Compliance
Compliance Essentials under Bill C-30: What Employees and Employers Must Know
Bill C-30 introduces several tax and payroll-related changes that affect both employers and workers. Here's a guide to staying compliant and minimizing surprises.
By NomadicTax Research Team • 5-8 min read • July 8, 2026
## Overview of Bill C-30 Changes with Compliance Implications
Bill C-30 was granted Royal Assent on **June 19, 2026**, bringing into law multiple fiscal measures from the Spring Economic Update. ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/06/legislation-passes-to-implement-measures-from-the-spring-economic-update-2026.html?utm_source=openai)) Key changes include:
- Federal excise tax suspended for gasoline/diesel (April 20 – September 7, 2026)
- CPP contribution rate drop from **9.9% to 9.5%**, effective **January 1, 2027**
- Labour Mobility Deduction changes: threshold 150 km → 120 km, deduction cap raised from $4,000 to $10,000 annually
- Increased support for Employee Ownership Trusts and co-operatives via permanent capital gains exemption for certain business transfers ([canada.ca](https://www.canada.ca/en/department-finance/news/2026/06/legislation-passes-to-implement-measures-from-the-spring-economic-update-2026.html?utm_source=openai))
## What Employers Must Do
- **Update payroll software and tables**: With CPP rate change effective Jan 1, 2027, payroll settings must adjust accordingly beforehand so deductions are correct for new rate.
- **Implement Labour Mobility Deduction changes**: Ensure HR understands that employees whose work location moves or travel crosses the 120 km minimum may now claim more deductions; track eligible distances and expenses accurately.
- **Adjust fuel excise settings**: Employers in transportation or fleet operations must account for temporary removal of federal fuel excise tax, adjusting invoicing or expense reimbursements during suspension period.
## What Employees Should Know
- Review your paycheck beginning in early 2027 to ensure CPP deductions reduce to the new 9.5% rate. If you see mismatches, contact payroll immediately.
- If you're travelling or relocating temporarily for work, track mileage and costs carefully—the lowered minimum distance makes more employees eligible for Labour Mobility Deduction.
- For business owners considering succession planning: assess if qualifying transfer to an employee ownership trust or worker co-op can take advantage of the $10 million capital gains exemption. This could reduce taxable gains significantly when you sell or transfer business.
## Example Compliance Scenarios
- **Seasonal worker** driving 130 km daily to temporary job: Previously no deduction; with threshold now at 120 km, now eligible for up to $10,000 deduction—track distances, save receipts.
- **Small company where owner-manager plans to sell to employees via trust**: If the sale qualifies, up to $10 million in capital gains could be exempt—careful structuring is essential.
## Action Checklist for Q3-Q4 2026
1. Confirm payroll systems will switch over to new CPP rate for Jan 2027.
2. Train HR/tax accounting on Labour Mobility Deduction eligibility changes.
3. Review contracts, benefits, and reimbursements re fuel excise suspension (e.g. rebates or allowances).
4. Consult legal/tax advisors if planning transfers to employee ownership trusts to ensure qualification.
---
**In summary**: Bill C-30 brings several changes that have immediate and upcoming compliance requirements for both employees and employers. Staying ahead means updating systems, tracking eligibility, and planning transactions carefully to make the most of these new benefits.