Ontario’s 2026 fall economic statement, released October 29, makes 100% immediate write-offs permanent for most equipment and machinery, while keeping most buildings out. It also sets hard dates, March 31, 2027 and the end of 2029 among them, that turn an owner’s construction schedule into a tax document.
What happened
Ontario released its 2026 Economic Outlook and Fiscal Review on October 29. For owners, the core is the Ontario Competitiveness Tax Cut, which matches the federal capital investment write-offs and takes effect once the corresponding federal legislation passes. The province values it at $8 billion, and at more than $12 billion over five years when combined with the write-offs in Budget 2026. The main pieces:
- Equipment: a permanent 100% write-off in year one for most eligible depreciable property acquired on or after September 15, 2026, including manufacturing and processing (M&P) machinery and equipment, certain clean technology, zero-emission vehicles and productivity-enhancing assets.
- Buildings: buildings and building improvements are generally excluded. The exception is M&P buildings, which get a 100% write-off that phases out after 2029.
- Everything else: most other depreciable assets get a first-year deduction of up to three times the regular amount, also phasing out after 2029.
- Rental housing: the depreciation rate for purpose-built rental rises from 4% to 10% for construction completed before January 1, 2036.
On housing, the enhanced HST relief of up to $130,000 continues for new homes bought from a builder between April 1, 2026 and March 31, 2027. After that, the existing Ontario new housing rebate and rental property rebate end for transactions from April 1, 2027. They are grandfathered where the purchase agreement is signed, or construction or substantial renovation begins, on or before March 31, 2027, and the HST becomes payable by December 31, 2035.
View the data
| Date | What it governs |
|---|---|
| Sept 15, 2026 | Assets acquired on or after this date qualify for the new write-offs |
| Mar 31, 2027 | Last day to sign a purchase agreement or begin construction to keep the HST new housing and rental rebates |
| After 2029 | M&P building write-off and the three-times first-year deduction begin to phase out |
| Dec 31, 2035 | HST must be payable on grandfathered housing |
| Before Jan 1, 2036 | Purpose-built rental must be complete to get the 10% rate |
The fiscal picture moved the other way. The 2026–27 deficit is now projected at $16.9 billion, up from $13.8 billion in the spring budget, and the province now expects a $6.7 billion deficit in 2028–29, where the budget had a small surplus. Real GDP growth for 2026 was cut to 0.5%. The $210 billion capital plan continues.
View the data
| Fiscal year | Budget 2026 | Fall statement 2026 |
|---|---|---|
| 2026–27 | ($13.8B) | ($16.9B) |
| 2027–28 | ($6.1B) | ($12.7B) |
| 2028–29 | $0.6B | ($6.7B) |
What it means for owners
Your cost breakdown now decides your tax treatment. Equipment can be written off in year one; the building around it generally cannot. If a contractor’s schedule of values lumps process equipment, specialized electrical and the building shell into one line, your tax adviser is left to reverse-engineer the split from invoices. Owners who set up their cost codes to separate equipment from building work before tender will claim more, with less argument.
Dates are now schedule milestones. A residential developer counting on the HST grandfathering has five months to start construction, and should confirm with counsel what “begins” means before assuming a ceremonial shovel counts. A manufacturer planning a new M&P building has until the end of 2029 before the write-off starts to shrink, which is not much float for a project still in design. A multi-phase rental program that lets its last phase slip past 2035 drops from a 10% rate back to 4%. These belong in the baseline, with float tracked like any other contractual date.
The contrarian point: a write-off is a timing benefit, not a discount. Deducting 100% in year one moves tax forward; it does not lower what the asset costs. Rushing procurement to hit a date can easily cost more in premiums, change orders and rework than the time value of the deduction. On programs we’ve supported, the expensive mistakes came from buying early without a firm design, not from buying late.
Public owners should expect tighter gates. With deficits wider and the province adding to its reserves, new capital asks will face harder questions even as the existing plan proceeds. Clean stage-gate evidence and a credible estimate will matter more in the next approval cycle.
What to do now
- Map your capital plan by asset class. Ask your tax adviser to sort your 2027–2030 spending into equipment, M&P building, rental and other buildings, and flag anything acquired on or after September 15, 2026.
- Split equipment from building in tenders. Require bidders to price major equipment, process systems and building work as separate lines, and keep that split in progress billing and change orders.
- Put the tax dates in the master schedule. Add March 31, 2027, the end of 2029 and December 31, 2035 as milestones where they apply, and report float against them monthly.
- Document construction start now. If you rely on the HST grandfathering, assemble the evidence (contracts, permits, site records) as you go, and get legal advice on what qualifies.
- Re-check after the federal budget. Ottawa tables its budget on November 5, and Ontario’s measures depend on the federal legislation. Confirm the details before you commit.
This article is general information, not tax or legal advice. Confirm eligibility with your tax adviser.
FAQ
Does Ontario’s immediate write-off apply to buildings?
Generally no. Buildings and building improvements are excluded, except manufacturing and processing buildings, which get a 100% write-off that phases out after 2029. Purpose-built rental gets a faster 10% depreciation rate if completed before January 1, 2036.
When does the Ontario HST new housing rebate end?
For transactions from April 1, 2027. It continues where the purchase agreement is signed, or construction begins, on or before March 31, 2027, and the HST becomes payable by December 31, 2035.
The bottom line
The fall statement rewards owners who know what they are buying, when it goes into service and how it is coded. That is a project controls job before it is a tax job. Want a second look at how your capital plan lines up with the new dates? Book a 30-minute call.
Sources: Government of Ontario, 2026 Ontario Economic Outlook and Fiscal Review (October 29, 2026); Government of Ontario, 2026 Fall Statement, Annex: Details of Tax Measures (October 29, 2026); Doane Grant Thornton, Ontario Fall Economic Statement 2026; KRP, 2026 Ontario Fall Economic Statement offers tax cut for business, projects higher deficits; Wire Service Canada, Ontario unveils 2026 Fall Economic Statement (October 30, 2026); BNN Bloomberg / The Canadian Press, Ontario matches feds’ tax perk for businesses on capital investments (October 28, 2026); Horizon Weekly, Ottawa to table 2026 federal budget on November 5. Cover graphic: Benjamin R. Consulting, using Government of Ontario data.