Canada

Canada

Introduces new tax incentives and investment facilitation mechanisms

17 Nov 2025

 On 4 November 2025, the Government of Canada presented Budget 2025, which was subsequently passed by Parliament on 17 November 2025. It includes measures aimed at enabling CAD 1 trillion (approximately $734 billion) in total investment over five years, supported by approximately CAD 280 billion (approximately $200 billion) in public capital investment and incentives designed to crowd in private investment.

Key measures include:

  • New tax incentives and accelerated depreciation: Introduction of a Productivity Super-Deduction providing immediate expensing and accelerated depreciation for manufacturing and processing equipment, clean energy and zero-emission technologies, productivity-enhancing and research and development (R&D) assets, new manufacturing buildings and low-carbon liquefied natural gas facilities.
  • Expanded R&D tax incentives: Budget 2025 strengthens the Scientific Research and Experimental Development (SR&ED) programme by expanding eligibility, restoring capital expenditure support and increasing the enhanced credit limit to CAD 6 million (approximately $4.4 million).
  • Investment facilitation for major projects: Establishment of a Major Projects Office (MPO) as a single-window mechanism to fast-track large-scale projects in energy, transportation, trade and infrastructure.

 

Nature of measure:
  • Facilitation
  • Incentives
Type:
  • Promotion and facilitation (Investment facilitation , Investment incentives)
Industry:
  • Manufacturing
  • Services (Electricity, gas, steam and air conditioning supply, Water supply, sewerage, waste management and remediation activities, Construction, Transportation and storage, Telecommunications, Scientific research and development, Other professional, scientific and technical activities)
Inward FDI:
Yes
Outward FDI:
No
Sources: