The Federal Spring Economic Update was tabled on April 28, 2026. In this article, we focus on personal tax and benefit highlights. We encourage you to explore those topics most relevant to your unique circumstances.

Extending the Home Buyers’ Plan 

The Home Buyers’ Plan (HBP) is a government program that allows qualifying home buyers to borrow up to $60,000 from their Registered Retirement Savings Plan (RRSP) for the purchase of their first home.

Once an individual has made a withdrawal under the HBP, they are generally required to repay the amount over a period not exceeding 15 years (or have it included in their taxable income). The first instalment is generally due 60 days after the end of the calendar year that is two years following the withdrawal. This two-year grace period was previously extended to five years for withdrawals made between Jan. 1, 2022 and Dec. 31, 2025. The Spring Economic Update 2026 proposes to continue this extended five-year grace period for HBP withdrawals made between Jan. 1, 2022 and Dec. 31, 2028. 

Changes to the Disability Tax Credit application process

The Disability Tax Credit (DTC) is a non-refundable tax credit that is available to those with a qualifying disability. Not only does it reduce the tax burden for disabled individuals and supporting family members, it is a prerequisite for opening a Registered Disability Savings Plan (RDSP). 

The Spring Economic Update 2026 proposes to improve the DTC application process, including through: 

• Streamlining the application process for individuals with a formal diagnosis of certain long-lasting medical conditions, as listed in Table 3, Tax measures: Supplementary information, beginning with the 2026 taxation year. 
  
  
• Adding podiatrists to the list of medical practitioners who can certify eligibility for the DTC as well as broadening the types of impairment that can be certified by physiotherapists, speech-language pathologists and occupational therapists, effective for DTC certificates issued after 2026, beginning with the 2027 taxation year.

Reduction to Canada Pension Plan contributions 

The government intends to introduce changes to the Canada Pension Plan (CPP) that would implement a reduction in the contribution rate for the base CPP.

If you are 18 or older and earning more than $3,500 per year, CPP contributions are required by both you and your employer to fund future retirement and other benefits through the CPP program. Contributions are based on a percentage of your income (excluding the first $3,500) up to a certain income level. 

This economic update proposes to reduce the contribution rate in the base CPP by a total of 0.4 per cent (0.2 per cent for each of the employee and employer portions), effective Jan. 1, 2027. For an employee earning $70,000, this would represent savings of $133 annually.

New Apprenticeship Training Grant and Red Seal bonus

The Spring Economic Update 2026 announced new investments to support apprentices in skilled trades and to encourage completion of Red Seal certification, including:

• A weekly income top-up for apprentices who are attending mandatory in-class technical training of up to $400 per week (up to a maximum of $16,000). This amount is received in addition to employment insurance.
  
  
• A one-time bonus of $5,000 for apprentices who obtain certification in a Red Seal trade.

Increased labour mobility deduction for tradespeople

Under current rules, eligible tradespeople and apprentices in the construction industry are able to deduct up to $4,000 from income for certain costs relating to temporary work relocations within Canada, provided that, among other things, the temporary lodging is located at least 150 kilometres closer to the work site than the tradesperson’s current home. 

The Spring Economic Update 2026 proposes to increase this limit to $10,000, effective for the 2026 tax year. Additionally, the qualification criteria is proposed to be relaxed, reducing the distance requirement to 120 kilometres. The maximum deduction amount is proposed to be indexed annually after 2026.

In 2023, Parliament announced the introduction of a $10 million capital gains tax exemption for qualifying sales of a business to an Employee Ownership Trust (EOT) or a wholly owned subsidiary of an EOT. We discussed the EOT announcements in our Budget summary for 2023. This was later expanded to include qualifying sales to a worker cooperative corporation.

This exemption was originally slated to expire at the end of 2026. The Spring Economic Update 2026 announces Parliament’s intention to make this exemption permanent.