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Canada: Enhanced capital cost allowance, certain “green” vehicles and equipment

Canada: Enhanced capital cost allowance

Canada’s Department of Finance announced it will propose a temporary enhanced first-year capital cost allowance (CCA) rate of 100% for qualifying zero-emission off-road automotive vehicles and equipment, acquired on or after 2 March 2020.

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The enhanced CCA rate would apply to qualifying vehicles and equipment that do not currently benefit from the enhanced CCA for zero-emission motor vehicles (as introduced in the 2019 federal budget).

The 100% CCA rate would gradually be phased out for vehicles and equipment that become available for use after 2023, until it eventually expires in 2028. Taxpayers would only be able to claim the enhanced allowance for the tax year in which a qualifying vehicle is first available for use.


Read a March 2020 report prepared by the KPMG member firm in Canada

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