Source: View source · Reuters · via @u/joe4942 · reddit

The post

TORONTO, Sept 15 (Reuters) - Canada will let businesses immediately write off the cost of most new capital investments for tax purposes, Prime Minister Mark Carney said on Tuesday, unveiling a measure aimed at strengthening the economy and drawing more foreign investment.

Carney is welcoming dozens of global investors to Toronto this week, hoping to lure investments for more than 160 projects that he says are key to steering Canada's economy through a trade war with the United States.

Carney said two-thirds of all assets would now qualify for the benefit, citing sectors such as mining, oil and gas pipelines, and software.

"The effect is straightforward. When you invest in Canada, you can deduct substantially more of that investment immediately," he said at the summit.

As a result, Canada's marginal effective tax rate on new business investment will fall from roughly 13% to 6.4%, the lowest of any major economy in the world and less than half the rate in the United States, the government said in a statement.

The new measure, called the Productivity Mega Deduction, expands a previous tax incentive introduced in the budget a year ago and makes it permanent.

Why it's worth your time

Canada will let businesses write off most new capital spending immediately and permanently, taking the marginal effective tax rate on new business investment from about 13% to 6.4% — by Ottawa's own claim the lowest of any major economy and less than half the US rate. Two-thirds of assets qualify, with mining and oil-and-gas pipelines named, which changes the return on capital for Canadian resource projects on a multi-year basis rather than for one budget cycle.