The Canadian federal government has unveiled the Productivity Mega Deduction, a tax policy proposal permitting companies to deduct the complete purchase price of qualifying business aircraft during the initial year they enter service. Spearheaded as a major policy success by the Canadian Business Aviation Association (CBAA), the rule replaces standard multi-year tax depreciation schedules. To qualify, aircraft must be purchased on or after September 15, 2026, and be fully operational for commercial use within the tax year, with second-hand aircraft remaining eligible provided they meet specific arm’s-length ownership criteria.

Industry leadership highlighted the measure as a critical milestone in strengthening national economic competitiveness and encouraging capital investments across the aviation sector. Association representatives noted that including corporate aircraft within the broader economic initiative demonstrates the impact of unified industry advocacy. Moving forward, the trade group plans to track the regulatory rollout of the provision and maintain active engagement with federal policymakers to protect the interests of Canadian operators, manufacturers and service providers.