Spring Economic Update 2026: Tax Highlights
On April 28, 2026, the federal government released its Spring Economic Update 2026, “Canada Strong for All”, introducing several targeted tax measures affecting individuals and businesses. Crowe MacKay’s trusted advisors outline the key personal and business tax measures below.
Personal Tax Measures
Disability Tax Credit (DTC)
The Disability Tax Credit (DTC) is a non‑refundable tax credit intended to recognize the impact of disability‑related costs on an individual’s ability to pay tax. For 2026, the credit amount is $10,341, providing a federal tax reduction of up to $1,448.
The Spring Economic Update 2026 proposes several administrative changes intended to simplify access to the DTC for individuals with certain long‑lasting medical conditions. For individuals diagnosed with specified conditions, a qualified medical practitioner would only need to certify that the individual has the condition, without having to provide detailed attestations regarding the severity and functional impacts of the impairment. However, the underlying eligibility criteria for the DTC would not change, and the Canada Revenue Agency would continue to have authority to request additional information where appropriate.
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Alzheimer's disease
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Amyotrophic lateral sclerosis / Lou Gehrig disease
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Angelman syndrome
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Autism spectrum disorder, level 3
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Bilateral blindness (legally blind)
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Bilateral hearing loss (severe or profound)
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Cardiac functional class of 4/IV or an ejection fraction of 20% or less
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Cerebral palsy (severe)
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Chronic Obstructive Pulmonary Disease, stage III or higher
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Colostomy (permanent)
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Cystic fibrosis
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Dementia
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Down syndrome / Trisomy 21
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Duchenne muscular dystrophy (advanced or severe)
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Edwards syndrome / Trisomy 18
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Hemipelvectomy
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Hemophilia A (severe)
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Hip disarticulation
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Huntington disease
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Ileostomy (permanent)
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Intellectual disability (severe, profound or IQ of 70 or below)
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Lower limb amputation (leg or foot)
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Microcephaly
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Paraplegia
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Parkinson's disease (advanced or severe)
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Patau syndrome / Trisomy 13
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Phenylketonuria
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Prader Willi syndrome
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Profound hearing loss in one ear and severe hearing loss in the other ear
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Progeria
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Quadriplegia or tetraplegia
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Relies only on lip-reading and / or use sign language to understand conversations or communicate
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Renal (kidney) failure requiring lifelong hemodialysis or peritoneal dialysis
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Requires lifelong continuous supplemental oxygen (O2)
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Schizophrenia
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Sickle cell disease (severe) requiring transfusions
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Sign language is primary means of communicating due to profound hearing loss or expressive aphasia
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Spinal muscular atrophy, type 1 and 2
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Stroke (severe) no functional recovery
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Tay-Sachs disease (infantile/juvenile)
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Total mutism
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Traumatic brain injury (severe)
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Upper limb amputations (trans carpal or higher)
Medical Practitioners Qualified to Certify Impairments
The Spring Economic Update 2026 also proposes measures regarding certification by qualified medical practitioners for the purposes of the DTC, as follows:
- An occupational therapist would be permitted to certify impairments affecting eliminating (bowel or bladder functions), including under cumulative effects of multiple restrictions.
- A physiotherapist would be permitted to certify impairments affecting feeding or dressing, as well as cumulative effects of multiple restrictions pertaining to walking, feeding and/or dressing.
- A speech-language pathologist would be permitted to certify impairments affecting feeding or hearing, as well as cumulative effects of multiple restrictions pertaining to speaking, feeding and/or hearing.
The Spring Economic Update 2026 also proposes to add podiatrists to the list of medical practitioners who may certify impairments for the DTC. An individual who holds a license to practice as a podiatrist in a province (or under the laws of a jurisdiction in which an individual resides) would be permitted to certify impairments affecting walking that are within their scope of practice to assess.
These measures would apply to DTC certifications issued after 2026 for the 2027 and subsequent taxation years.
Employee Ownership Trust Tax Exemption
The Spring Economic Update 2026 proposes to make the Employee Ownership Trust (EOT) capital gains exemption permanent.
Under the existing rules, individuals (other than trusts) may be eligible for an exemption on up to $10 million in capital gains realized on the sale of a business to an EOT or worker cooperative corporation, subject to conditions. This measure was previously introduced on a temporary basis and applied to qualifying dispositions occurring after 2023 and before the end of 2026.
Home Buyers’ Plan (HBP)
The Home Buyers’ Plan (HBP) allows eligible individuals to withdraw up to $60,000 from their Registered Retirement Savings Plan (RRSP) to purchase or build a first home, or a home for a specified disabled person, without immediate tax consequences. Individuals buying a qualifying home jointly may each withdraw up to $60,000 from their own RRSPs.
Amounts withdrawn under the HBP must generally be repaid over a period of up to 15 years. Budget 2024 temporarily extended the grace period before repayments begin from two years to five years for first‑time withdrawals made between January 1, 2022 and December 31, 2025.
The Spring Economic Update 2026 proposes to extend this five‑year grace period to apply to first withdrawals made up to the end of 2028. Where this applies, the 15‑year repayment period would begin in the fifth year following the year of the first withdrawal.
Labour Mobility Deduction for Tradespeople
The Labour Mobility Deduction for Tradespeople currently allows eligible tradespeople and apprentices in the construction industry to deduct up to $4,000 per year for eligible temporary relocation expenses.
The Spring Economic Update 2026 proposes to:
- Increase the annual deduction limit from $4,000 to $10,000 in 2026, with annual indexation thereafter; and
- Reduce the minimum distance requirement so that temporary lodging must be at least 120 kilometres closer to the temporary work location than the individual’s ordinary residence (down from the current requirement of 150 kilometres).
These changes are proposed to apply for the 2026 and subsequent taxation years.
CPP Contribution Rate
The Spring Economic Update 2026 proposes that legislative amendments will be introduced where, effective January 1, 2027, the Canada Pension Plan (CPP) contribution rate will be reduced from the current 9.9% to 9.5%.
Business Tax Measures
The Spring Economic Update 2026 sets out implementation details for the proposed accelerated capital cost allowance (CCA) for eligible equipment and buildings used in low‑carbon liquefied natural gas (LNG) facilities.
To qualify, the LNG facility’s on‑site liquefaction activities must meet a prescribed emissions‑intensity threshold. Owners of eligible assets would benefit from:
- A 50% CCA rate for qualifying LNG liquefaction equipment (Class 47); and
- A 10% CCA rate for non‑residential buildings used as part of an LNG facility (Class 1).
Facilities would be required to obtain certification from the Minister of Energy and Natural Resources, supported by a third‑party engineering report. For certified facilities, the accelerated CCA would apply to eligible assets acquired on or after November 4, 2025 and before the end of 2034.
LNG facilities would also be eligible for the enhanced accelerated investment incentive deduction on certain properties.
Investment Tax Credit for Carbon Capture, Utilization and Storage
The Carbon Capture, Utilization and Storage (CCUS) investment tax credit is a refundable credit supporting eligible CCUS expenditures. Credit rates vary depending on the type of equipment and the timing of expenditures.
The Spring Economic Update 2026 proposes to expand eligible uses of captured carbon dioxide to include enhanced oil recovery (EOR), subject to specific conditions. Where CO₂ is stored through EOR, credit rates would generally be one‑half of the rates available for dedicated geological storage or storage in concrete. Additional requirements would apply to ensure permanent storage and regulatory oversight.
This expansion is proposed to apply as of April 28, 2026, subject to jurisdictional designation.
Previously Announced Measures
- Legislative and regulatory proposals released on January 29, 2026, including with respect to the following measures:
- Reporting by Non-profit Organizations;
- Qualified Investments for Registered Plans;
- 21-Year Rule;
- Immediate Expensing for Manufacturing and Processing Buildings;
- Tax Deferral Through Tiered Corporate Structures;
- Eligible activities under the Canadian Exploration Expense;
- Hybrid Mismatch Arrangements;
- Investment Income Derived from Assets Supporting Canadian Insurance Risk;
- Technical amendments to the Income Tax Act and the Income Tax Regulations; and
- Technical amendments to the Global Minimum Tax Act.
- Immediate expensing for greenhouse buildings announced on January 26, 2026.
- New Goods and Services Tax/Harmonized Sales Tax (GST/HST) rules announced in Budget 2025 to introduce a reverse charge mechanism beginning with certain supplies in the telecommunications sector, and for which legislative proposals have not yet been released.
- Legislative and regulatory proposals released on August 15, 2025, including with respect to the following measures:
- Crypto-Asset Reporting Framework and the Common Reporting Standard (subject to a deferred application date of Jan 1,2027);
- Non-Compliance with Information Requests;
- Excessive Interest and Financing Expenses Limitation Rules;
- Technical tax amendments to the Income Tax Act and the Income Tax Regulations;
- Technical amendments to the Global Minimum Tax Act; and
- Technical amendments relating to the GST/HST and excise levies.
- Legislative and regulatory proposals released on August 12, 2024, including with respect to the following measures:
- Charities and Qualified Donees;
- Registered Education Savings Plans;
- Avoidance of Tax Debts;
- Manipulation of Bankrupt Status;
- Amendments to the Global Minimum Tax Act and the Income Tax Conventions Interpretation Act;
- Technical tax amendments to the Income Tax Act and the Income Tax Regulations; and
- Technical amendments relating to the GST/HST, excise levies and other taxes and charges.
The Department of Finance confirmed a general commitment to move forward with several other technical amendments. A complete list of the previously announced measures can be found on the Spring Economic Update 2026 Website.
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