INCOME TAX ACT Capital cost Allowance - Class 8 Property
IT-472 February 16, 1981 Paragraph 20(1)(a) (also Part XI of the Income Tax Regulations and Class 8
of Schedule II)
1. Paragraph 13(21)(b) of the Act defines depreciable property as property in respect of which the
taxpayer has been allowed, or is entitled to, a deduction in computing income as permitted by the
Regulations made under paragraph 20(1)(a). Class 8 property is one of the classes of property
prescribed in Schedule II of the Regulations. However, unlike other classes in Schedule II, paragraph
(i) of Class 8 provides that a tangible capital property that is not specifically included in any other class
comes within Class 8, provided that it is not specifically excluded by the exceptions in that paragraph
or by Regulation 1102. For this reason, Class 8 is sometimes referred to as the "catch-all" class. This
bulletin comments on Class 8 property with emphasis on property that is to be included in this class by
reason of paragraph (i).
2. Class 8 was originally designed to cover tangible capital assets that were not included in another
class in Schedule II. However, its scope has subsequently been enlarged and now, in addition to the
original "catch-all" provision of paragraph (i), Class 8 contains provisions for a number of inclusions
and exclusions, which may be summarized as follows: (a) Paragraphs (a) to (h) describe specific
properties which fall in Class 8, provided that they are not otherwise included in Class 2, 7, 9 or 30
(see 4 to 6 below). (b) A tangible capital property that is not included in any other class qualifies, by
reason of the "catch-all" provision in paragraph (i), for inclusion in Class 8. It should be noted that to
qualify for the inclusion it must be a tangible property and not be subject to the specific exclusions in
subparagraphs (i) to (xi) of paragraph (i) (see 7 below). (c) Paragraph (j) contains a general provision
qualifying for inclusion in Class 8 all radiocommunication equipment acquired after May 25, 1976, that
is not included in any other class. Certain property that would otherwise be included in Class 8 must be
included in one of the following classes where the property meets the description of that particular
class: Class 4, 10(g) to (t), 15, 17(a), 19, 21, 24(a), 25, 28, 29 or 34. Under certain circumstances
specified in Regulation 1103(2) a property which would otherwise be included in Class 8 that was
acquired before May 26, 1976, to produce income from a particular business may, if the taxpayer so
elects, be included in Class 2, 4 or 17 with other property acquired for that business. In addition,
property which would otherwise be included in Class 8 may be included in Class 1, if the taxpayer
elects under Regulation 1103(1) to include in Class 1 that property and all other properties otherwise
included in Classes 2 to 12 that were acquired to produce income from the same business. Finally, a
taxpayer with certain property which would otherwise be included in Class 8 may choose instead to
include that property in Class 24(b) or in Class 27, if it meets the description in that Class. On the other
hand, a taxpayer with property which would otherwise be included in Class 19 or Class 21 may elect
under Regulation 1103(2a) to include in Class 8 all the properties of either of these classes owned by
him at the beginning of a taxation year.
3. Subject to the above comments, the remainder of this bulletin deals with those properties
specifically included in or excluded from Class 8 and provides examples of assets which, in the
Department's view, qualify for inclusion in Class 8.
4.(a) A structure that is manufacturing or processing machinery or equipment is included in Class 8
under paragraph (a). Other machinery or equipment of any kind that is not specifically included in any
other class may also fall in Class 8 by reason of paragraph (i); (b) Tangible property attached to a
building is not included in the same class as the building but in Class 8 under paragraph (b), if it is
acquired solely for (i) servicing, supporting, or providing access to machinery or equipment, (ii)
manufacturing or processing, or (iii) a combination of functions in (i) and (ii). Common examples of
such property are: hoppers located outside a plant building but erected on a steel framework or other
permanent foundation, as well as the housing and framework for outdoor elevators and conveyor
systems, acquired for use in manufacturing or processing operations; concrete footings, foundations
and structural steel used exclusively for the support of machinery or equipment; stairs and platforms
used solely to provide access to machinery or equipment. It is not necessary that the building, to which
this property is attached, be owned by the taxpayer to qualify for the inclusion of that property in Class
8.
5. Class 8 includes under paragraphs (c) to (e) the following buildings or other structures: (a) A
building that is a kiln, tank or vat acquired for manufacturing or processing operations, this includes a
building that is a tobacco bulk curing kiln; (b) a building or other structure, acquired after February 19,
1973, that is designed for the purpose of preserving ensilage on a farm; (c) a building or other storage
facility, acquired after February 19, 1973, that is designed to provide storage at a controlled level of
temperature and humidity for fresh fruits and vegetables if these facilities are used principally for such
storage by the grower of such fruits and vegetables.
6. Electrical generating equipment acquired after May 25, 1976 is included in Class 8 under
paragraphs (f) to (h) if: (a) the taxpayer's business is not the production for the use of or distribution to
others of electrical energy, the equipment is auxiliary to the taxpayer's main power supply, and it is not
used regularly as a source of supply, (b) the equipment has a maximum load capacity of not more than
15 kilowatts, or (c) the equipment is portable.
7. It should be noted that tangible property that is specifically excluded from Class 8 by virtue of
subparagraphs (i) to (ix) of paragraph (i) may qualify for capital cost allowance under other provisions,
e.g. a mine is excluded from Class 8 by reason of subparagraph (v), but may qualify under Regulation
1100(1)(g) and Schedule V as an industrial mineral mine.
Property Included in Class 8 under Paragraph (i)
8. Various types of tangible capital property that are not included in any other class in Schedule II
come within Class 8 by reason of the provision of paragraph (i). The Department considers the
following property to be so included in Class 8: (a) Libraries of taxpayers practising a profession. This
includes reference libraries, data banks, land surveyor's field notes, credit bureau dockets, archives of
a notary public or reference material purchased by a taxpayer; (b) Bowling alleys, since such alleys are
not regarded as a component part of the building in which they are located; (c) An advertising sign
(e.g. poster panel, bulletin board) or electrical advertising sign (e.g. neon sign) not qualifying for
inclusion in Class 11. A sign attached to the exterior of rented premises otherwise qualifying as Class
8 property will be included in Class 13, when the sign was purchased by a tenant and must be left
behind upon expiration of his lease. This includes a removable store front door, doorway or show
window; (d) A mannequin or a dummy for merchandise display; (e) Grain handling equipment of line
an terminal grain elevators, such as: (i) dryers and related heating equipment; (ii) scales; (iii) cleaning
equipment; (iv) elevator legs, conveyors and spouting; (v) car dumpers and shovels; (iv) dust control
systems; (f) Storage and refrigeration equipment of a cold storage warehouse; refrigeration machinery
and lockers of a frozen food locker plant; and refrigerating units used in walk-in refrigeration rooms; (g)
Cobalt 60; (h) A filtration system, including the pump, for an outdoor swimming pool; also underwater
lights and the wiring therefor, ladders, diving boards, slides, etc. are included in Class 8, unless the
taxpayer includes them in Class 6 as component parts of the pool; (i) Mattresses, pillows, eiderdowns,
electric sheets, electric blankets and other bedding used by hotels and motels and not included in
"linen" under Class 12; (j) Pumping equipment of a gas or oil pipeline carrier, including engines,
motors, pumps, special foundations therefor and the costs of installation, such as heavy wiring,
transformers, etc. (but not including buildings or building foundations as such); (k) A pipeline for oil or
natural gas not included in Class 2 where the Minister has been satisfied that the main source of
supply is likely to be exhausted within 15 years; (l) Rugs and carpets initially installed to furnish a new
or renovated hotel, theatre, store or similar establishment; (m) A so-called "building" made of airsupported fabric which is not a building or other structure within the ordinary meaning of these words;
(n) Water well equipment such as casing, cribwork, piping, etc. However, the cost of drilling the well is
a deductible expense; (o) A storage tank designed for all-purpose storage of liquid products, but not an
oil or water storage tank (which must be included in Class 6(e)). On the other hand, a building that is a
tank acquired for the purpose of manufacturing or processing, although a Class 8 property, is included
in that class by virtue of paragraph (c) (see 5 above); (p) Sheet music, scores, transcriptions,
phonograph records and the like acquired by a self-employed professional musician or an orchestra;
(q) A master audio-tape or a master disc used in the phonograph record industry. However, a master
die (stamper) for processing records is a Class 12 property; (r) Returnable containers if treated by the
taxpayer (vendor) as depreciable property. This includes pallets, bread trays, cable reels, paper cores
and other shipping or cargo containers in, or by which, goods are delivered and are normally returned
for use. (For further comments see IT-165); (s) Shopping carts of the type generally used by
supermarkets; (t) Artificial snow making equipment (compressor, spray gun, piping); (u) Auto-refractor
eye-testing equipment; (v) Tile drainage if installed by the owner of land, provided that the cost thereof
was not deducted in computing income from a farming business under section 30. Where land is
purchased with tile drainage already installed, the full purchase price is considered to relate to the land
and, therefore, no part of it is subject to capital cost allowance; (w) A kitchen utensil, medical or dental
instrument, or a tool not specifically included in Class 12 (costing $200 or more); (x) A greenhouse
steam plant, except where it is located in or immediately adjacent to the greenhouse (or a combined
greenhouse and storage or shipping building) and its steam output is used primarily to heat only that
one greenhouse (or combined building). In that case, the steam plant should be regarded as a
component part of the greenhouse and subject to capital cost allowance at the class 6 rate. (y) Utility
systems such as water pipes, electrical wiring or sewer lines connecting individual units of a mobile
home or trailer park on land owned by the taxpayer, except property included in Class 2; (z) A filmstrip
(if it is acquired and used together with a motion picture film, it may be included in Class 10, 12 or 18),
see IT-283R; (aa) Telephone switching equipment acquired after May 25, 1976, and installed on the
premises of a customer of the owner of such equipment.
9. The above list of properties is not intended to be complete. It is only representative of various types
of property which qualify for inclusion in Class 8 under the present legislation. IT-79R2 entitled "Capital
Cost Allowance-Buildings or Other Structures" has additional comments on Class 8 property described
in 4, 5(a) and 8(p) of this bulletin. Comments on computer and systems software that is Class 8
property will be found in IT-283R "Capital Cost Allowance - Video Tapes, Films, Computer Software
and Master Recording Tapes".