The Capital Cost Allowance is "a tax deduction that Canadian tax laws allow a business to claim for the loss in value of capital assets due to wear and tear or obsolescence" (Canada Revenue Agency).
So if you buy a property or a piece of equipment to use in your business, you can't deduct the entire cost of it on your income tax for that particular year. Instead, you use the Capital Cost Allowance to deduct a calculated portion of the expense as an income tax deduction and continue doing this over a period of years as the property or the equipment depreciates.
How much Capital Cost Allowance you can claim each year depends on when you acquired the property and what CCA class it belongs to. The Canada Revenue Agency has assigned classes to particular types of depreciable property, and there are assigned rates for each class. To learn the details about Capital Cost Allowance rates, refer to Chapter 4 of the Canada Revenue Agency's Guide For Canadian Small Businesses. There is a link to this publication in my Canadian Tax Information Library.
