega Deduction announcement and draft legislative proposals (September 15, 2026). First published November 2025, updated October 2026.
