To address rising interest rates, the Department of Finance announced that new auto deduction limits will come into effect as of January 1, 2022.
- The ceiling for capital cost allowances (CCA) for zero-emission passenger vehicles will be increased to $59,000 from $55,000 for vehicles acquired after January 1, 2022.
- The ceiling for CCA for passenger vehicles (new and used) will increase from $30,000 to $34,000, before tax, acquired on or before January 1, 2022.
- Deductible leasing costs on new leases will increase from $800 to $900 per month before tax.
- Employer allowances on personal use of employee vehicles for business purposes in provinces will increase by 2 cents to 61 cents per km for the first 5,000 kms driven, and 55 cents for each additional km. The territories will increase by 2 cents to 65 per km for the first 5,000 kms and 59 cents for each additional km.
- The general prescribed rate to determine the taxable benefit related to the personal portion of auto expenses paid by the employer will increase 2 cents to 29 cents per km. For people employed in selling or leasing vehicles, the rate will increase by 2 cents to 26 cents per km.
See the press release for more information.
