Capital Cost of Passenger Vehicles

The ceiling for CCA for passenger vehicles will be increased from $38,000 to $39,000, before tax, in respect of vehicles (new and used) acquired on or after January 1, 2026.

The ceiling for capital cost allowances (CCA) for zero-emission passenger vehicles will remain at $61,000, before tax, in respect of vehicles (new and used) acquired on or after January 1, 2026.

Leasing Costs

Deductible leasing costs will remain at $1,100 per month, before tax, for new leases entered into on or after January 1, 2026. 

Tax-Exempt Allowance Limit

The limit on the deduction of tax-exempt allowances paid by employers to employees who use their personal vehicle for business purposes will increase by one cent to 73 cents per km for the first 5,000 km’s driven, and 67 cents for each additional km.

Maximum Allowable Interest Deduction

The maximum allowable interest deduction for amounts borrowed to purchase an automobile will remain at $350.00 per month for loans related to vehicles acquired after January 1, 2026.

2026 Automobile Allowance

The automobile allowance rates for 2026 are:

• 73¢ per kilometre for the first 5,000 kilometres driven
• 67¢ per kilometre driven after that

January 14, 2026 – Ottawa, Ontario – Department of Finance Canada

Contact SSL Group for more information.