Machinery bought to make things has its cost deducted over years through capital cost allowance (CCA). Class 53 is the class for manufacturing and processing machinery, and it covers a specific window of acquisition years. On Form T2125, Statement of Business or Professional Activities, it is one of the class rows in Area A.
What goes in this class
Eligible machinery and equipment that:
- was acquired after 2015 and before 2026
- would generally otherwise be included in Class 29
- is used in Canada primarily in the manufacturing or processing of goods for sale or lease
The class has its own rate, set out on the Canada Revenue Agency (CRA)'s page of classes.
What does not
Machinery acquired outside that window. The class is closed to acquisitions after 2025. Eligible machinery and equipment used in Canada primarily to manufacture and process goods for sale or lease that is not included in Class 29 or Class 53 goes to Class 43 instead.
Worth knowing
Class 53 property may benefit from the enhanced first-year CCA that previously provided full expensing of the property in the year of acquisition. That enhanced first-year CCA is now being gradually phased out for property that becomes available for use after 2023 and before 2028.
Under proposed changes, the phase-out only applies to property acquired before 2025, and a new enhanced first-year CCA applies to Class 53 property acquired after 2024. To be eligible, qualifying property has to be acquired on or after January 1, 2025 and before 2026.
The proposed part is not settled law, so the first-year treatment is worth confirming when you file.
What to keep
Keep the purchase invoice for the machinery, showing the seller, the date, and what was bought. Both the class and the first-year treatment turn on when the property was acquired and when it became available for use, so keep any delivery, installation, or commissioning paperwork alongside the invoice — it is what shows the available-for-use date.
Keep the paperwork for machinery you dispose of as well, since a disposition changes the class balance. Dossier tags the invoice and files it with the year's records, so it is there when you file. Don't send it in with your return — keep it in case the CRA asks to see it.
Official CRA sources
Source: Canada Revenue Agency (canada.ca). Not tax advice.