The Canadian Trucking Alliance (CTA) applauds today’s announcement by the Government of Canada of the new Productivity Mega Deduction, which proposes permanent immediate expensing for a broad range of depreciable business assets and responds to a key competitiveness priority advanced by CTA.
Following the introduction of the One Big Beautiful Bill Act in the United States, CTA began calling on the federal government to strengthen Canada’s investment environment by providing permanent, broad-based immediate expensing for business capital investment.
Under the measure announced today, businesses would generally be able to fully deduct the cost of eligible investments in the year the property becomes available for use, rather than depreciating those costs over a number of years. The government is proposing that the new treatment apply permanently to most eligible depreciable property acquired on or after September 15, 2026.
For Canada’s trucking industry, the measure has the potential to significantly improve the economics of investing in newer equipment and technology. Immediate expensing lowers the after-tax cost of capital, strengthens the business case for fleet modernization and gives companies greater certainty when making long-term investment decisions.
CTA has advocated for permanent full expensing over the past year, arguing that Canada must maintain a competitive investment environment for trucking and logistics businesses operating in an integrated North American freight market.
The Alliance has warned that without a permanent and broad-based approach to immediate expensing, Canadian carriers could struggle to match the pace of reinvestment and fleet modernization by their U.S. competitors, increasing the effective cost of doing business in Canada and weakening the competitiveness of Canadian fleets.
The potential impact of today’s announcement on the transportation sector is significant. According to the Department of Finance, the Productivity Mega Deduction is expected to reduce the marginal effective tax rate (METR) for Canada’s transportation and storage sector from 13.3 per cent to -2.3 per cent, compared with a 2026 U.S. rate of 8.6 per cent.
“CTA has consistently called for a permanent tax environment that gives Canadian trucking companies the confidence and ability to reinvest in their businesses, their equipment and their people. Today’s announcement is an important response to that call and a significant step toward ensuring Canadian fleets can compete, invest and modernize alongside their U.S. counterparts” said Scott Tilley, Chairman of the Canadian Trucking Alliance. “This will incentivize Canadian fleets to add newer equipment, with new safety technologies, lower emission engines and better fuel efficiencies, sooner” added Tilley.
“We thank the Government of Canada for recognizing the importance of capital investment to productivity and competitiveness. CTA looks forward to working with the government as the measure moves forward to ensure its final implementation delivers the intended benefits for Canada’s trucking industry.”
The Productivity Mega Deduction would provide immediate expensing for a substantially broader range of depreciable property than previous measures. The federal government estimates that approximately two-thirds of investment in capital assets would be eligible for immediate expensing.
CTA will continue its discussions with the federal government and review the proposed measures to ensure the new rules work effectively for trucking fleets and support continued investment in the trucks, trailers, equipment and technology that keep Canada’s supply chains moving.
The full announcement can be viewed here: Government of Canada introduces new Productivity Mega Deduction to boost Canada’s advantage as the most competitive G7 country for new business investment
