Canada Makes Expensing Permanent and Pursues Airport Concessions
Prime Minister Mark Carney has made Canada's expanded immediate-expensing regime permanent and broadened it from about 15% of depreciable business assets to more than 65%, while separately pursuing long-term private operating concessions for Toronto, Vancouver, Montreal and Calgary airports.
The two policies attack different capital constraints. The Productivity Mega Deduction accelerates tax deductions on new investment and lowers the after-tax hurdle rate. The airport proposal would change the form of the operating right over mature federal infrastructure while Ottawa retains the underlying land and assets.
The tax measure has a quantified fiscal price. The government estimates the broader deduction will cost about C$36 billion over five years and cut Canada's marginal effective tax rate on new business investment to 6.4%. Permanence matters because it turns a temporary incentive into an ongoing rule for eligible investment rather than a deadline that simply pulls projects forward.
Private capital was already allowed inside the airport-authority model
The airport starting point is more important than the word "private" suggests. Toronto, Vancouver, Montreal and Calgary are federally owned but operated by independent, private not-for-profit airport authorities under long-term leases. Transport Canada's March 2025 policy already allowed those authorities to attract private capital through structures such as subleases, terminal operations and subsidiaries while preserving the not-for-profit authority model.
September 15 goes further. The government is now pursuing long-term concessions for private operators at the four largest airports, while retaining federal ownership of the land and assets. That is a potential conversion of the operating right, not Canada's first opening of airport infrastructure to private money. The 2026 Spring Economic Update had already said alternative ownership models were under consideration.
The economics remain undefined because the concession contracts do not yet exist publicly. Their length, permitted airport and passenger charges, capital-expenditure obligations, revenue sharing, treatment of existing airport-authority debt and governance will determine what investors are actually buying and how much monopoly cash flow remains available after reinvestment.
A concession can create value by improving operations and financing expansion. It can also simply capitalise future user charges into an upfront payment. Without the contract, those outcomes cannot be distinguished.
Permanent expensing is now a defined cost-of-capital rule with a C$36 billion five-year fiscal price. The airport plan is still a contract-design question. It could create a new long-duration infrastructure asset class, but no investor can price the return until Ottawa shows how existing airport-authority rights, debt and investment obligations would be converted into concession economics.
Sources
- Government of Canada - Productivity Mega Deduction
- Transport Canada - 2025 policy statement on private investment at National Airports System airports
- Transport Canada - Airports owned by Transport Canada and leased to airport authorities
- Government of Canada - Spring Economic Update 2026
- AP - Canada seeks private investors for four airports