The Association of Equipment Manufacturers (AEM) is welcoming steps outlined in Ontario’s 2026 budget to strengthen the province’s manufacturing sector.
Equipment manufacturers stand to benefit from the introduction of an immediate 100 per cent tax deduction for manufacturing and processing machinery and equipment. The deduction outlined in the Ontario budget allows manufacturers to immediately realize savings instead of spreading out deductions over multiple years.
As well, AEM applauded the reduction of the small business corporate income tax rate by more than 30 per cent to help equipment manufacturers stay competitive and reinvest in operations and local jobs.
The budget also includes planned investments throughout the next decade of more than $210 billion, including $37 billion in the 2026–27 fiscal year. The funding will be used to build highways, hospitals, transit and community infrastructure.
The provincial government also announced it will work with the federal government to provide funding to eligible municipalities to reduce development charges to improve housing affordability and speed up construction of the homes across the province.
“Ontario is navigating economic challenges with a pragmatic and prudent fiscal plan,” said Finance Minister Peter Bethlenfalvy.
“To help the province navigate these times and come out stronger, we are investing in strategic priorities such as energy, critical minerals, key infrastructure and critical technologies that will make our economy stronger, while cutting red tape and creating the conditions for businesses to grow, supporting workers and strengthening Ontario’s economy.”
AEM is also welcoming the continued collaboration between the federal government and Ontario to retrain workers in tariff-impacted industries through the $228.8 million Canada-Ontario Workforce Tariff Response as an encouraging sign.
Such measures will help workers stay employed, upgrade their skills and adapt to new technology and job demands as the economic landscape continues to evolve.
“This budget signals that Premier Ford’s government understands what equipment manufacturers need to compete: a strong investment climate, modern infrastructure, and a steady stream of skilled workers,” said Kip Eideberg, Senior Vice President of Government and Industry Relations at AEM.
“The real test now is execution so that Ontario’s workers and businesses see results as soon as possible. AEM looks forward to working collaboratively with the government to ensure smooth implementation of these measures so that equipment manufacturers and their value chain partners can continue to thrive.”
