Carney's Toronto Summit Rolls Out $36 Billion Tax Deduction as Banks Pledge $250 Billion, Even as U.S. States Retreat From Similar Data Center Breaks

Since Prime Minister Mark Carney opened Canada's first national investment summit in Toronto on Monday, September 14, pitching investors on $120 trillion in available global capital, the government has put actual numbers behind the sales pitch.

The centerpiece is something called the Productivity Mega Deduction, announced by Carney at the summit. It lets businesses immediately write off 100% of the cost of a new investment the year it goes into use, covering roughly 65% of capital assets, according to the Prime Minister's Office. That's up from about 15% of assets under the Productivity Super-Deduction Carney rolled out in Budget 2025.

The Department of Finance says the change will drop Canada's marginal effective tax rate on new business investment from roughly 13% to 6.4%, which the government calls the lowest of any major economy and less than half the U.S. rate. The catch: it isn't free. Finance Canada's own backgrounder puts the incremental fiscal cost at $36 billion over five years starting in 2026-27.

Ottawa is also fast-tracking the paperwork. Investors putting up $1 billion or more now get priority access to binding tax rulings from the Canada Revenue Agency through the existing Advance Income Tax Rulings program, the federal government said in a press release cited by The Canadian Press.

The Money Behind the Pitch

The dollar figures from summit attendees were real and specific. TD Bank chief executive Raymond Chun committed $150 billion over five years to Canadian projects, pointing to energy, critical minerals, infrastructure, defence and aerospace as targets, according to The Canadian Press. Scotiabank pledged more than $100 billion in financing, underwriting and investment, and launched a new Scotia Growth Institute to back long-term competitiveness projects.

Saskatchewan Premier Scott Moe and Bell Canada CEO Mirko Bibic announced an expansion of Bell's AI data center project in the province to a total capital investment north of $50 billion, a figure the Saskatchewan government projects will create up to 500 permanent operations jobs and roughly 3,000 more in security, logistics and maintenance, per a provincial news release cited by CTV News. Manitoba Premier Wab Kinew separately announced his province will waive provincial sales tax on major capital spending tied to Port of Churchill upgrades, including a proposed energy corridor and LNG facility.

The Counter-Trend South of the Border

Canada's bet on tax incentives to win data center investment is running directly against a trend playing out in the United States. More than 10 U.S. states have paused or canceled data center tax exemptions as the AI buildout drove costs higher and fueled local opposition, according to the Daily Signal, citing reporting from The Wall Street Journal.

Ohio's sales tax exemption for data center equipment, in place for more than a decade, cost the state over $1.5 billion in 2025 alone, more than 10 times the original estimate, per the Journal's reporting. Republican Governor Mike DeWine paused new applications in May. New Jersey eliminated $250 million in remaining data center tax credits in August, just two years after making $500 million available. Virginia projected roughly $1.94 billion in lost sales tax revenue for fiscal 2025 from its exemption. Illinois and Washington moved on similar breaks.

The concern driving those reversals, as raised by local communities per the Journal, is straightforward: data centers strain electricity grids and water supplies, and taxpayers end up subsidizing infrastructure built for AI companies while absorbing the cost overruns. President Donald Trump has pushed back on that framing, telling audiences last week that communities hosting data centers "want to get rich" and see higher property values and lower taxes as a result, according to the Daily Signal.

Saskatchewan's more than $50 billion Bell project and Manitoba's Port of Churchill exemption raise a fair question: are these broad, rules-based tax reforms like the Mega Deduction, or are they the kind of targeted, project-specific carve-outs that blew past cost estimates in Ohio and New Jersey? The Mega Deduction applies to any qualifying business investment regardless of sector, which distinguishes it from a single-company subsidy. The Saskatchewan and Manitoba deals look more like the targeted incentives now being unwound in the U.S.

Neither the Saskatchewan government's release nor CTV's reporting on the summit disclosed a specific dollar figure for how much provincial or federal tax revenue Bell's expanded data center will forgo, or what happens if the AI investment boom cools before the jobs materialize. Carney's own $1 trillion five-year investment target, and the $36 billion federal price tag attached to getting there, will be the numbers to watch as the summit wraps and Parliament takes up the budget measure needed to make the Mega Deduction law.