The 2026 Spring Economic Update (SEU) sets out the government’s plan to introduce Canada’s first sovereign wealth fund—the Canada Strong Fund (the Fund). The Fund will invest in strategic Canadian projects and companies with a clear objective to build Canada’s wealth. The government will initially provide $25 billion over three years to seed the Fund.
No changes to personal or corporate income tax rates were proposed in the 2026 SEU, but other highlights are below.
Proposed Measures to Support Workers
- A reduction in the contribution rate in the base Canada Pension Plan (CPP) from 9.9 percent to 9.5 percent, effective Jan. 1, 2027. This would translate into annual savings of about $133 for an employee earning $70,000 a year, with equivalent savings for their employer.
- Amend the Employment Insurance Act to extend the temporary measure that provides up to five additional weeks of Employment Insurance regular benefits to seasonal claimants in 13 regions until Oct. 2028.
- The Labour Mobility Deduction for Tradespeople allows eligible construction workers who temporarily relocate to deduct up to $4,000 in yearly expenses. This proposal would increase the limit to $10,000 in 2026. Temporary lodging must be at least 120 km closer than the taxpayer’s ordinary residence.
Home Buyers’ Plan (HBP)
The HBP helps eligible home buyers by allowing them to withdraw up to $60,000 from an RRSP to purchase or build their first home without having to pay tax on the withdrawal.
Previously, HBP withdrawals had to be repaid over a maximum of 15 years, with a two-year grace period. The 2024 Budget temporarily increased the grace period to five years—this proposal would extend that five-year grace period.
Disability Tax Credit (DTC)
To improve the DTC application for persons with disabilities and for their families, and reduce paperwork for medical practitioners, the government proposes to:
- Streamline the application process for individuals with a formal diagnosis of certain long-lasting medical conditions (e.g., Alzheimer’s, severe Parkinson’s, etc.).
- Expand the list of medical practitioners who can certify eligibility for the DTC and broaden the types of impairments that can be certified by physiotherapists, speech-language pathologists and occupational therapists, within the scope of their training and practice.
- Recognize provincial/territorial public guardians and trustees as qualified to certify on behalf of adults in their care who have a valid certificate of incapacity based on a medical practitioner’s assessment of their mental impairment.
Whether you’re saving for a home, planning for retirement, or supporting a loved one with a disability, these updates may open new doors for you — and I can help.
This article may contain several strategies, not all of which will apply to your particular financial circumstances. The information in this article is not intended to provide legal, tax or insurance advice. To ensure that your own circumstances have been properly considered and that action is taken based on the latest information available, you should obtain professional advice from a qualified tax advisor before acting on any of the information in this article.
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