TORONTO
Ontario will match a federal "productivity mega deduction" business tax break in its fall economic statement on Thursday, a move the province says will attract billions in investment despite a hefty price tag.
Finance Minister Peter Bethlenfalvy confirmed the measure on Wednesday, having signalled it was imminent in a speech last week.
"It's absolutely additive. It'll boost our economy," Bethlenfalvy told reporters at the MaRS Discovery District in Toronto. "Investors are looking to grow with Canada and Ontario. This is an added feature that gives them the signal that this is the place and time to invest."
The policy, which the province is calling the Ontario Competitiveness Tax Cut, will allow companies to immediately deduct the cost of capital expenses like new machinery or software instead of doing so gradually over time.
The accelerated write-offs are meant to lower tax bills in the short term and encourage companies to invest and expand in Canada.
Ontario's matching measure is expected to cost the provincial treasury $8 billion over the next five years. Combined with previously announced deduction rules, the total cost to Ontario would be $12 billion.
Bethlenfalvy said the new tax breaks will not worsen the province's books, which already project a $13.8 billion deficit for 2026-27. He warned last week that red ink is needed as the province faces economic uncertainty.
The government estimates the tax changes will attract an estimated $11 billion in new investment to Ontario and create 30,000 jobs.
This comes as U.S. tariffs target Ontario's auto, steel and manufacturing sectors. e2gold.ca reported in October that the federal and provincial governments pledged $9 billion for industries hit by those tariffs.
At the federal level, Prime Minister Mark Carney unveiled the proposed "productivity mega deduction" at a global investment summit in Toronto last month, building on a similar "super deduction" announced last year.
Ottawa estimates the new federal deduction would cost it $36 billion in the first five years. It is expected to be included in the federal budget, which Finance Minister François-Philippe Champagne is set to deliver on Nov. 5.
Giles Gherson, president and CEO of the Toronto Region Board of Trade, stood alongside Bethlenfalvy for the announcement.
"It's a double boost for businesses answering the call to invest in this province's growth," Gherson said.
He noted the impact of U.S. tariffs but added that even before President Donald Trump, Canada struggled to attract investors, suffering a $1-trillion net outflow of investment from 2015 to 2024.
"The mega deduction would be a game changer to help bring the trillion dollars back home over the next decade," he said.
The province expects the tax cut to add $6 billion to Ontario's gross domestic product as a result of higher capital investment.
Both the federal and provincial changes will require amendments to tax law. Bethlenfalvy's fall economic statement on Thursday will presumably come with the necessary provincial legislation.
The statement will also provide an update on the province's finances. e2gold.ca reported last week that the update would outline the next phase of the province's plan amid a slower economy.
This story was written by the e2gold.ca newsroom from reporting by The Globe and Mail and The Logic. Quotes are checked word for word against that reporting.