One Comment About Taxation – Is the “Mega Productivity Deduction” Really “Mega”??

Walk down any grocery aisle and you’ll find a paper towel roll labelled “Mega” sitting next to a “Regular” one – same width, often similar sheet count, just marketed as though it were categorically different. That’s a communications and marketing strategy, not a better product, and it works because most shoppers grab and go rather than checking the fine print. A communications strategy is not a policy. It’s a wrapper, and the only way to tell the two apart is to stop reading the label and start reading the contents.

 

On September 15, the Department of Finance released a backgrounder and companion draft legislation for something it has branded the “Productivity Mega Deduction”. Worth noting up front: the word “Mega” appears nowhere in the actual draft legislative amendments. The statute refers only to “immediate expensing property.”

 

The term “mega” is symptomatic of a pattern where consequential tax policy gets announced and branded through press release – a “comms strategy” – rather than through Parliament, and the branding regularly outruns the substance. The rebranding of the long-standing GST credit into the “Groceries and Essentials Benefit ” is another ridiculous example of the same instinct. It would be refreshing to see less branding, fewer cutesy names, and more focus on sound tax policy. Canadians should demand the same instead of taking a backgrounder’s framing at face value.

 

Strip the label off and there is a real, substantive measure underneath – one that deserves to be judged on its mechanics, not its marketing.

 

The new measure builds on the Productivity Super-Deduction from Budget 2025 – another cutesy name – which provided immediate expensing on a very limited category of assets. The new measure significantly expands the category of assets eligible for immediate expensing and makes it permanent rather than temporary. Finance estimates the incremental fiscal cost of this measure at $36 billion over five years, starting in 2026-27.

 

Mechanically, immediate expensing lets a business deduct the full capital cost of eligible property in the year it becomes available for use, instead of amortizing its cost over a number of years on a declining-balance basis. The measure applies to property acquired on or after September 15, 2026. Excluded categories include most buildings, franchises, licences, goodwill, regulated pipelines, and specified mineral and timber interests. Used property only qualifies if neither the taxpayer nor a non-arm’s length person owned it before, and individuals and partnerships with individual members can’t use the measure to create or increase a loss.

 

What if the business financed the acquisition with debt? Combine immediate expensing with ordinary interest deductibility, and a business can write off the entire cost of an asset immediately while continuing to deduct the interest on the debt used to finance it.  That interaction can push the effective tax burden on an investment below zero. Finance’s own modeling shows just how far the resulting tax burden can fall: manufacturing at -1.2 per cent, transportation at -2.3 per cent, agriculture at -6.0 per cent, compared with 9.9 per cent for services and 19.3 per cent for retail trade. The largest gains accrue to more capital-intensive Canadian businesses, while services businesses – which represent roughly 77 per cent of Canadian businesses and 75 per cent of GDP – receive a materially smaller benefit.

 

A few restrictions in the fine print deserve more attention than they’re getting. The treatment of a later disposition, what happens when a taxpayer deliberately claims less than 100 per cent, and differences between federal and provincial treatment can materially change the result. A 100 per cent write-off sounds simple. The planning around whether, when and where to claim it is not.

 

Then there’s the question the backgrounder never asks directly: why not just cut the corporate rate instead? As economist Jack Mintz calculates in his Financial Post column last week, Finance’s own $36-billion, five-year cost estimate is roughly equivalent to a 0.9-percentage-point cut to the federal corporate rate. Rather than favouring businesses making qualifying capital investments, a general rate cut would apply broadly across profitable corporate activity. It’s a legitimate alternative that deserves consideration.

 

Mintz reaches a harsher verdict on the measure overall, arguing it fails the tests of efficiency, fairness and simplicity, and pointing to Michael Wilson’s 1985 budget as proof Canada has scaled back “mega” preferences for lower rates before, without losing revenue. I agree.

 

The Parliamentary Budget Officer’s own investment multiplier analysis, published five days before the Mega Deduction announcement, gives reason for skepticism. Assessing Budget 2025’s broader $41.3-billion investment package across five program areas, the PBO found tax measures – including immediate expensing – generate the second-lowest return, ahead of only industrial development programs. On the PBO’s model, tax measures produce only 70 to 80 cents of additional real GDP for every dollar after five years, depending on the monetary-policy assumption. That is hardly an obvious economic home run.

 

None of this means immediate expensing is worthless. Profitable, capital-intensive businesses – manufacturers, farming, energy and resource companies, transportation and logistics – will genuinely benefit, and accelerating write-offs is a defensible lever among several. But “defensible” and “mega” aren’t the same word, and Canadians deserve tax policy explained for what it is, not sold through a backgrounder headline.

 

Pick that roll up and it may still be a perfectly decent roll of paper towels. It just isn’t necessarily ‘Mega’ because someone printed the word on the wrapper.

 

The same is true here. Permanent immediate expensing is real tax policy, with a real $36-billion price tag and real advantages for businesses that can use it. But it also deliberately favours some investments over others. Canadians should judge that policy choice on its merits, not by the adjective Finance put in the backgrounder.

 

Governments reach for words like ‘Mega’ because ordinary tax policy sounds more impressive with better packaging. Canadians would be better served by less marketing and more debate about what is actually inside.

 

One Comment About Leadership – Leaders, Don’t Spin It, Don’t Exaggerate It

 

Every organization has its own version of the GDP headline, or the government’s “mega” productivity deduction branding, the quarterly update, the all-hands deck, the investor call, dressed up to sound bigger than what’s actually underneath. The temptation is always the same – take the one number or the one label that flatters you, put it on the slide in 80-point font, and hope nobody asks about the internals.

 

Transparency is the harder path, and it’s the only one that actually works over time. Give people revenue growth without margin compression, client wins without the renewals you lost, momentum without the team that’s quietly burning out to produce it – and you haven’t lied exactly, but you’ve told a less than full story instead of the truth. The gap between the two doesn’t disappear. It moves downstream, to the next quarter, the next board meeting, the next round of “why didn’t anyone tell us.”

 

Authenticity costs you something upfront – a harder conversation, a less impressive slide, a moment where you have to sit with people’s disappointment instead of their applause. But it’s the only version of credibility that survives contact with time. Say it straight once, and people learn they can take your next number at face value without doing their own discounting first. Round up once and get caught, and every number after that gets discounted before anyone’s heard your reasoning – an expensive tax to keep paying for one comfortable meeting.

 

The leaders worth following default to the whole picture, including the part that undercuts the headline, before anyone else has to surface it for them. It’s a smaller win in the room and a much larger one over every room that follows.

 

Trust compounds the same way culture does – one honest update at a time, or one exaggerated one at a time. You don’t get to choose which direction it’s compounding in after the fact.

 

One Comment About Economics / Politics  – Canada’s Economy – Don’t Accept the Spin

 

On Monday September 21, 2026, Bank of Canada governor Tiff Macklem told an audience in Halifax that Canada’s Q4 GDP growth could be roughly halved to below 1%, driven by the ongoing trade war and the Iran conflict pushing oil toward US$100 a barrel. In the same speech, he noted businesses have adapted to the U.S. Section 232 tariffs and that Q2 growth hit 3.3% annualized – the same number the Liberal Party spent weeks turning into a victory lap.

 

That’s the part worth sitting with. A single strong quarter, driven substantially by exporters scrambling to diversify away from a hostile U.S. trading relationship, got dressed up as proof of a durable recovery. The governor himself just conceded it wasn’t one. I flagged the same gap in the September 9, 2026 edition of this Newsletter – not because the call was hard to make, but because the labour market data released that same week already told a different story than the headline GDP figure: 42,000 jobs lost in August, wage growth at its slowest pace since 2017, three straight months of public-sector losses. None of that needed a central bank governor to confirm it twelve days later. It needed someone to read past the first paragraph of the press release.

 

This is the pattern to watch for, and it isn’t unique to this government or this number. A favourable headline stat gets amplified by whoever benefits from the story it tells, while the underlying internals – the ones that actually determine whether a trend holds – get quietly ignored until they can’t be.

 

Macklem’s own hedge is instructive here too: officials say tariffs won’t have a large direct effect on the economy, then in the next breath put Q4 growth at roughly half its prior pace. That’s not a contradiction – dig into the speech and the halving gets attributed to businesses delaying investment and hiring under trade-policy uncertainty, plus a separate hit from Middle East-driven oil prices. But notice the move: qualify the word “direct” precisely enough, and you can deliver a sharply worse number while still sounding reassuring. It’s the same instinct as the “plan is working” line – say something technically defensible, count on most people not to parse it closely.

 

The lesson isn’t “don’t trust GDP data.” It’s don’t trust a headline number the moment someone has an incentive to stop the story there.

 

Bonus Comment – Attributed To Warren Buffett – Legendary American Investor – About Compounding Trust

 

“It takes 20 years to build a reputation and five minutes to ruin it.”

 

Exactly. Spin buys you one good meeting; but it costs you the compounding trust that took years to build.

 

I hope today’s newsletter has been thought-provoking for you.

 

As many of you know, I’m passionate about helping people make better decisions – whether in tax, leadership, or business. If you’d like to go deeper on those topics, my recently released book, Making Life Less Taxing Version Two is now available and expands on many of the practical ideas I’ve written about over the years.

 

I’m also putting the finishing touches on my next book, Leadership Compounds: How Small Decisions Build Culture, Credibility, and Legacy. It explores a simple but powerful idea: leadership isn’t about grand gestures – it’s about the small, consistent decisions that compound over time.

 

For those interested in a more hands-on approach, I’ll soon be announcing a bespoke consulting initiative – The Acorn Growth Program – designed to help leaders and organizations grow intentionally, one small (but important) decision at a time. Feel free to reach out to me directly for more information.

 

And if you’re not already on my mailing list, feel free to sign up for my In the Mood Network newsletters to receive more content. No fluff – just practical insights on tax, leadership, and economic policy.

 

Thanks for reading. As always, I welcome your thoughts and feedback.

 

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