APAS welcomes proposed federal tax writeoff for farm equipment

Saskatchewan's general farm organization is welcoming a proposed federal tax measure that would let producers deduct the full cost of most new machinery and equipment in a single year.

The Agricultural Producers Association of Saskatchewan (APAS) said the Productivity Mega Deduction, announced by the federal government last week, matches its longstanding call for accelerated capital cost allowances on farm machinery, equipment and productivity-enhancing technology.

The proposed measure would permanently allow immediate expensing of most depreciable capital investments acquired on or after Sept. 15, 2026. Businesses could deduct the full cost in the year the asset becomes available for use, rather than depreciating it over many years under existing capital cost allowance rules.

"APAS asked for this, and the federal government has now proposed it," said APAS president Bill Prybylski. "For a capital-intensive industry like agriculture, allowing producers to immediately expense eligible investments can help farms modernize, improve productivity and remain competitive."

APAS expects eligibility to cover most conventional farm machinery, including tractors, combines, seeders and sprayers, subject to the final legislation and applicable tax rules.

The organization cited Department of Finance estimates showing the marginal effective tax rate on new investment in agriculture and fishing would fall from 7.6 per cent to minus 6.0 per cent under the proposal.

"For Saskatchewan producers facing high capital costs and intense international competition, policies that encourage investment can make a real difference," Prybylski said. "This is an important step toward strengthening farm productivity, competitiveness and Canada's long-term food security."

The measure is not yet law. Draft legislation has been released and must still receive parliamentary approval.

"APAS welcomes the direction of the proposal and will be watching the legislation closely to ensure the final measure works effectively for farmers and ranchers," Prybylski said.