Capital Cost Allowance (CCA) for Truck Purchases in Canada

Purchasing a truck for your business in Canada is a major investment—but it also comes with significant tax advantages. Through the Capital Cost Allowance (CCA) system, Canadian business owners can claim deductions for the depreciation of their trucks, reducing taxable income year over year.

In this guide, we’ll explain how CCA works, which classes apply to different types of trucks, and how you can maximize your tax deductions by structuring your purchase strategically.

What Is Capital Cost Allowance (CCA)?

CCA is Canada’s version of depreciation for tax purposes. It allows businesses to write off the cost of capital assets, such as commercial trucks and heavy equipment, over time.

Instead of deducting the full purchase price in one year, the Canada Revenue Agency (CRA) permits a percentage of the cost to be claimed annually, depending on the asset’s classification.

‍

CCA Classes for Trucks in Canada

The class your truck falls under determines your annual deduction rate. Here's a breakdown of the most common CCA classes for commercial vehicles:

How to Maximize Your CCA Deduction

1. Time Your Purchase Strategically

Purchasing and putting the truck into service before your fiscal year-end allows you to claim CCA for that year. The earlier it’s in use, the sooner the tax benefits begin.

2. Track Business Use

Ensure your vehicle is used primarily for business purposes. Maintain accurate records such as:

• Mileage logs
• Delivery schedules
• Fuel receipts and maintenance reports

3. Understand the Half-Year Rule

In the year you acquire the asset, you can only claim half of the standard CCA rate. For example, a truck in Class 16 allows a 40% annual deduction, but only 20% in the first year.

4. Work With a Tax Advisor

CCA rules can get complex, especially when you’re combining different asset classes or dealing with multiple vehicles. A professional accountant can help you:

• Apply the correct CCA class
• Stay compliant with CRA audits
• Optimize deductions across your fleet

Example: First-Year Deduction for a Class 16 Truck

Let’s say you purchase a $90,000 heavy-duty truck in September 2025. It qualifies for Class 16 (40%):

• Year 1 Deduction = $90,000 × 50% × 40% = $18,000
• Remaining UCC for Year 2 = $72,000
• Year 2 Deduction = $72,000 × 40% = $28,800

Over the first two years, you reduce your taxable income by $46,800—all while putting the asset to productive use.

‍

Benefits of Using CCA for Truck Purchases

Truck Financing & CCA Go Hand-in-Hand

At Mehmi Financial Group, we offer tailored truck financing solutions that align with your CCA strategy.

• 0-down financing for eligible trucks
• Options for new or used equipment
• Support for Class 10, 10.1, and 16 vehicle purchases
• Approvals in as little as 24 hours

Explore Equipment & Truck Loans →
Use Our Truck Loan Calculator →

Final Thoughts: Plan Your Truck Purchase Strategically

Understanding CCA rules in Canada gives you a competitive edge. When used properly, these deductions reduce your taxes and improve long-term business sustainability.

Whether you're buying your first truck or replacing an aging vehicle, timing your purchase and structuring financing to support your tax strategy can help you:

• Lower your tax liability
• Boost your net income
• Fuel growth with less financial strain

Ready to finance your next truck? Let Mehmi Financial Group help you plan and finance the right asset—at the right time.

‍