Industry: Health Clinics
Managing Capital Cost Allowance (CCA) on Clinic Equipment
How to use Capital Cost Allowance to depreciate expensive medical and dental equipment, reducing your clinic’s corporate tax burden.
A dental chair costs $25K. A CBCT scanner can cost $150K. Physio equipment, lasers, ultrasound, autoclaves - clinics are capital-intensive. Capital Cost Allowance (CCA) is how the tax system allows you to deduct these large purchases over their useful life rather than all at once.
The 2026 CCA Classes You’ll Actually Use
| Class | Rate | Typical Clinic Assets |
|---|---|---|
| Class 8 | 20% | Most medical instruments, furniture, office equipment. |
| Class 10.1 | 30% | Passenger vehicles (Cost cap ~$38k + HST). |
| Class 12 | 100% | Small tools/instruments <$500; most software. |
| Class 50 | 55% | Computers, tablets, and network infrastructure. |
| Class 13 | S/L | Leasehold improvements (deducted over the lease term). |
The $100,000 Scanner: A Numerical Example
When you buy a $100,000 piece of equipment (Class 8), you don’t get a $100k deduction in year one. However, the "Accelerated Investment Incentive" (AII) allows for an enhanced first-year claim.
Year 1 Calculation (assuming AII applies):
- Asset Cost: $100,000
- AII Factor: 1.5x the normal rate (30% instead of 20%)
- Year 1 Deduction: $30,000
- Remaining Balance (UCC): $70,000
Year 2 Calculation:
- Opening UCC: $70,000
- Normal Rate: 20%
- Year 2 Deduction: $14,000
- Remaining Balance (UCC): $56,000
*Over two years, you have deducted $44,000 of the $100,000 cost against your corporate income.*
Lease vs. Buy: The Tax Perspective
| Scenario | Tax Treatment | Best for... |
|---|---|---|
| Buy (Cash/Loan) | You claim CCA (depreciation) + Interest on the loan. | Long-term assets; high-value tech. |
| Lease (Operating) | The full monthly lease payment is deductible as an expense. | Assets with high obsolescence (e.g., computers). |
The "Recapture" Trap during a Practice Sale
When you sell your practice, you aren’t just selling "goodwill"-you are selling the equipment. If you sell a piece of equipment for more than its remaining tax value (UCC), the CRA "recaptures" the depreciation you previously claimed.
Example:
- You bought a laser for $50,000.
- Over 5 years, you claimed $35,000 in CCA.
- Your tax value (UCC) is $15,000.
- You sell the laser (as part of a practice sale) for $25,000.
- Recapture: $10,000 is added back to your income as fully taxable business profit.
CCA is Optional
Unlike many expenses, you do not *have* to claim CCA. If your clinic has a loss this year, you can "skip" the CCA claim and save the room for a future year when your income-and tax rate-is higher.
Are you planning a major equipment upgrade in 2026? Let’s model the CCA impact to ensure you maximize your first-year write-off while avoiding future recapture traps.
The content above is for general informational and educational purposes only and does not constitute professional accounting, tax, legal, or financial advice. Tax rules change and outcomes depend on your specific situation - please consult us before acting on anything you read here.
Next Step
Start with a 30-minute diagnostic call.
Bring your last two years of T2, HST returns, and personal T1. We’ll review them in advance and use the call to flag the positions that won’t hold, the SBD grind you may be triggering, and the elections you may have missed - before you commit to anything.