September 2026

Canadian manufacturers are entering a potentially important new era for capital investment.

On September 15, 2026, the Government of Canada announced the proposed Productivity Mega Deduction, a new tax measure designed to encourage Canadian businesses to invest in machinery, equipment, technology and other productive capital assets.

For companies considering an investment in new manufacturing equipment, this could make the timing of an equipment purchase particularly important.

What is the Productivity Mega Deduction?

Under the proposed measure, businesses would generally be able to immediately expense the full cost of eligible depreciable capital property in the year the property becomes available for use, rather than deducting the cost gradually over a number of years.

The Government of Canada proposes that the measure would apply on a permanent basis to most eligible depreciable property acquired on or after September 15, 2026, subject to specific exclusions and conditions.

The proposal would significantly expand the range of assets eligible for immediate expensing. The federal government estimates that approximately two-thirds of capital asset investment could eventually qualify, compared with roughly 15% under the previous Productivity Super-Deduction.

What could this mean for manufacturing businesses?

For a manufacturing company, purchasing new production equipment is a major capital decision.

The proposed Productivity Mega Deduction could allow an eligible business to recognize the full cost of qualifying equipment as a deduction in the year the equipment becomes available for use.

This can potentially:

• Improve the timing of tax deductions
• Improve business cash flow
• Reduce the after-tax cost of an equipment investment
• Make modernization and automation projects more attractive
• Help manufacturers invest in increased production capacity

The Government of Canada specifically identifies machinery and equipment among the types of productive capital that have benefited from accelerated tax treatment, while CRA rules identify eligible manufacturing and processing machinery and equipment within the CCA system.

An opportunity to upgrade your production equipment

If your company has been considering purchasing a new roll forming machine, forming line, production machine or other industrial equipment, the new tax environment may be worth discussing with your accountant or tax advisor.

A planned equipment purchase could potentially provide two benefits:

1. Increase production capability

New machinery can help manufacturers increase capacity, improve consistency, reduce manual work and modernize their production process.

2. Potentially accelerate the tax deduction

If the equipment qualifies under the final Productivity Mega Deduction rules, the business may be able to deduct its eligible cost much sooner than under traditional CCA treatment.

That combination can make the economics of a major equipment investment more attractive.

Thinking about a roll forming machine?

At Stangroup, we supply roll forming and other industrial machinery to manufacturers across Canada.

Whether you are looking to:

• Add a new production line
• Increase manufacturing capacity
• Replace older equipment
• Automate part of your production process
• Improve production efficiency
• Start a new manufacturing operation
• Expand into new products

this may be a good time to review your equipment investment plans.

Let’s discuss your next machine

If you are considering a new roll forming machine or other production equipment, contact Stangroup to discuss your requirements.

We can help you evaluate equipment options, specifications and the investment required for your project.

Visit [www.stangroup.ca] to explore our machinery and contact our team.

Important tax information

The Productivity Mega Deduction was announced by the Government of Canada on September 15, 2026 as a proposed measure. Eligibility depends on the final legislation and the specific circumstances of the taxpayer and the equipment purchased. Certain types of property are excluded, and additional conditions and restrictions may apply.

This article is provided for general informational purposes only and is not tax or accounting advice. Businesses should consult their qualified accountant or tax advisor to determine whether a particular machine or equipment purchase qualifies and how the proposed rules may apply to their situation.

Source: Government of Canada, Department of Finance Canada — Productivity Mega Deduction, September 15, 2026.