The Spring Economic Update

There were very few tax changes in the 2026 Spring Economic Update
A summary of the changes are:

• Reducing the contribution rate of the base Canada Pension Plan from 9.9 per cent to 9.5 per cent, effective January 1, 2027, translating into annual savings of about $133 for an employee earning $70,000 a year, with equivalent savings for their employer.

• The government proposes to 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 tradespeople and apprentices working in the construction industry who undertake an eligible temporary relocation to deduct up to $4,000 in eligible temporary relocation expenses per year. The government proposes to increase the limit on eligible temporary relocation expenses that can be deducted in a year from $4,000 to $10,000 in 2026, with annual indexation thereafter. The distance rule will be modified as well, such that the temporary lodging must be at least 120 km (currently 150 km) closer to each temporary work location than the taxpayer’s ordinary residence. This measure would apply to the 2026 and subsequent taxation years.

• Pausing Fuel Excise Tax: Until Labour Day, saving Canadians up to 10 cents/L on gasoline and 4 cents/L on diesel.

• Capping Non-Sufficient Fund Fees at $10:Helping Canadians pay less in banking fees and strengthening consumer protections.

• Immediate Expensing for Manufacturing and Processing Buildings

• Home buyers’ plan (HBP)   The HBP helps eligible home buyers save for a down payment by allowing them to withdraw up to $60,000 from a registered retirement savings plan (RRSP) to purchase or build their first home, or a home for a specified person with a disability, without having to pay tax on the withdrawal.