Labour Mobility Deduction: Temporary Relocation Expenses

The labour mobility deduction can provide eligible tradespeople and apprentices in the construction industry with a deduction for certain temporary relocation expenses.

Proposed 2026 Enhancements

For 2026 and subsequent years, the federal government has proposed:

• Reducing the required minimum relocation distance from 150 kilometres to 120 kilometres.
• Increasing the maximum deduction from $4,000 to $10,000.

The temporary lodging must generally be sufficiently closer to the temporary work location than the taxpayer's ordinary residence.

Employer Allowances and Reimbursements

Expenses are not deductible to the extent that the taxpayer receives reimbursement, an allowance or other assistance for the expense, unless the amount received is included in income.

An October 9, 2025 CRA Technical Interpretation clarified that receiving a non-taxable allowance does not necessarily make all relocation expenses ineligible.

Instead, only the portion of eligible expenses that exceeds the non-taxable employer allowance may qualify for the deduction.

Action: Construction tradespeople and apprentices working temporarily away from home should retain detailed records of lodging, travel and relocation expenses, as well as allowances or reimbursements received.