Canada's Permanent Full Expensing for Business Capital Investment

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## Overview On September 15, 2026, Canada announced that full expensing for machinery, equipment, and patent rights will be made permanent and broadened, expanding the scope from around 15 percent to two-thirds of business capital investment (Tax Foundation, September 15). ## Key Details - Full expensing allows businesses to immediately deduct the full cost of qualifying capital investments rather than depreciating them over time. - The policy change significantly broadens the share of business capital investment eligible for full expensing, from roughly 15% to two-thirds (Tax Foundation, September 15). - The announcement covers machinery, equipment, and patent rights specifically (Tax Foundation, September 15). ## Strategic Significance This is a major pro-investment tax reform under the Mark Carney government, part of Canada's broader economic realignment strategy amid trade tensions with the US. Permanent full expensing is a significant capital allowance policy that could influence corporate investment decisions, cross-border tax planning, and Canada's competitiveness versus the US on business tax incentives. This connects to Canada's broader efforts to diversify its economy and attract investment amid the ongoing US-Canada trade friction. ## Related Context This development sits alongside other Canadian economic policy shifts including the Canada Sovereign Wealth Fund, bank capital requirement easing, and Mark Carney's foreign policy realignment, all part of a broader strategy to strengthen Canadian economic resilience amid US trade pressure.