Canada Budget confirms permanent immediate-expensing proposal

The measure was first announced with draft legislative and regulatory proposals on 15 September. Budget 2026 lists those proposals among the previously announced measures the government intends to proceed with, subject to modifications resulting from consultation and deliberation. This is a material confirmation in the Budget, but it does not mean the deduction has been enacted.^[1][2]

Assets and timing

The proposal would allow the full cost of eligible property to be deducted in the year the asset becomes available for use. It would generally cover depreciable property acquired on or after 15 September 2026, while excluding Class 1 and 3 buildings, Classes 14 and 14.1 property such as franchises, licences and goodwill, Class 51 property, certain Class 10 and 10.1 vehicles, and property depreciated under Schedules V and VI of the Income Tax Regulations. Canadian development expenses incurred from that date would also qualify.^[2]

Restrictions remain important

Used property would qualify only where neither the taxpayer nor a non-arm's-length person previously owned it and it was not transferred on a tax-deferred rollover. Separate restrictions would prevent individuals and partnerships with individual members from using the measure to create or increase a loss. Assets outside the immediate-expensing proposal would remain within the accelerated first-year deduction where applicable.^[2]

Businesses planning Canadian capital expenditure should map each asset to its capital-cost-allowance class, acquisition date, available-for-use date, prior ownership and rollover history. They should keep the proposal separate from enacted capital-cost rules until Parliament passes implementing legislation, and reopen the analysis for any consultation changes, transitional wording or final regulations.^[1][2]