Know which iron is which
The capital cost allowance system treats a fleet as two different kinds of property. A truck or tractor designed for hauling freight with a gross vehicle weight rating over 11,788 kg belongs in Class 16 at 40% declining balance. Trailers, lighter trucks and yard vehicles sit in Class 10 at 30%. Under the accelerated investment incentive, equipment available for use before 2028 escapes the half-year rule, so a new tractor put to work this year deducts the full 40% of its cost in year one.
| Asset | Class | Rate |
|---|---|---|
| Highway tractors and freight trucks over 11,788 kg GVWR | 16 | 40% |
| Trailers: dry vans, reefers, flatbeds | 10 | 30% |
| Lighter trucks, pickups and yard vehicles | 10 | 30% |
| Shop and yard equipment | 8 | 20% |
| Computers and dispatch hardware | 50 | 55% |
Timing matters at the edge of the year. CCA requires the asset to be available for use, so a tractor delivered in the last week of December deducts as if it worked the whole year, while one delivered the first week of January waits twelve months for the same claim. And the incentive is not reserved for new iron: a used tractor bought at arm's length qualifies as long as it is new to your corporation, which matters in a trade where good used trucks are the normal growth path.
CCA is a dial, and recapture is the spring behind it
CCA is optional each year, up to the maximum, which makes it a smoothing tool: claim hard in strong years, ease off when income is thin and the deduction would be wasted. The spring loaded behind those choices is recapture. Claim 40% a year against a tractor that holds its value, and its tax value falls far below what the used market pays; sell above the remaining pool and the difference comes straight back into income.
Because CCA runs in class pools rather than per truck, steady replacement usually protects you: the proceeds of the old unit are absorbed by the cost of the new one in the same class. Recapture bites when the fleet shrinks, in a downsizing year, an exit, or a switch to leased equipment. We model the pool before any disposal, so the tax on a sale is a number you chose rather than a spring you stepped on. The mirror image is a terminal loss: empty the class by selling below its remaining balance and the shortfall deducts in full, which occasionally makes the timing of a final disposal a planning decision of its own.
Fuel discipline is tax discipline
Fuel is the largest cost a carrier can actually manage, and the tax system rewards managing it on paper as much as at the pump. Every litre bought on a fuel card produces a statement line that supports the 13% input tax credit; every cash fill with a lost receipt donates that 13% to the CRA. The policy is blunt: cards, not cash, with Dext capturing whatever paper still exists.
The same records give each unit a fuel cost per kilometre, the first number to move when margins tighten and a truer basis for quoting than last year's average. Clean fuel data also keeps the books consistent with what lenders and insurers see, which over a financing lifetime is worth more than any single deduction.
Pay yourself for the cycle, not the quarter
Freight rates run in cycles, and the owner's pay plan should assume it. In strong years, income left in the corporation is taxed at roughly 12.2% on the first $500,000, and the retained difference is what buys the next tractor without a loan or carries the fleet through a soft market. The salary-dividend blend is a yearly decision rather than a permanent one: salary builds RRSP room and CPP, dividends flex with cash, and we revisit the mix with every T2. Where a spouse genuinely runs dispatch, safety files or the office, a reasonable salary for that work is deductible to the corporation and builds their own RRSP room and CPP, with timesheets and market-rate pay keeping the CRA onside.
Soft years have their own levers. A non-capital loss carries back up to three years, turning a bad stretch into a refund of tax already paid, and instalments get reset so you stop prepaying a profit that is not coming. Tax Planning & Advisory runs all of this as a year-round conversation, not a March scramble, and when the next unit is a financing decision as much as a tax one, Business Financing Advisory sits in the same meeting. A written quote follows a free 15-minute discovery call.
