You’re fantastic at what you do. Whether you’re framing a dream home on a Gulf Island or overhauling a commercial space on the Sunshine Coast, you nail it every time. But what about the other side of the business? The paperwork, the numbers, and that nagging question: am I paying way too much in tax?
For contractors in coastal British Columbia, the cost of doing business is more than just materials and labour. It’s the BC Ferries lineups, the long drives to remote sites, and the overnight stays. These expenses add up, and they add up fast. The good news? The Canada Revenue Agency (CRA) lets you claim a lot of them. You just have to know the rules.
Let’s cut through the coastal fog and figure out how you can maximize your remote construction expense claims for taxes here in BC.
The Island Contractor’s Dilemma: Why Your Expenses Are Unique
Working here is just… different. A simple trip to a job site isn’t a hop in the truck. It can be an all-day event involving a ferry sailing, long waits, and significant costs before you’ve even hammered a single nail. You might be hauling a trailer full of tools to Cortes Island or setting up a small crew in a rental near a Tofino project. These aren’t just minor inconveniences—they are significant, recurring business expenses that directly impact your bottom line. Recognizing them as such is the first step to reclaiming your profits.
What Does the CRA Actually Consider a ‘Business Trip’?
Before we get into the nitty-gritty, let’s get one thing straight. The CRA has a pretty simple test for what counts as business travel. You can deduct travel expenses as long as they are incurred for the purpose of earning business income. It’s really that simple.
Think about it this way: would you be taking that ferry or staying in that hotel if it wasn’t for this specific, paying project? If the answer is no, you’re almost certainly looking at a legitimate business expense. The trip has to be a part of your business operations, not a personal vacation where you happen to do a little work.
Navigating the Waters: Claiming Your BC Ferries and Transportation Costs
This is the big one for most coastal contractors, so let’s get right to it.
Yes, you can absolutely claim the cost of your BC Ferries fares for your work truck, your crew, and any trailers or equipment you’re hauling to a job site. It’s a direct transportation cost.
But it doesn’t stop there. Your vehicle expenses are a goldmine of deductions, as long as you track them correctly. You’ve got two options:
- The Full Logbook Method: This is usually the best bet for busy contractors. You track all of your vehicle expenses—fuel, insurance, repairs, maintenance, lease payments, everything. You also keep a logbook of every kilometre driven for the year, noting which trips were for business. At the end of the year, you figure out your business-use percentage (e.g., 18,000 business km / 20,000 total km = 90% business use) and claim that percentage of your total vehicle costs.
- The Simplified Method: You still track your business kilometres, but instead of tracking every single receipt, you just multiply your business KMs by a set per-kilometre rate from the CRA. It’s definitely easier, but you often leave money on the table compared to the full logbook method.
And don’t forget other travel! Costs for floatplanes to remote inlets or water taxis to islands without ferry service are also deductible if they’re for a project.
Beyond the Journey: Deducting Costs at a Remote Work Site
Once you get to the site, the expenses keep rolling in. Here’s what you can claim when you or your team are working away from your usual home base:
- Accommodation: Hotels, motels, and short-term rentals are fully deductible.
- Meals: You can claim 50% of the cost of food and drinks while you’re away for work. This counts whether you’re eating at restaurants or buying groceries to cook at your rental.
- Crew Expenses: If you’re paying for your employees’ or subcontractors’ travel, lodging, and meals at a remote site, those costs are deductible business expenses for you.
- Tool & Equipment Transport: The cost to ship or haul specific tools and equipment needed for that job is a valid deduction.
The Most Important Tool in Your Belt: Flawless Record-Keeping
Let’s be blunt: deductions without proof are just wishes. If the CRA ever comes knocking for an audit, your records are your only defense. Think of your receipts and logbooks as the blueprints for your tax return—without them, the whole thing falls apart.
Make it a habit. For every single business trip, you need to keep:
- All receipts: Fuel, ferry tickets, meals, hotels. All of it.
- A mileage log: Whether it’s a notebook in your glovebox or a slick app on your phone, log the date, destination, purpose of the trip, and the start/end odometer readings.
- Clear purpose: A credit card statement that just says “Chevron” isn’t good enough. Your records should make it totally obvious that the expense was for a specific project.
This doesn’t have to be a nightmare. Apps like Dext or QuickBooks Self-Employed can snap pictures of receipts with your phone, and a simple spreadsheet can work wonders for mileage.
Putting It All Together: A Vancouver Island Project Example
Let’s make this real. Imagine you’re a Nanaimo-based renovator and you land a sweet two-month project on Salt Spring Island.
What could you claim? Potentially, all of this:
- Transportation: The round-trip BC Ferries fares from Crofton to Vesuvius for your work truck, maybe once a week.
- Vehicle Costs: The business-use portion of your fuel, insurance, and maintenance for the entire year, backed up by a mileage log that shows all those trips to the ferry and the job site.
- Accommodation: The cost of that little cottage you rented on Salt Spring for the whole project.
- Meals: 50% of your grocery bills and any restaurant meals you had while staying on the island for work.
When you add it all up, these deductions can literally save you thousands of dollars in taxes. It’s not about cheating the system; it’s about claiming what you are rightfully owed.
Don’t Get Audited Adrift: When to Call a Professional
While this guide gives you a solid map, every business’s financial waters are different. Your company structure, the size of your projects, and your specific expenses all play a role in building the best tax strategy. A quick chat with an expert who gets the construction industry can make sure you’re not leaving money on the table or accidentally sailing into an audit storm.
Navigating CRA rules can be a headache, and your time is better spent on the job site. For advice tailored to your construction business, it’s always best to connect with a professional accountant. You can get in touch with our team here to make sure your books are shipshape and you’re maximizing every possible deduction.
Frequently Asked Questions
1. Can I claim the cost of my crew’s travel and accommodation on a remote project? Yes, you absolutely can. If you’re footing the bill for travel, lodging, and meals for your employees or subs to work at a remote site, these are fully deductible business expenses for you.
2. Does it matter if I’m a sole proprietor versus an incorporated business in BC? The kinds of expenses you can claim are pretty much identical. The real difference is how you claim them. A sole proprietor claims them on a T2125 form with their personal T1 tax return. An incorporated business claims them on its T2 corporate tax return. How you pay yourself (salary vs. dividends) can also change the bigger tax picture.
3. My truck is my personal vehicle, but I use it for work 90% of the time. How do I properly claim expenses like insurance and repairs? This is exactly what the full logbook method was made for. You have to track all your kilometres for the whole year to prove that 90% business use. Once you establish that percentage, you can deduct 90% of all eligible vehicle expenses—fuel, insurance, repairs, lease payments, and even the capital cost allowance (depreciation).
4. I stayed with a friend near a job site instead of a hotel. Can I still claim any accommodation or meal expenses? You can’t claim a cost for accommodation if you didn’t actually have one (meaning, you can’t just pay your friend “rent” and deduct it unless they’re declaring it as rental income). But, you can still claim 50% of your actual meal costs for every day you had to be away from home for work.
5. Are the tools I have to buy specifically for a remote job tax-deductible as a travel or site expense? Tools aren’t really a travel expense. Small tools under about $500 can often be written off completely in the year you buy them. More expensive tools are considered capital assets, meaning you deduct a bit of their cost each year over several years (this is called the Capital Cost Allowance, or CCA). The cost to get the tools to the site, however, is a travel expense.
6. What if a project spans two different tax years? How do I handle the expenses? You claim expenses in the fiscal year you actually paid for them, not when you get paid for the project. So, if a job runs from November 2023 to February 2024, all the ferry, fuel, and hotel costs from November and December get claimed on your 2023 tax return, and the costs from January and February go on your 2024 return.