The Mega Deduction in Ontario
Ontario corporations pay a combined 11.2% on small business income (federal 9% + provincial 2.2%) and 26.5% at the general rate (15% + 11.5%). Every dollar deducted in year one under the Mega Deduction reduces tax by that percentage.
Ontario's small business rate drops to 2.2% effective July 1, 2026 (from 3.2%). Corporations with a fiscal year straddling that date get a blended rate.
Calculate a purchase in Ontario
Tax reduction on a $100,000 purchase, by asset class
| Asset | Class | Old year-one deduction | Tax reduction, small business | Tax reduction, general |
|---|---|---|---|---|
| Computer equipment | 50 | $27,500 | $11,200 | $26,500 |
| Software | 12 / 10 | $50,000 | $11,200 | $26,500 |
| Manufacturing and processing equipment | 43 / 53 | $15,000 | $11,200 | $26,500 |
| General equipment, tools and furniture | 8 | $10,000 | $11,200 | $26,500 |
| Commercial vehicles (vans, pickups, work trucks) | 10 | $15,000 | $11,200 | $26,500 |
| Heavy trucks and tractors | 16 | $20,000 | $11,200 | $26,500 |
| Zero-emission vehicles | 54 / 55 | $15,000 | $11,200 | $26,500 |
| Patents, licences and acquired IP | 44 | $12,500 | $11,200 | $26,500 |
All asset types in Ontario
- Computer equipment
- Software
- Manufacturing and processing equipment
- General equipment, tools and furniture
- Commercial vehicles (vans, pickups, work trucks)
- Heavy trucks and tractors
- Zero-emission vehicles
- Patents, licences and acquired IP
- Clean energy and energy conservation equipment
- Data network infrastructure
- Farm machinery
- Construction and contractor equipment
- Medical and dental equipment
- Restaurant and hospitality equipment
- Media production equipment
- Aircraft
- Buildings and additions
- Goodwill, franchises and licences (Class 14.1)
- Passenger vehicles (Class 10.1)
Free: the Year-End Purchase Checklist (PDF)
One page. What qualifies, what does not, the 'available for use' trap, and the seven questions to ask your accountant before you buy. No spam, unsubscribe any time.
The Mega Deduction Year-End Playbook
Everything you need to walk into your accountant's office with a plan instead of a question. Built for owner-managed Canadian businesses that expect a profitable 2026.
- Excel purchase planner with every province's rates and every CCA class pre-loaded. Model up to 12 purchases, see the year-one deduction, tax reduction and 10-year comparison for each.
- The 41-page Playbook (PDF): eligibility by asset class, the exclusions, 'available for use' rules, financing vs. leasing, recapture risk, CCPC vs. sole proprietor, and worked examples for 12 industries.
- Accountant brief template (Word): a one-page memo you fill in and send so your accountant can confirm the plan in one email instead of a meeting.
- 30-day action plan for purchases that must be delivered and installed before your fiscal year-end.
$97$47 CAD one-time, instant download
Secure checkout by Stripe. Files delivered immediately after payment. Not tax advice; every plan should be confirmed by your accountant.