Accelerated investment incentive

The accelerated investment incentive (AII) measure provides an enhanced first-year allowance for certain eligible property (EP).

The incentive’s general rule does not apply to Classes 54, 55 and 56. It also does not apply to Classes 43.1, 43.2 and 53 (or to Class 43 in respect of property acquired after 2025 that would have been included in Class 53 if it had been acquired in 2025), as they benefit from the full expensing measures.

The incentive’s general rule is made up of two elements:

applying the prescribed CCA rate for a class to up to one-and-a-half times the net addition to the class for the year
suspending the CCA half-year rule (and equivalent rules for Canadian vessels and Class 13 property)
As a result, EP that would be subject to the half-year rule, in essence, qualifies for an enhanced first-year allowance equal to three times the normal first-year deduction. EP not normally subject to the half-year rule (for example, a patent, franchise or limited-period licence) qualifies for one-and-a-half times the normal first-year deduction. For more information, see Example 3.

If the undepreciated capital cost (UCC) of a class increases in a year by an investment in both EP and non-eligible property (NEP), and an amount (for example, a disposition) decreases the UCC of the class, you must first reduce the cost of NEP additions before reducing the cost of EP additions.

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

declining-balance basis (for example, intangible property, included in Class 14.1)
straight-line depreciation (for example, leasehold improvements, patents, and limited period licences)