Frequently asked questions

A proposed permanent change to Canada's capital cost allowance (CCA) rules announced on September 15, 2026. It lets businesses deduct 100% of the cost of most depreciable property in the year the property becomes available for use, instead of writing it off over several years.

The proposal applies to eligible depreciable property acquired on or after September 15, 2026. The deduction is claimed in the taxation year in which the property becomes available for use.

No. As of the announcement it is a government proposal. Draft legislation and a bill still have to follow. Canadian businesses commonly plan around announced tax measures because the Canada Revenue Agency generally administers proposals as if they were law, but confirm with your accountant before committing capital.

The government says roughly two-thirds of capital investment will qualify, including computer equipment, software, machinery, vehicles, aircraft, patents, research and development, fibre-optic cable, mining property, pipelines, rail track, bridges and roads.

Buildings and additions in Classes 1 and 3; Class 14 and 14.1 property such as franchises, licences and goodwill; Class 51 property; certain vehicles in Classes 10 and 10.1 (notably passenger vehicles over the cost cap); and property depreciated under Schedules V and VI of the Income Tax Regulations.

The announcement describes immediate expensing for 'taxpayers' that acquire eligible depreciable property, which would include unincorporated businesses. The earlier $1.5 million CCPC immediate expensing measure was limited to CCPCs, resident individuals and Canadian partnerships. Wait for the draft legislation for the precise scope.

The announcement does not describe a cap. The older temporary measure had a $1.5 million annual limit; the Mega Deduction is described as broad-based and permanent.

Strictly, it is a deferral: you deduct the same total cost, just much sooner. In practice that means a large tax reduction in the year of purchase, which is cash you keep and can reinvest. The calculator on this site shows both the year-one reduction and the net present value of the acceleration.

Generally, the earlier of when the property is first used to earn income and the start of the second taxation year after acquisition, with specific rules for buildings and vehicles. For most equipment it means delivered, installed and capable of doing its job before your fiscal year-end.

Immediate expensing at 100% in the year of acquisition means the half-year rule no longer limits the first-year claim for eligible property.

If you sell an asset for more than the undepreciated capital cost of its class, the excess up to the original cost is recaptured as income. With a 100% first-year deduction, any later sale proceeds can trigger recapture. Plan disposals accordingly.

CCA is a permissive deduction: you may claim any amount up to the maximum. Businesses with losses may prefer to claim less and preserve the deduction for later years.

Only capital property you own generates CCA. Operating lease payments are already a current expense. A financed purchase where you take title qualifies; a pure lease does not.

Most provinces follow the federal CCA rules automatically, which is why the calculator applies the combined federal and provincial rate. Quebec and Alberta administer their own corporate tax and normally harmonize, but confirm.