Definitions for letter C (Business)

Calendar quarter

A period of three consecutive months ending on the last day of the following months:

  • March
  • June
  • September
  • December
Calendar year

A period of twelve months that begins on January 1 and ends on December 31.

Canada Pension Plan (CPP)

An insurance program to help Canadians provide income for their retirement. It also provides them with income if they become disabled. Contributions to this plan are based on an workers annual earnings.

Capital cost

This is the amount on which you first claim CCA. The capital cost of a rental property is usually the total of:

  • the purchase price, not including the cost of land
  • the part of your legal, accounting, engineering, installation, and other fees that relates to the purchase or construction of the rental property, excluding the part that applies to the land
  • the cost of any additions or improvements you made to the rental property after you acquired it, provided you have not claimed these costs as current expenses
  • for a building, soft costs (such as interest, legal and accounting fees, and property taxes) related to the period you are constructing, renovating, or altering the building, if you have not deducted these expenses as current expenses

Legal and accounting fees for buying a rental property are allocated between the cost of the land and the capital cost of the building. If land is acquired for rental purposes or for constructing a rental property, the legal and accounting fees apply to the land.

Capital cost allowance (CCA)

The deduction you can claim over a period of several years for the cost of depreciable property, that is, property that wears out or becomes obsolete over time such as a building, furniture, or equipment, that you use in your business or professional activities.

Capital expense

Capital expenses provide a benefit that usually lasts for several years. For example, costs to buy or improve your property are capital expenses. Generally, you cannot deduct the full amount of these expenses in the year you incur them. Instead, you can deduct their cost over a period of several years as capital cost allowance (CCA).

These expenses can include:

  • the purchase price of rental property
  • legal fees and other costs connected with buying the property
  • the cost of furniture and equipment you are renting with the property
Capital gain

You have a capital gain when you sell, or are considered to have sold, a capital property for more than the total of its adjusted cost base and the outlays and expenses incurred to sell the property.

Capital loss

You have a capital loss when you sell, or are considered to have sold, a capital property for less than the total of its adjusted cost base and the outlays and expenses incurred to sell the property.

Capital property

Capital property generally include:

Cash method of accounting

With this method, you report income in the fiscal period you receive it, and deduct business expenses in the fiscal period you pay them. 

Commercial activity

Any business, adventure, or concern in the nature of trade carried on by a person.

Commercial activity also includes making a supply of real property, other than an exempt supply, by any person, whether or not there is a reasonable expectation of profit, and anything done in the course of making the supply or in connection with the making of the supply.

These activities do not include: 

  • the making of exempt supplies
  • any business or adventure or concern in the nature of trade carried on without a reasonable expectation of profit by an individual, a personal trust, or a partnership where all the members are individuals
Common-law partner

A person who is not your spouse with whom you are living in a conjugal relationship, and to whom at least one of the following situations applies:

  • they have been living with you in a conjugal relationship for at least 12 continuous months
  • they are the parent of your child by birth or adoption
  • they have custody and control of your child (or had custody and control immediately before the child turned 19 years of age) and your child is wholly dependent on that person for support

For more information, go to Update your CRA information: Change your marital status.


The privacy of tax related information. The only people with access to your confidential information is you, those who are authorized by law, and those to whom you have given written permission.


A form of business authorized by federal, provincial, or territorial law to act as a separate legal entity. Its purpose and regulations are set out in its articles of incorporation

Cost of goods sold

The actual cost of the items sold in the normal course of business.

Current expense

Current or operating expenses are recurring expenses that provide a short-term benefit. For example, the cost of repairs you make to keep a asset in the same condition as it was when you acquired it. You can deduct current expenses from your gross income in the year you incur them.

Customs duties

Taxes you pay when you bring foreign goods into Canada.

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