Canadian Software & Technology Industry Report
Whitehorn Capital's Canadian Software & Technology Industry Report presents performance trends, economic drivers, and transaction activity observed during the past quarter nationwide.
PUBLIC MARKET DASHBOARD
As of September 30, 2026.
Write it off.All of it.
Ottawa is proposing a tax change called the Productivity Mega Deduction. It would change how quickly your software & tech business can deduct the cost of new equipment: instead of claiming a bit each year for a decade, you would claim the whole thing in year one. Here is what it would mean for your business.
Not to be confused with the Productivity Super-Deduction, the narrower measure from Budget 2025. The Mega Deduction is the bigger one, and it replaces most of what the Super-Deduction did.
What you could write off in year one on a $1 million equipment
General equipment, first taxation year
Example uses general equipment written down at 20% a year. The figure for your own purchase depends on the type of asset. Confirm it with your accountant.
The short version
When you buy equipment today for your software or tech business, you write off a portion of the cost each year over many years. Under the proposal you would write off the entire cost in the year you start using it, so your tax bill drops sharply in the year you invest.
Prime Minister Carney announced the Productivity Mega Deduction on 15 September 2026 and the Department of Finance released draft legislation the same day. It is not law yet.
You would not get more. You would get it sooner.
This is the part people misread. You always got to deduct the full cost of an equipment eventually. What changes is the timing, and in a business, cash today is worth considerably more than the same cash spread over ten years.
Share of business purchases that would qualify for a full first-year write-off
Before the change, and under the proposal
Source: Department of Finance Canada backgrounder, 15 September 2026.
What qualifies
Most things a business buys would be covered. The exclusions are the shorter list.
Write it off in full
- Machinery and equipment
- Software and computers
- Vehicles, trucks and trailers
- Oil and gas pipelines
- Mining property
- Fibre-optic cable and data networks
- Aircraft, rail track, bridges and roads
- Patents and research spending
Written off slowly, as before
- Buildings
- Goodwill and licences when you buy a business
- Natural gas pipelines running into homes
- Passenger cars, taxis, and rental or leased vehicles, unless the vehicle is new and was assembled in Canada
- Quarries, and timber and cutting rights
Eligibility is set by the tax category an asset falls into, not by what you call it. Two similar-looking purchases can land on opposite sides of this line, so check each one.
What it is worth
Take a company buying a $1 million machine that goes into service this year. British Columbia, Saskatchewan and Manitoba all tax general business income at the same combined rate, so they are shown together. Alberta is lower.
First-year tax saved on a $1 million equipment or software
Combined federal and provincial rates on general business income, 2026
23% combined rate
27% combined rate
Swipe to see both
Illustrative. Assumes the business has enough taxable profit to use the full deduction, and general equipment written down at 20% a year. Saskatchewan taxes income at a lower combined rate of 25%, so a Saskatchewan businesswould save about $250,000 rather than $270,000. Income taxed at the small business rate produces a smaller saving. Provinces must also adopt the federal change for the provincial share to apply.
Financing
We summarized select Canadian tech financing transactions announced this past quarter:
Select Merger & Acquisition Transactions
Notable Canadian software & technology transactions in Q3 2026.
Whitehorn Capital Q3 2026 Canadian Software & Tech M&A Tracker
Software and technology merger and acquisition activity with a Canadian acquirer or target, announced between July 1 and September 30, 2026. Filter by sector, province, month or direction of capital, and select any transaction to read the detail.
Transactions by sector
Select a sector to filter the table below.
Direction of capital
Domestic deals have a Canadian acquirer and target. Inbound means a foreign acquirer of a Canadian business; outbound means a Canadian acquirer abroad.
Compiled by Whitehorn Capital as of September 30, 2026, from public announcements and transaction databases. Provided for information only and believed accurate at the time of publication.
Let's talk about
your next move.
Whitehorn Capital provides sale of business, financing and merger & acquisition advisory services to Western Canadian software and technology companies. To discuss this quarter's findings, reach our team below.
All financial data has been sourced from YCharts. This report is prepared by Whitehorn Capital for informational purposes only and does not constitute investment, legal, or tax advice. Figures may include forecasts and are subject to change without notice.
