Spring Economic Update 2026: key tax and affordability measures

The federal government released its Spring Economic Update 2026 (Canada Strong for All) on April 28, 2026. The update includes a combination of measures that are already in effect, measures announced as the government’s intention (requiring legislation or regulations), and consultations that may lead to future changes. 

The update was released amid ongoing trade uncertainty and higher global energy prices. Canada’s economy grew 1.7% in 2025. Inflation was 2.4% in March and has remained within the Bank of Canada’s 1–3% target range for more than two years. The 2025–26 deficit is now projected at $66.9 billion (2.1% of GDP). 

Personal income tax measures

Middle-class tax cut: The reduction to the lowest personal income tax rate, first announced in Budget 2025, is in effect. 

Disability Tax Credit (DTC) streamlined access: For the 2026 and subsequent tax years, the government proposes to streamline the DTC application process for individuals with certain long-lasting medical conditions (listed in the supplementary information) by allowing a qualified practitioner to certify the diagnosis, without having to complete detailed sections on functional impacts (the eligibility criteria themselves are not changing). The update also proposes (for DTC certificates issued after 2026 for the 2027 and subsequent tax years) to expand who can certify certain impairments (e.g., adding podiatrists for walking impairments and expanding impairment types that certain practitioners can certify). Provincial and territorial public guardians and trustees would also be recognized as qualified to certify for adults in their care (for 2026 and subsequent tax years), subject to conditions. 

Home Buyers' Plan extended grace period (proposed): Budget 2024 temporarily increased the grace period before Home Buyers' Plan (HBP) repayments must begin from two years to five years for participants making a first withdrawal between January 1, 2022 and December 31, 2025. The update proposes extending that five-year grace period to cover first withdrawals made between January 1, 2026 and December 31, 2028. 

Labour Mobility Deduction for Tradespeople increased limits: Effective for the 2026 and subsequent tax years, the maximum annual deduction for eligible temporary relocation expenses is increased from $4,000 to $10,000 (indexed to inflation going forward). The minimum distance threshold is also reduced from 150 kilometres to 120 kilometres. 

Canada Student Grants and Loans extended increases: For the 2026–27 academic year, full-time Canada Student Grants are maintained at $4,200 (up from $3,000) and interest-free Canada Student Loans at $300 per week (up from $210). Increases are proportionally extended to part-time students, students with disabilities, and students with dependents. 

Business and investment tax measures 

SR&ED pre-claim approval process launched: Effective April 1, 2026, the Canada Revenue Agency (CRA) introduced an elective pre-claim approval process for Scientific Research and Experimental Development (SR&ED) projects. Businesses can seek an eligibility determination in four steps within eight weeks before undertaking work or incurring costs. For claims submitted through this elective process that require an expenditure review, processing time is expected to be reduced from 180 days to 90 days. 

Carbon Capture, Utilization, and Storage (CCUS) Investment Tax Credit proposed expansion to enhanced oil recovery (EOR): The update proposes making EOR an eligible use for the refundable CCUS investment tax credit (subject to the designation of an eligible jurisdiction by the Minister of the Environment). For EOR, the effective credit rates would be set at one half the standard rates: 30% (direct air capture equipment), 25% (other capture equipment), and 18.75% (transportation, storage and use equipment) from the date of the update to the end of 2035; and 15%, 12.5%, and 9.375%, respectively, from 2036 to the end of 2040. Projects would be required to permanently store captured CO₂. 

Employee Ownership Trust (EOT) tax exemption (proposed to be made permanent): The update proposes to make permanent the $10 million capital gains exemption on the sale of a qualifying business to an employee ownership trust or worker cooperative corporation. The exemption currently applies to qualifying dispositions of shares that occur after 2023 and up to the end of 2026. 

Accelerated Capital Cost Allowance (CCA) for low-carbon LNG facilities: The update proposes implementation details for Budget 2025’s proposed reinstatement of accelerated CCAs for eligible liquefied natural gas equipment and buildings. Facilities with expected on-site emissions intensity at or below 0.20 tCO₂e per tonne of LNG produced would qualify for an accelerated CCA rate of 50% on liquefaction equipment (Class 47) and 10% on related non-residential buildings (Class 1). Eligible assets would generally need to be acquired on or after November 4, 2025 and before 2035, and the facility would need to be certified by the Minister of Energy and Natural Resources. 

Advance income tax rulings (priority focus): The CRA will prioritize advance income tax ruling requests related to large-scale nation-building projects (e.g., housing and infrastructure), as well as requests related to productivity-enhancing investments and clean economy investment tax credits.