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

Mission's economy runs on equipment — trades trucks and tools, forestry machinery, and the gear that keeps small manufacturers producing. When you buy that equipment, you generally cannot just deduct the whole cost the year you pay for it. Instead you claim it over time through capital cost allowance (CCA), and the rate depends on which CCA class the asset falls into. Getting the class right — and timing purchases well — changes how quickly you recover the cost against tax. Here is how it works in plain terms.

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 the asset a capital item you depreciate through CCA, and any interest on a loan is separately deductible. Leasing is generally deducted as you pay the lease, which spreads the cost evenly and can be gentler on cash flow, though you do not build an owned asset. Neither is automatically better — the answer depends on the equipment's useful life, financing costs and your tax position in the year — but it is worth running both before a major purchase rather than defaulting to one.

Timing purchases near year-end

Because CCA is claimed based on assets you own and that are available for use by your year-end, timing matters. An asset bought and put into service before year-end can start generating a deduction that year; one that arrives a week later waits a full year. That does not mean buying equipment you do not need to chase a deduction — the tax saving is only a fraction of the cost — but if a genuine purchase is coming anyway, the side of year-end it lands on can be worth a conversation.

What we set up in your file

The practical work is keeping a clean, correctly-classified CCA schedule: every asset in the right class, the half-year and any incentive applied correctly for its year, and dispositions handled so you do not get caught by recapture when you sell. Done well it is quiet and consistent; done loosely it is where equipment-heavy businesses leave deductions on the table or trip a CRA review. If you run equipment in Mission or the Fraser Valley, an accountant in Mission who sets this up properly saves you the guesswork — and it flows straight into your bookkeeping and corporate tax each year.

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.

About the author

Sunny Dhillon, CPA

Founder of EverStone CPA, an Abbotsford CPA firm, and a member of the Chartered Professional Accountants of British Columbia (CPABC). Sunny works with incorporated contractors and equipment-heavy businesses across Canada on tax, bookkeeping and advisory. More about Sunny →  ·  Book a free consult →