Writing Off Your Work Truck: What Contractors Can Actually Claim in Canada

For most Ontario contractors, the work truck is one of the single largest business assets they own. It hauls tools and materials, gets you to job sites, and logs tens of thousands of kilometres a year. The good news is that CRA allows you to deduct a significant portion of vehicle costs against your business income — but the rules around how to do a proper truck write-off contractor Canada calculation are more specific than many tradespeople realize. Claiming it wrong can trigger a reassessment; claiming too little leaves money on the table.

How CCA Works: The Basics

In Canada, you cannot simply deduct the full purchase price of a vehicle in the year you buy it. Instead, the cost is written off gradually over several years through the Capital Cost Allowance (CCA) system. CCA is the tax system's way of recognizing that a depreciating asset loses value over time — and it lets you claim that depreciation as a deduction against your business income.

Every type of asset falls into a CCA class with its own deduction rate. Vehicles are in Class 10 or Class 10.1, depending on the purchase price.

Class 10 vs. Class 10.1: Which Class Is Your Truck In?

This is where many Ontario contractors get tripped up:

• Class 10 (30% declining balance): Applies to motor vehicles, including most trucks and vans, purchased for $37,000 or less (before HST). Most pick-up trucks and work vans fall here.
• Class 10.1 (30% declining balance, but with restrictions): Applies to passenger vehicles — cars, SUVs, and luxury vehicles — that cost more than $37,000. The CCA claim is capped at $37,000 regardless of what you paid. Leased passenger vehicles have similar cost restrictions.

An important distinction: a pick-up truck with a payload capacity over 1 tonne is generally considered a "motor vehicle" rather than a "passenger vehicle," which means it goes in Class 10 without the cost cap — even if it cost $65,000. This matters a lot for Barrie contractors who buy heavy-duty trucks for hauling. Confirm the payload capacity in the vehicle specs before your accountant classifies it.

The CCA Calculation: Year 1 Example

Let's walk through a concrete example. You purchase a work truck for $45,000 (before HST). It qualifies as a motor vehicle and goes into Class 10.

• Purchase price: $45,000
• CCA class: Class 10 at 30%
• Half-year rule: In year 1, you can only claim half the normal CCA (CRA's rule for all new asset additions in a year)
• Year 1 CCA: $45,000 × 30% × 50% = $6,750
• Undepreciated Capital Cost (UCC) at end of year 1: $45,000 − $6,750 = $38,250
• Year 2 CCA (full rate): $38,250 × 30% = $11,475

Note: CRA introduced the Accelerated Investment Incentive (AII) in 2018, which for eligible property acquired after November 20, 2018 allows you to use 1.5x the normal first-year rate instead of the half-year rule. For most Class 10 vehicles, this means 45% (1.5 × 30%) in year 1 rather than 15%. Whether AII still applies at the full enhancement in 2026 depends on the phase-out schedule — confirm with your bookkeeper or accountant.

The "Available for Use" Rule

You can only start claiming CCA in the year the vehicle is available for use in your business — meaning the year you actually receive and put it into service. If you sign a purchase agreement in December but the truck is delivered in January, your first CCA claim is in the January tax year. This matters for year-end planning.

Business Use Percentage: The Critical Number

You can only deduct the business-use portion of your vehicle costs. If you drive 40,000 km in a year and 32,000 of those are for business (driving to job sites, picking up materials, client meetings), your business use is 80%. You multiply every vehicle deduction — including CCA — by 80%.

In the example above, if the truck is 80% business use:

• Year 1 CCA: $6,750 × 80% = $5,400 (deductible)

This applies to operating costs too — fuel, insurance, maintenance, and repairs are all deductible at the business use percentage. If you spend $8,000/year on fuel and insurance combined and your business use is 80%, you can claim $6,400.

Logbook Requirements: What CRA Expects

CRA requires you to maintain a logbook to support your business-use claim. The logbook must record:

• Date of each trip
• Destination
• Business purpose
• Kilometres driven

You also record total odometer readings at the start and end of each year. In audit situations, the logbook is the first thing CRA asks for. Without one, they will typically deny or reduce the business-use percentage you claimed. A simple mileage tracking app (many sync with QuickBooks or Xero) makes this manageable.

CRA does allow a simplified logbook approach after the first full year: keep a full logbook for the first year, then a representative sample year every five years — provided your business use pattern doesn't change significantly. Ask your bookkeeper if you qualify.

What Operating Costs Are Deductible?

In addition to CCA, these vehicle operating costs are deductible at the business-use percentage:

• Fuel and oil
• Insurance
• Licence and registration fees
• Maintenance and repairs
• Parking fees (business-related)
• Lease payments (if leased, rather than CCA)
• Car washes, if you can tie them to business use

Capital improvements (a roof rack, toolbox, or upfitting) may be added to the vehicle's CCA class rather than expensed directly, depending on the nature and cost of the improvement.

Common Mistakes Ontario Contractors Make on Vehicle Write-offs

Claiming 100% business use with no logbook: This is the most common and most audited mistake. CRA knows most vehicles have some personal use. Claiming 100% without a logbook to back it up is a red flag.

Missing the half-year rule: Claiming the full 30% in year 1 instead of 15% (or using the AII incorrectly) creates a discrepancy in your UCC pool that compounds in future years.

Forgetting to adjust for HST ITCs: If you claimed the HST paid on the vehicle as an input tax credit (which you should, for business use), you reduce the cost base for CCA by the HST you recovered. Many business owners add the full purchase price including HST to the CCA pool when they should be adding only the pre-HST amount (or the net amount after ITC).

Mixing personal and business vehicles carelessly: If your spouse uses the truck on weekends, that's personal use. If you drive it from home to your shop before heading to a job, the home-to-shop leg may be considered personal commuting. Keep the lines clear.

Electric Vehicles: Class 54 and 55

Zero-emission passenger vehicles go into Class 54 (100% CCA in year 1, with the half-year rule) and zero-emission motor vehicles into Class 55 (100% declining balance). If you're considering an electric truck for your Ontario trades business, the first-year write-off is substantially better than Class 10 — but confirm current rules, as the 100% rate has phase-out schedules that may have changed.