Mobility tax deduction for tradespersons and indentured apprentices

Bill C-19, the Budget Implement Act, proposes to introduce a Labour Mobility Deduction which would provide a tax recognition of up to $4,000 per year in eligible travel and temporary relocation expenses to eligible tradespersons and apprentices. This measure will apply to the 2022 tax year and any subsequent taxation years.

• Estimates are presented on an accrual basis as would appear in the budget and public accounts.
• A positive number implies a deterioration in the budgetary balance (lower revenues or higher spending). A negative number implies an improvement in the budgetary balance (higher revenues or lower spending).

PBO used employment data from Statistics Canada and projected forward the eligible subset of tradespersons and indentured apprentices by taking the average 5-year growth rate, excluding the pandemic. To estimate the cost for eligible workers that temporarily relocate, we used estimates from Canada’s Building Trades Unions to determine the number of eligible workers and their average eligible expenses. The annual cost was indexed to inflation and capped at $4,000. No behavioural effects were assumed.

The main source of uncertainty relates to the assumptions used to determine the number of eligible workers and their average eligible expenses. A taxpayer does not qualify for the deduction if they received an allowance for these expenses from their employer or received an income tax deduction or tax credit under any other provision in the Act for the same expenses. Data on the percentage of construction workers that receive reimbursement was unavailable.