The Accelerated Investment Incentive

The Accelerated Investment Incentive

Helping new businesses grow is a key component of what inspires everyone at Electromate. Some of our best customers started as small shops with big ideas. When big ideas can't always find the big dollars to back them, there are other avenues and angles...and we want to help you find them. A great example is the Accelerated Investment Incentive. 

 

What is it and how can you take advantage of it?

Under the proposed Accelerated Investment Incentive measure, certain capital property that is subject to the general CCA rules (referred to as "eligible property") will be eligible for an enhanced first-year allowance. The property will be eligible if it is acquired after November 20, 2018, and becomes available for use before 2028.

To find out the restrictions on property, see Restrictions.

The incentive's general rule will not apply to classes 43.1, 43.2, and 53, as they will benefit from the full expensing measures.

For more information, see the full expensing measures.

The incentive's general rule will be made up of two elements:

  1. Applying the prescribed CCA rate for a class to one-and-a-half times the net addition to the class for the year.
  2. Suspending the existing CCA half-year rule (and equivalent rules for Canadian vessels and class 13 property).

As a result, eligible property currently subject to the half-year rule will, in essence, qualify for an enhanced CCA equal to three times the normal first-year deduction. Eligible property not subject to the half-year rule (e.g., patent, franchise or limited-period licence) will qualify for one-and-a-half times the normal first-year deduction. 

If the Undepreciated Capital Cost (UCC) of a class increases in a year by an investment in both eligible property and non-eligible property, and an amount (e.g., a disposition) reduces the UCC of the class, you must first reduce the cost of non-eligible property additions before reducing the cost of eligible property additions. 

The incentive will apply to property for which CCA is calculated on a:

  1. Declining-balance basis (including class 14.1, intangible property)
  2. Straight-line depreciation (for example, leasehold improvement, patents, and limited period licences)

For complete information on the program, please click below.