Canadian construction stakeholders are praising the federal government’s announcement of a new Productivity Mega Deduction during the recent Canada Investment Summit, referring to the measure as “landmark” and hailing Prime Minister Mark Carney’s “bold” leadership in bringing 300 international capital investors to Toronto for the event.
But representatives from the Canadian Construction Association (CCA), the Progressive Contractors Association of Canada (PCA), LIUNA and other advocates suggested the government must follow through by creating the conditions to get projects moving.
At the close of the two-day conference, the government issued a release stating the summit had laid the foundation for new investment while accelerating existing negotiations, resulting in nearly $500 billion in new investment commitments to Canada.
Many were arranged before the summit by Canadian pension funds, banks and other investors.
Mechanical Contractors Association of Canada COO Ken Lancastle noted he had advocated for expansion of the government’s original Productivity Super Deduction earlier this year in a presentation to the Standing Committee on Finance to include construction and productivity-enhancing investments.
“This was one of the recommendations we really leaned into as a policy lever that the government could utilize to help unlock some of the industry’s potential, so that we can start building projects, the infrastructure, the built environment that we need,” he said.
“We’re shifting the conversation to, how can we be a more productive? How do we enhance productivity to allow our contractor members to build smarter and to build faster, to build more productively and to build more efficiently.”
‘Very good news’
CCA president Rodrigue Gilbert said his association had also been advocating for the new deduction.
“Investing in businesses is the key to succeed,” he said. “It’s overall very good news…our members will be happy.
“The concept they’re trying to do, it’s excellent.”
A federal statement explained the accelerated capital cost allowance measures announced in Budget 2025 reduced Canada’s marginal effective tax rate (METR) from 15.4 to 13.0 per cent, and the Productivity Mega Deduction will further reduce the METR to 6.4 per cent.
That compares with the U.S. METR of 16.9 per cent.
The reduction was “long overdue,” said Gilbert.
“Now we need to make sure the process follows.”
The government’s technical description indicated some classes of buildings do not qualify for the deduction. Gilbert said the CCA is still reviewing details.
PCA Ontario vice-president Karen Renkema commented in a statement, “We commend the prime minister for his leadership, his commitment to building a stronger Canada, and his willingness to embrace all innovative approaches. This is the bold, forward-looking leadership Canada needs to unlock its full potential.”
Compliance burden
To turn commitments into construction, Renkema said, the Carney government must avoid regulatory hurdles that make projects harder, slower or more expensive to build.
She cited the government’s clean-economy Investment Tax Credit with its prevailing-wage requirements as an example of an unwelcome compliance burden for constructors.
As well, she stated, Bill C-5, which streamlines federal approvals for projects designated as being in the national interest, should be simplified and should accelerate approvals for all viable projects.
A statement from Canada’s Building Trades Unions (CBTU) noted the $500 billion in new investment commitments is a “historic vote of confidence in Canada and an extraordinary opportunity to build our country.”
The Productivity Mega Deduction, the CBTU added, is “game-changing.”
“This is what nation-building looks like,” said CBTU executive director Sean Strickland.
“But if we are going to use public money to accelerate private investment, we must make sure Canadians see the full benefit. Companies taking advantage of these incentives should be required to meet specific labour conditions, including paying prevailing wages and require minimum apprenticeship hours.”
LIUNA international vice-president Joseph Mancinelli said in emailed comments that Labourers, Canada’s largest building trade union, welcomes the focus on attracting long-term investment into Canada.
“At a time of global economic uncertainty and intense competition for capital, Canada needs to be deliberate about creating the conditions for investment, accelerating major projects and turning opportunity into construction,” he stated.
But, he said the Carney government must also focus on a workforce strategy.
“That means continuing to invest in apprenticeship, training, upskilling and pathways into the skilled trades,” said Mancinelli.
Water Canada noted the prospectus published by the federal government for the summit included 167 investment-ready projects valued at an estimated $327 billion. The largest of eight sectors represented were minerals and metals (57), clean energy (31), and marine and port infrastructure along with advanced manufacturing (both 19).
The absence of housing was noted by Richard Lyall, president of the Residential Construction Council of Ontario.
The project investment goals of the Carney government are “wonderful,” he said, “but then I contrast that with the existing situation, where we have a real shortage of housing and a real shortage of skilled trades already.
“People forgot to say, do we have the people to do this, and can we house them.”
Canada Investment Summit: 167 Prospectus Projects
