Your revenue is reported before you file it
Builders and GCs whose business is mostly construction must file T5018 slips reporting what they paid each subcontractor, and the reported amounts include HST. For an excavation sub, that means CRA has a third-party record of your revenue before your return arrives, and its matching program flags corporations that file light against their slips. The fix is procedural, not clever: every T5018 reconciled to its invoices, the HST component separated out, and timing differences, a December billing the GC reports when paid in January, documented rather than shrugged at.
The slips run the other way too. If construction is more than half your business income and you pay your own subs, tri-axle brokers, dewatering crews, demolition labour, you are required to file T5018s for payments of $500 or more. We register the account and file them as part of the year-end package, so a slip you owed never surfaces in someone else's audit first.
CCA when the balance sheet is made of iron
Depreciation for tax is not one number, it is a schedule of classes, and an excavation fleet spreads across several of them:
| Asset | Class | Rate |
|---|---|---|
| Excavators, dozers, graders and most power-operated earthmoving equipment | 38 | 30% |
| Pickups, service trucks and float trailers | 10 | 30% |
| Heavy freight trucks rated over 11,788 kg, where the hauling use qualifies | 16 | 40% |
| Separately bought attachments, shop tools and equipment | 8 | 20% |
Two rules matter as much as the rates. CCA starts only when a machine is available for use, delivered and capable of doing its work, not when the deposit cheque clears. And the first-year acceleration rules have moved in nearly every recent federal budget, so the multiplier on a new machine depends on when it lands relative to your year-end, something to confirm before signing, not after. The strategy side of that timing belongs to Tax Planning & Advisory; the filing side has to execute it class by class without errors.
HST returns that get reviewed, and pass
Put a serious machine on the books and the 13% input tax credit often flips that period's HST return into a refund claim, and CRA routinely holds refund returns for pre-assessment review. The file that clears quickly is boring: the purchase agreement, the financing contract, proof the corporation is the buyer. Financing does not slow the credit down, the full ITC is generally claimable for the period you acquire the machine, not spread over the loan. One construction-specific wrinkle helps cash flow: HST on the statutory holdback portion of your billings is generally not payable until the holdback is released, so your return should not be remitting tax on money the payer is still legally holding. Where the machine comes from matters too: an auctioneer generally collects HST you can claim back, while a private sale from an unregistered seller carries no HST at all, so there is no credit to claim and nothing to support one. Keep the bill of sale either way, a serial number on a schedule is not documentation. When CRA asks questions anyway, CRA Audit & Review Support answers with the file, not with delay.
Demolition salvage: small money, outsized audit interest
Demolition work throws off scrap, and scrap steel receipts are revenue like any other, HST-taxable and reportable. Weigh tickets that never meet a deposit slip are exactly the kind of gap a review finds, so we book salvage sales the day the cheque arrives and keep the tickets with them. It is rarely big money; it is disproportionately expensive to explain when it is missing.
The T2 and the owner's T1, filed as one picture
Year-end filing for an excavation corporation is a T2 whose Schedule 8 mirrors the machine ledger, class by class, with additions, trade-ins and dispositions all in, and active income taxed at Ontario's roughly 12.2% combined small-business rate on the first $500,000. The corporate balance is due three months after year-end for most small CCPCs even though the return itself has six, a gap that catches contractors who wait for the filing deadline to think about the cheque. We file the owner's personal return in the same pass so salary, dividends and vehicle benefits land consistently on both sides of the table. Corporate Tax Filing for excavation and demolition contractors across the GTA is quoted in writing after a free 15-minute discovery call, no hourly surprises.
