Paradise, Newfoundland and Labrador - Canada has what the world wants: abundant energy and critical minerals, the most educated workforce in the world, access to 1.5 billion consumers through our free trade agreements, and the strongest fiscal position in the G7. We are building on these advantages to make Canada the best place in the world to invest, build, and grow.
Today, the Honourable Joanne Thompson, Minister of Fisheries and Member of Parliament for St. John's East, visited Virtual Marine, a Paradise company that designs and builds simulators to train crews for emergencies at sea. During the visit, Minister Thompson highlighted how the federal government is helping Canadian businesses of all sizes invest in new equipment, adopt new technologies, expand their operations, and compete at home and around the world.
At the centre of this work is the new Productivity Mega Deduction, one of the most significant changes to Canada's business tax system in half a century. It will allow businesses to immediately deduct the full cost of a much broader range of investments, giving them a powerful incentive to build, expand, and create good jobs in communities across Canada.
This new tax incentive will increase the amount of assets eligible for immediate expensing from roughly 15% of assets to more than 65%, including software, research and development, computer equipment, fibre-optic cable, greenhouses, aircraft and vehicles, patents, rail track, bridges, and roads.
The federal government is also making immediate expensing permanent, giving businesses the long-term certainty they need to make major investment decisions. Together, these changes will reduce the cost of investing in Canada and lower the marginal effective tax rate on new business investment 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.
In Newfoundland and Labrador, major projects like Churchill Falls, Bay du Nord, and expanding mines are moving forward, and the local companies that build, supply, and service them will need to grow too. The Productivity Mega Deduction helps them make those investments now, as these projects take shape. This will help local companies build a stronger, more resilient economy right here at home.
In an increasingly uncertain world, Canada is choosing to build. By cutting taxes on new investment and moving with speed and ambition, we are setting the conditions for a Canadian investment supercycle-one that will drive growth, productivity, and prosperity for generations.
