What’s Changed
Starting with the 2026 and subsequent taxation years, eligible tradespeople and apprentices in Canada can now claim a Labour Mobility Deduction of up to $10,000 annually, up from the prior $4,000 limit.(deloitte.com) The rules regarding distance have also been clarified: the temporary work location must be at least 120 km closer to the worksite than the taxpayer’s ordinary residence. The limit will be indexed each year.(deloitte.com)
Who Qualifies
- Tradespeople or apprentices who temporarily relocate for employment—moving from home to job site.
- The relocation must meet distance tests: the temporary work location must be significantly closer to the work site.(see 120 km rule above).(deloitte.com)
- Expenses may include lodging, transportation, and other relocation costs, provided they meet CRA guidelines.
How to Claim
- Deduct eligible relocation expenses on your annual tax return under the labour mobility rules.
- Keep good records: mileage, lodging receipts, proof of temporary duration, dates of travel, proof that work location requires relocation.
- At tax time, use the increased ceiling and make sure you apply the correct rule set for 2026 or later.
Practical Planning Tips
- For jobs planned mid-year (after Jan 1, 2026), estimate potential moving/relocation expenses to see if it’s worth incurring them.
- Contractors may shift timing of contracts to align with the deduction change.
- If you expect recurring temporary postings, track all qualifying moves: multiple relocations may sum up near the $10,000 deductible limit.
Example
A journeyman electrician works partly in his home city but assigned to a site 200 km away for 3 months. Prior limit $4,000 may cover lodging and travel. With new $10,000 limit, he can deduct more lodging and meals over that period, reducing taxable income.
Limitations & Risks
- Non-residents or permanently relocated employees may not qualify under labour mobility rules.
- Deduction only applies if temporary; permanent relocation falls under different tax rules.
- Distance and worksite-residence requirements must be met exactly; missteps may lead to audit adjustments.
This update gives tradespeople substantial added relief on relocation costs. Timing projects and tracking moves can unlock savings now available under the revised rules.