Why Talk About the AII Now? 

In December, many manufacturing companies re-evaluate their projects and prepare their investment decisions for the following year. After presenting the Strategic Response Fund (SRF) we wanted to highlight a second, equally important but often less familiar lever: the Accelerated Investment Incentive (AII). 

While the SRF impacts external funding, the AII directly influences the actual tax cost of your investments. Together, these two mechanisms can make your automation projects much more accessible right from the start of 2026. 

What is the AII and How Does It Improve Your Profitability?

For many manufacturers, the main barrier to automation or equipment acquisition remains the initial financial burden. The AII reduces this pressure by allowing an accelerated tax write-off. 

According to the Canada Revenue Agency, the AII allows you to: 

• Claim an enhanced first-year allowance for certain eligible properties; 

• Suspend the half-year rule; 

• Or apply the prescribed CCA rate to 1.5 times the net addition to the class, depending on the type of property. 

These measures increase the portion of the asset you can deduct in the year of acquisition. The total depreciable amount over the life of the asset does not change, but the tax benefit is realized much earlier, providing a concrete boost to cash flow. 

What Equipment is Eligible for the AII?

According to the official CRA page, a property must, in particular: 

• Be acquired after November 20, 2018; 

• Be ready to be put into service before 2028; 

• Be depreciable property subject to the CCA rules. 

Certain classes are excluded, notably property in Classes 54, 55, and 56, as well as property already eligible for full expensing (such as certain manufacturing or clean energy equipment). The CRA also specifies that certain property acquired from a non-arm's length person may be excluded. 

Concrete Example: A $300,000 Machine

Result: ~$90,000 of additional deduction in the first year, representing significant tax savings and improved cash flow to finance other projects.

Important Note: This example is simplified for illustrative purposes. Actual calculations depend on your specific tax situation. Consult your CPA or tax specialist for an accurate calculation.

What is the Practical Impact on a Manufacturing Project? 

When a property is eligible for the AII, two things happen: 

• The deductible portion in the first year increases. 

• The tax payable for that first year decreases. 

For a company investing in a robot, a packaging line, or a digital system, the real impact is clear: 

• Less short-term budget pressure 

• Faster ROI (Return on Investment) 

• A project that is easier to get approved by management 

The AII does not reduce the price of the project, but it changes when you recover a portion of that cost. For a manufacturer, this detail can make the difference between "let's wait" and "let's move forward." 

How to Combine the AII with Other Programs Like the SRF? 

The AII integrates particularly well into projects involving: 

• Automation of critical workstations; 

• Modernisation of complete lines; 

• Addition of manufacturing execution systems (MES); 

• Acquisition of specialized equipment; 

• Renewal or expansion of capacity. 

While the SRF supports large-scale projects and industrial resilience, the AII comes into play at the level of financial planning and tax ROI. Two levers, two approaches, one common goal: making manufacturing transformation more feasible. 

The TEXION Approach: Maximizing the Effect of the AII Through a Well-Structured Project 

At TEXION, we do not provide tax services—that role belongs to your CPAs and tax specialists. However, we play a key role in setting up automation or engineering projects that integrate effectively with government incentives. 

We can help you to: 

• Identify relevant investments in your production chain; 

• Define a feasible, costed project aligned with your priorities; 

• Document gains (quality, OEE, efficiency, labour); 

• Work in synergy with your tax advisors to integrate the AII into the business case; 

• Execute the project on the ground, using a rigorous and agile methodology. 

A clear project + an appropriate tax incentive = an investment that is much easier to justify. 

Ready to Plan Your Investments for 2026?

In 30 minutes, we can: 

• Quickly analyze your planned projects; 

• Determine eligible investments according to official rules; 

• Estimate the impact of the AII on your ROI; 

• Establish a coherent industrial execution plan. 

Frequently Asked Questions About the AII

Canada Revenue Agency. (2025). Accelerated Investment Incentive. Canada.ca. https://www.canada.ca/en/revenue-agency/services/tax/businesses/... (accessed December 1, 2025)