Trucks, trailers and depreciation: what carriers need to know about CCA

A tractor is the biggest purchase most carriers make, and one of the most important to get right on the tax side. You can't deduct the whole price in the year you buy it. Instead you claim capital cost allowance (CCA), a set percentage of the remaining value each year.

This article is part of our guide to the financial side of running a trucking company.

Which class your equipment falls into

The rate is applied on a declining balance. Each year you claim the percentage on whatever hasn't been written off yet (the "undepreciated capital cost", or UCC).

The first-year write-off is bigger right now

Normally, in the year you buy equipment you can only claim half the usual rate (the "half-year rule").

The federal government has reinstated and extended the Accelerated Investment Incentive. It became law in March 2026 through the Budget 2025 implementation act. For equipment acquired after 2024 and available for use before 2030, the first-year claim is three times the normal half-year amount. For a Class 16 tractor, that means 60% in year one, instead of 20%. The boost steps down for equipment available for use from 2030 to 2033, and ends after that.

You may still see older material that says the incentive ends in 2027. That's out of date.

Also proposed, not yet law: in September 2026 the federal government announced a "Productivity Mega Deduction", a permanent 100% first-year write-off for most equipment acquired on or after September 15, 2026, which would include trucks and trailers. As of October 2026 it was still a proposal. If you're buying now, keep documents showing the exact acquisition and in-service dates, and check with us when you file.

Example: a used tractor and a new trailer

Lisa runs a small flatbed operation in Edson. In 2026 she buys a used tractor for $140,000 from a dealer and a new trailer for $60,000.

In the first year, she deducts $111,000 instead of $37,000.

Things to know:

• You don't have to claim the full amount. CCA is optional each year. If your income is low this year, it can make sense to claim less and save the deduction for a higher-income year.
• Used equipment counts, as long as you buy it from an unrelated seller.
• "Available for use" matters. A truck bought on December 28 but not plated and ready to work until January may belong in the next tax year.

Selling or trading in a truck

When you sell a truck, the sale price comes off the balance of its class. Two things can happen:

• Recapture: if the sale price is more than what's left in the class, the difference is added back to your income. Big first-year write-offs make this more likely, because the balance drops fast.
• Terminal loss: if you sell the last asset in a class for less than its remaining balance, you can deduct the difference.

Example: trading in after two years

Two years later, Lisa trades in the tractor (now with a UCC of about $33,600) for $75,000 against a new one. If it's the only Class 16 asset, the extra $41,400 is recapture, taxable income in the year of the trade.

If she buys the new tractor in the same year, its cost goes into the same class and soaks up the recapture. Timing a trade-in so the replacement lands in the same tax year can avoid a large, unexpected tax bill. This is one of the most common surprises we see.

A trade-in is a sale. The trade-in value is your sale price, even though no cash changes hands. Make sure the dealer's bill of sale shows the trade-in value and the price of the new truck separately.

Lease or buy?

Buying: you claim CCA, plus the interest on the loan. You own the asset and carry the resale risk.

Leasing: lease payments are generally deductible as you make them. No CCA, no recapture. Payments are usually predictable.

The tax difference is often smaller than people expect. The real questions are:

• Cash flow: down payment and monthly cost (see cash flow for carriers)
• Maintenance: who pays, and what happens at high kilometres
• The end of the term: buyout price, kilometre limits and return conditions
• Your cost per kilometre: the truck has to earn its payment either way

Some "leases" are really financed purchases, and the tax treatment follows the substance. Bring the contract to us before you sign.

Records to keep

• Bills of sale for every purchase and sale, showing price and trade-in values separately
• Financing or lease agreements
• The date each unit was put into service
• A simple asset list: unit number, VIN, class, cost, date acquired and date sold

The bottom line

The equipment you buy, and when you buy and sell it, can swing your tax bill by tens of thousands of dollars. A short conversation before a purchase or trade-in is far cheaper than finding out at year-end. Talk to us before your next truck deal. Incorporated? See how CCA fits with running a corporation as an owner-operator.