Carney offers airports and tax cut

Canada will seek private investment through long-term concessions to operate its four largest airports and will allow immediate expensing for most new capital investment, Prime Minister Mark Carney announced yesterday.

Speaking to investors at the Canada Investment Summit in Toronto, Carney said the measures were part of a goal “to catalyze $1 trillion of investment in Canada over the next five years, in energy, in transportation, in tech and data, in defence, and beyond.” The target is in Canadian dollars.

The prime minister described a world in which “economic integration has been weaponized: tariffs used as leverage, financial plumbing as coercion, supply chains as vulnerabilities to be exploited.” He said Canada’s aim was “to make Canada the most attractive place in the G7 to invest.”

Tax, approvals and airports

The first measure, which Carney called the Productivity Mega Deduction, takes effect immediately. He said two-thirds of all assets would qualify, including machinery, manufacturing equipment, software, patents, R&D, fibre, rail and pipelines.

According to Carney, the policy covers more than four times the capital assets previously eligible for immediate expensing. He said it would give Canada “the lowest marginal effective tax rate in the G7. That’s less than half the US rate, roughly one-third of the OECD average, and one-quarter of the G7 average.”

The second strand is a Build Canada Strong Act for projects and supply chains. “Our standard will be simple: one project, one review, one year,” Carney said.

On airports, he said the government would retain ownership of the underlying land and assets, while bringing in “new capital and expertise” to operations. Carney said the tens of billions of dollars raised would be reinvested in regional airports, local transport and a “sovereign broadband backbone” with more direct links to Europe and Asia.

Canadians would retain a stake in the value created through a new sovereign wealth fund, the Canada Strong Fund, which Carney said would also invest alongside private capital in nation-building projects.

Energy, defence and trade

Carney said 27 initiatives had been referred to the government’s Major Projects Office, representing C$500bn in new private investment opportunities. Plans he set out include a pipeline that would carry at least one million barrels of Alberta oil a day to Asian markets and doubling liquefied natural gas exports to 50 million tonnes a year by the end of the decade.

He pointed to last month’s agreement between Newfoundland and Labrador, Quebec, the federal government and the Innu Nation covering 14 gigawatts of hydro, wind and storage, which he called “the largest clean energy investment in North American history.”

On defence, Carney said the budget sets out a path to 4 per cent of GDP in total defence spending by 2030, and that a Defence Industrial Strategy would catalyse C$500bn of investment over the next decade.

He said Canada had signed more than 50 critical minerals agreements with more than 15 countries in the past year, unlocking C$20bn of investment, and more than 20 trade and security deals across five continents. He said Canada is the only non-European member of SAFE, the EU’s defence procurement initiative, and will begin talks with the EU next month on what Carney described as “a unique security and economic alliance.”

Addressing the United States, he said: “We will always be neighbours, and Canada will continue to be the US’s most important partner in many key areas.”

On the public finances, Carney said the government was cutting the civil service by 10 per cent and spending on consultants by 20 per cent, and was “on track to balance the operating budget next year, one year ahead of schedule.”

Carney also set out an AI for All strategy, under which every post-secondary student would be given access to a trusted AI agent.

The summit, the first of its kind, was announced by the prime minister’s office in April as a vehicle for attracting foreign direct investment in sectors including clean energy, critical minerals and AI. It follows moves by Ottawa to diversify trade away from the United States, and comes after the signing last year of a partnership between Make UK and Canadian manufacturers.

About the author

Paul Jones

Harvard alumni and former New York Times journalist. Editor of Business Matters for over 15 years, the UKs largest business magazine. I am also head of Capital Business Media’s automotive division working for clients such as Red Bull Racing, Honda, Aston Martin and Infiniti.

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