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Proposed Amendment May Restrict Moving Expenses

Under the existing definition of "eligible relocation," a Canadian taxpayer who relocates from Canada to a foreign country, or between locations outside of Canada, for work can generally deduct moving expenses paid.

However a proposed amendment to the definition of "eligible relocation" may significantly curtail this procedure. Taxand Canada investigates what this new amendment would entail.

The inconsistency between the current definition of "eligible relocation" and the Canada Revenue Agency's positioning on the matter has motivated the proposed amendement to what the term means.

The proposed new definition of "eligible relocation" means a relocation of a taxpayer in respect of which the following apply:

  • a) The relocation occurs to enable the taxpayer:
    • i. to carry on a business or to be employed at a location that is, except if the taxpayer is absent from but resident in Canada, or
    • ii. to be a student in full-time attendance enrolled in a program at a post-secondary level at a location of a university, college or other educational institution.
  • b) The taxpayer ordinarily resided before the relocation at a residence and ordinarily resided after the relocation at a residence.
  • c) Except if the taxpayer is absent from but resident in Canada, both the old residence and the new residence are in Canada the distance between the old residence and the new work location is not less than 40 kilometers greater than the distance between the new residence and the new work location.


Your Taxand contact for further queries is :
Eric Koh
T. +1 613 786 0121



Taxand's Take

Given the preferential treatment of taxpayers who move out of Canada and between locations outside of Canada, it is understandable that the Department of Finance would want to amend the definition of "eligible relocation" to ensure that all taxpayers are treated equally. Unfortunately, the effect of the proposed amendments may be to allow only individuals or taxpayers who move between locations in Canada to deduct their moving expenses.

Taxand's Take Author