The labour mobility deduction provides eligible tradespeople and apprentices working in the construction industry with a deduction for certain temporary relocation expenses. The temporary lodging must be at least a minimum distance closer to each temporary work location than the taxpayer’s ordinary residence. It is proposed that, effective for 2026 and subsequent years, the minimum distance would be reduced to 120 km from the current 150 km. It was also proposed that the maximum deduction would increase to $10,000 from the current $4,000.
Expenditures are not eligible to the extent that the taxpayer is entitled to receive a reimbursement, an allowance or any other form of assistance in respect of the expense, unless included in the taxpayer’s income.
ACTION: Construction tradespeople and apprentices working temporarily away from home should maintain detailed records of relocation expenses, reimbursements and allowances received to calculate and claim labour mobility deductions.
An October 9, 2025 Technical Interpretation confirmed that receiving an allowance would not make a taxpayer’s expenditure completely ineligible for the labour mobility deduction but rather would reduce the amount that could be claimed. Only the portion of expenses that exceed the non-taxable allowance received from an employer would be eligible.
