Canada Strengthens Investment Incentives to Drive Economic Growth, BMO Says

12:31 PM EDT, 09/15/2026 (MT Newswires) -- Canadian Prime Minister Mark Carney announced new measures at the country's first investment summit to spur investment, enhance productivity and bolster the domestic economy amid continuing uncertainty over trade relations with the United States, according to BMO Capital Markets in a note Tuesday. The package features a new "Productivity Mega Deduction" that would allow businesses to immediately expense up to two-thirds of capital investments, lowering Canada's marginal effective tax rate on new investment to one of the lowest levels in the G7 at about 6.4% from 13%, wrote BMO. The government also intends to speed up approvals for major projects through the Build Canada Strong Act, targeting a "one project, one review, one year" process, while strengthening tax certainty to encourage large-scale investment, said the bank. "The investment tax changes announced today are the clearest signal to date that the Government of Canada is focused on pushing the economy forward beyond the ongoing trade uncertainty," wrote BMO Senior Economists Robert Kavcic and Shelly Kaushik. Canada aims to attract CA$1 trillion in total investment over the next five years. Canada's resource wealth, stable political environment, sound fiscal position, highly skilled workforce and resilient financial sector position the country well to attract long-term capital, added BMO. The investment pipeline is already sizeable, with about CA$500 billion worth of projects underway or planned across energy, infrastructure, critical minerals, transportation and manufacturing sectors.