Equipment CCA: depreciation classes for BC trades, forestry and small manufacturers

Mission’s economy runs on equipment — trades trucks and tools, forestry machinery and small-manufacturing gear. You generally cannot deduct the whole cost in the year you buy it; you claim it over time through capital cost allowance (CCA), at the rate for its CCA class. The right class and good timing change how fast you recover the cost. For a purchase near the year end, buying an excavator or truck in Mission works through the timing.

How CCA works

Most equipment is a capital asset: it lasts more than a year, so tax rules spread the deduction across its life rather than allowing it all upfront. Each year you claim a percentage of the asset’s remaining (undepreciated) cost, on a declining-balance basis, at the rate set for its class.

Two rules shape the first year in particular:

• The half-year rule. In the year you buy an asset, you can generally only claim CCA on half of the net addition, so a Class 8 purchase gives you 10% (half of 20%) in year one, then the normal rate afterward.
• Acceleration incentives. The Accelerated Investment Incentive can suspend the half-year rule and give an enhanced first-year deduction on eligible property, and in recent years a temporary immediate-expensing measure let many Canadian-controlled private corporations write off a large amount of eligible equipment in the first year. These incentives have specific eligibility and some have been phasing out, so whether an accelerated or full first-year write-off is available depends on when your asset became available for use — always confirm the rule for your purchase year.

Common classes for trades and equipment-heavy businesses

You do not choose a class — the type of asset determines it. The ones most Mission trades, forestry and manufacturing businesses run into:

• Class 8 — 20%. The catch-all for equipment, machinery, furniture and tools that do not fit elsewhere. Much of a shop’s general gear lands here.
• Class 10 — 30%. Most motor vehicles and general-purpose trucks, plus certain other equipment.
• Class 10.1 — 30%. A passenger vehicle that costs more than the CRA’s prescribed limit goes here instead of Class 10, and each such vehicle sits in its own separate class with special rules on sale. The cost you can capitalize is capped at that prescribed limit.
• Class 12 — 100%. Certain small tools and assets are fully deductible. This is where many hand tools and low-cost items belong, a genuine first-year write-off, subject to the rules for the class.
• Class 50 — 55%. Computers and systems software — the fast-depreciating tech in the office side of the business.
• Manufacturing & processing equipment. Machinery and equipment used primarily to manufacture or process goods for sale qualified for the accelerated Class 53 (50%) when acquired from 2015 through 2025. Equipment acquired in 2026 no longer uses Class 53 — it falls into Class 43 (30%) instead. If you are buying production machinery, the year of acquisition matters to your rate.

This is not the full chart — buildings, land improvements and specialized assets have their own classes, but it covers most equipment purchases a trades or small-manufacturing business makes.

Buying vs leasing equipment

How you acquire equipment changes the tax mechanics. Buying (including financing) makes it a capital asset depreciated through CCA, with loan interest deductible separately. Leasing is generally deducted as you pay, spreading the cost evenly and easing cash flow, but you build no owned asset. Neither is automatically better — it depends on useful life, financing costs and your tax position, so run both before a major purchase.

Timing purchases near year-end

CCA is claimed on assets you own and that are available for use by year-end, so an asset in service a week before year-end deducts that year, and one a week after waits a full year. Never buy just for the deduction — the saving is a fraction of the cost — but time a genuine purchase with care.

What we set up in your file

The work is a clean CCA schedule: each asset in the right class, the half-year and any incentive applied for its year, and dispositions tracked to avoid surprise recapture. Done loosely, it loses deductions or trips a CRA review. If you run equipment in Mission or the Fraser Valley, an accountant in Mission sets this up, and it flows into your bookkeeping and corporate tax each year.

Whether any of this applies to you turns on your year-end, your structure and what else is in the picture — ask about your own situation and a CPA replies, usually the same business day. Free either way.

Equipment classes come up constantly in construction, where the asset list is long and the classes are not obvious — the trades and construction side of it covers that context.

This article is general information for Canadian business owners and is current as of July 2026. CCA rules, classes and incentives change — confirm the rules for your purchase year. It is not tax advice; please speak with a CPA before acting on anything here.

Working through this locally? We advise owners on it as a Chilliwack farm and trades accountant.

Equipment-heavy trades are a large share of our Fraser Valley work, including in Abbotsford, Langley, Maple Ridge and Surrey.