TORONTO, October 29, 2026 – The Ontario government announced on October 28 plans to introduce more than $8 billion in business investment tax relief. Under the proposal, eligible businesses would be able to immediately deduct 100 per cent of the cost of qualifying capital assets, including machinery, equipment and software. The measures are expected to be implemented over the next five years and remain subject to legislative approval.
Ontario’s Ministry of Finance said the proposed Ontario Competitiveness Tax Reduction Plan would complement federal tax measures aimed at encouraging productivity-enhancing investment, with the goal of encouraging businesses to invest more in equipment and technology.
According to the provincial proposal, assets eligible for immediate deductions would include machinery and equipment, software, fibre-optic cables, patents, certain vehicles and other qualifying capital assets.
Under existing capital cost allowance rules, businesses purchasing long-term assets such as machinery and equipment generally deduct the costs gradually over several years. Once the new measures take effect, businesses would be able to deduct the full eligible cost of qualifying assets in a single tax year after purchase.
A 100 per cent immediate deduction means a business can deduct the full qualifying capital expenditure when calculating its taxable income. It does not mean the government will pay the purchase price of the equipment.
The provincial government estimates that the measures will provide Ontario businesses with more than $8 billion in tax relief over the next five years.
The proposal must still complete the legislative process and be implemented alongside the corresponding federal tax measures. The final list of eligible assets, applicable start dates and specific filing requirements will depend on the regulations officially adopted.
Businesses planning to invest in equipment or technology in the near future may wish to retain purchase contracts, invoices and records showing when assets were put into use. Once the new rules are finalized, they can review whether their investments qualify for the proposed deductions.
（LJI by Yuanyuan）
