I bought a laptop in December. Can I deduct the whole cost on this year's return?

No, and for two separate reasons. A laptop is depreciable property, so paragraph 18(1)(b) of the Income Tax Act denies a deduction for the purchase itself and the cost comes off instead through capital cost allowance, spread over several years. On top of that, CCA generally starts when the property becomes available for use. For property other than a building, that is usually the earlier of the date you first use it to earn income, the second tax year after the year you acquire it, and the moment just before you dispose of it. A machine still in its box on December 31 has not become available for use, so it does nothing for that year at all. Buy the equipment because the business needs it. Do not buy it in the last week of December expecting the price to come off that year's income.

Should I claim capital cost allowance in a year when I barely earned anything?

Often not, and the choice is genuinely yours. CRA guide T4002 is explicit that you do not have to claim the maximum amount of CCA in any given year, that you can claim any amount you like from zero to the maximum allowed, and that if you do not have to pay income tax for the year you may not want to claim CCA at all. The mechanism behind that advice matters: every dollar of CCA you claim reduces the balance of the class, which reduces the CCA available to you in later years. Carrying the room forward to a year when the deduction is actually worth something is ordinary planning, not an aggressive position. It only works if someone is tracking the class balances year over year, which is precisely the kind of thing that gets lost when the books are done once, in a hurry, in April.

Is a big equipment purchase deductible this year?

The purchase is not the deduction

Paragraph 18(1)(b) of the Income Tax Act blocks any deduction for an outlay, loss or replacement of capital, a payment on account of capital, or an allowance in respect of depreciation, except as expressly permitted. Paragraph 20(1)(a) is that express permission: you may deduct such part of the capital cost of property as is allowed by regulation. The permitted part has a name, capital cost allowance, and it arrives in instalments.

CRA guide T4002 puts it plainly. You might acquire a depreciable property, such as a building, furniture or equipment, to use in your self-employment activities. You cannot deduct the cost of that property in the year. Since these properties may wear out or become obsolete over time, you deduct their cost over a period of several years, and that deduction is capital cost allowance.

The money leaves in one year. The deduction arrives in slices across several. Quebec works the same way: section 129 of the Taxation Act excludes payments on account of capital and allowances for depreciation, and section 130(a) lets you deduct the prescribed part of the capital cost instead.

Telling a capital purchase from a current expense

Not every business purchase is capital. CRA sets out four tests, in order of weight.

Lasting benefit. A capital expense generally gives a lasting benefit or advantage. A current expense usually recurs after a short period.
Maintain or improve. A repair that improves the property beyond its original condition is probably capital. One that simply restores it to its original condition is usually current.
Part or separate asset. Buying a separate asset is capital. Replacing one part of something you already own is usually current.
Value. Use this test only if the first three leave the answer open, by comparing the cost to the value of the property.

The guide's summary is worth keeping: you cannot claim expenses you incur to buy capital property, but as a rule you can deduct any reasonable current expense you incur to earn income.

The clock starts on use, not on payment

This is the part that decides whether a year-end purchase does anything at all. You can usually claim CCA on a property once it becomes available for use. For property other than a building, that is generally the earliest of three moments: the date you first use it to earn income, the second tax year after the year you acquire it, and the instant just before you dispose of it.

So a machine bought on December 20, 2026 and left boxed until February does nothing for 2026. The invoice is dated. The asset is not yet in service.

Even once it is in service, the first year rarely gives you a full claim. In the year you acquire depreciable property you can generally claim CCA on only half your net additions, which is the half-year rule. Some property sits outside it. Qualifying property acquired after 2024 and available for use before 2034 can instead attract an enhanced first-year allowance under the reaccelerated investment incentive. Which treatment applies depends on the class the property falls into, so the first-year figure has to be worked out rather than assumed.

You decide how much to claim

CCA is not automatic and it is not all or nothing. You can claim any amount from zero up to the maximum allowed for the year, and in a year with little or no tax to pay there is often no reason to claim it, because every dollar claimed shrinks the balance of the class and the room available later. For a sole proprietor the yearly total goes to line 9936 of form T2125.

That is the real answer to the year-end question. The purchase is a business decision. The timing of the deduction is a separate one, and it is worth making on purpose.