Traveling for a temp labour gig? This tax break is for you.

Budget 2022 introduces a Labour Mobility Deduction for Tradespeople to recognize certain travel and relocation expenses of workers in the construction industry, for whom such relocations are relatively common. This measure would allow workers to deduct up to $4,000 in expenses per year.

For the purposes of this deduction, an eligible tradesperson or apprentice:

• makes a temporary relocation that enables them to obtain or maintain employment of a temporary nature in a construction activity at a particular work location in Canada; and
• ordinarily resided prior to the relocation at a residence in Canada

To qualify as an eligible temporary relocation:

• the temporary lodging must be at least 150 kilometres closer than the ordinary residence to the particular work location; and
• the temporary relocation must be for a minimum of 36 hours.

To ensure that the measure does not subsidize long-distance commuting or expenses of those who choose to live far from where they typically work, the particular work location must not be in the locality in which the individual usually works.

Eligible expenses would be reasonable amounts associated with:

• temporary lodging near the particular work location;
• transportation for one round trip from the location where the individual ordinarily resides to the temporary lodging; and
• meals while making one round trip to and from the temporary lodging. An individual cannot claim lodging expenses under this measure unless they maintain an ordinary residence elsewhere that remains available for their or their immediate family’s use during that time period.

An individual cannot claim expenses for which they received financial assistance from an employer that is not included in income.

• The maximum amount of expenses that could be claimed would be capped at 50 per cent of the worker’s employment income from construction activities at the particular work location in the year.
• Flexibility would be provided by allowing expenses to be claimed in a tax year before or after the year they were incurred. This would enable workers to claim expenses in the tax year they earned the associated employment income and address cases where expenses related to a relocation span two tax years.
• Amounts claimed under the Labour Mobility Deduction for Tradespeople would not be deductible under the existing Moving Expense Deduction. Similarly, amounts that are otherwise deducted could not be claimed under the Labour Mobility Deduction for Tradespeople.

This measure would apply to the 2022 and subsequent taxation years.