Prime Minister Mark Carney announced Canada will allow immediate expensing for most new capital investment, a policy the government estimates will cost C$36 billion over five years. The move comes as the Canadian dollar falls for a fifth straight day against a broadly stronger US dollar.
Carney unveiled the expensing change as part of an investment summit he is hosting in Canada this week, which has already produced a series of spending announcements, including one on a data centre a day earlier. The policy lets companies deduct the cost of most new capital investment immediately rather than over several years.
The Canadian dollar has fallen for a fifth consecutive day while the US dollar rises broadly on an expected Fed rate hike.
A nice carrot for investment
Getting deductions back into corporate coffers more quickly compounds the time value of money for companies weighing new spending. Canada already introduced immediate expensing for machinery in 2018 and added building materials and clean energy equipment last year, alongside some accelerated depreciation. The new measure extends the approach to most new capital investment and mirrors what the Trump administration did in the Big, Beautiful Bill.
The actual impact will depend on company specifics, but the signaling is strong. The government put a C$36 billion price tag over five years on the measure, a cost that shifts to the corporate side of the ledger.
Inflation remains the bigger threat
Inflation tied to the war in Iran is a larger problem facing Canada and much of the world. The market is pricing in five Bank of Canada rate hikes through 2027, a headwind for a struggling housing sector and for corporate borrowing.
Source: Investinglive RSS Breaking News Feed
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