Province Announces $8 Billion Ontario Competitiveness Tax Cut to Support Investment and Create 30,000 Jobs

Ontario is delivering on its commitment to stand up to tariffs and build the most competitive economy in the G7 through the Ontario Competitiveness Tax Cut, part of Ontario’s multi-year Tax Action Plan. This $8 billion provincial tax relief measure, which is the provincial component of the federally announced Productivity Mega Deduction, would lower the cost of business investment by permanently allowing businesses to immediately write off 100 per cent of the value of a wide range of assets. This measure is estimated to support the creation of 30,000 new jobs in Ontario by providing over $8 billion in additional provincial tax relief over the next five years. This, along with previously announced tax measures, brings Ontario’s marginal effective tax rate to just 3.6 per cent, well below the average rate in the United States, the OECD and the G7.

“In the face of U.S. tariffs, our government is helping Ontario businesses invest, grow and remain competitive on the global stage by lowering the cost of investing and doing business,” said Peter Bethlenfalvy, Minister of Finance. “The Ontario Competitiveness Tax Cut will be a gamechanger for business investment in the province, supporting 30,000 new jobs as we continue working to make Ontario the most competitive business environment in the G7.”

Following the passage of federal legislation, eligible businesses would be able to immediately write off 100 per cent of the value of a wide range of capital investments, including fibre-optic cable, software, aircraft and certain vehicles, patents, rail track, machinery and equipment, bridges and roads. These new measures are estimated to reduce Ontario’s Marginal Effective Tax Rate (METR) by 6.1 percentage points. In 2026, Ontario’s METR is lower than the U.S. with an average METR of 16.9 per cent, the OECD at 19.0 per cent, and the G7 at 26.0 per cent, as reported by the Department of Finance Canada.

The Ontario Competitiveness Tax Cut, which parallels the proposed federal Productivity Mega Deduction, is estimated to attract at least $11 billion in additional capital investment to the province, creating 30,000 new jobs and adding $6 billion to gross domestic product (GDP).