2026 Federal Spring Economic Update Summary

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The Spring Economic Update on April 28, 2026, introduces targeted measures for individuals and small businesses, without changing personal or corporate income tax rates.

1. Disability Tax Credit (DTC)

• From 2026: Simplifies the application process for certain long-term medical conditions. Under this proposal, for individuals who have at least one of the listed medical conditions, a qualified medical practitioner would need to certify that the individual has the medical condition. The practitioner would no longer be required to certify that the individual's impairment is severe and prolonged and that its effects meet the legislated thresholds regarding daily living impacts.

• Public guardians/trustees may certify that an adult under their care has a valid incapacity certificate.

• From 2027: Expands eligibility by allowing podiatrists to certify DTC claims and broadens the range of impairments recognized by certain medical professionals (see below table).

Medical Practitioners Qualified to Certify Impairments for the DTC

A valid DTC certificate is a requirement for accessing other federal measures, including the Canada Disability Benefit, Registered Disability Savings Plan (including the Canada Disability Savings Grants and Bonds), the Child Disability Benefit and the disability supplement to the Canada Workers Benefit.

2. 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 an RRSP to purchase their first home, without having to pay tax on the withdrawal. Amounts withdrawn under the HBP must be repaid to an RRSP over a period not exceeding 15 years, starting the second year following the year in which a first withdrawal was made. Otherwise, amounts due for repayment within a specific year are taxable as income for that year.

Budget 2024 temporarily increased the grace period during which homeowners are not required to start repaying their HBP withdrawals from two years to five years for participants making a first withdrawal between January 1, 2022 and December 31, 2025.

• The Spring Economic Update extends the 5-year repayment grace period (previously temporary to December 31, 2025) to include withdrawals made up to December 31, 2028.

3. Labour Mobility Deduction (Tradespeople)

• From 2026, Increases the deductible limit for relocation expenses from $4,000 to $10,000 (indexed going forward).

• Eases the distance requirement: temporary lodging must now be at least 120 km closer to the work site (previously 150 km).

4. Canada Pension Plan (CPP) Contributions

• From January 1, 2027, Employer/employee’s contribution rate reduced from 4.95% to 4.75%.

• Self-employed rate reduced from 9.9% to 9.5%.

Overall: The update focuses on improving accessibility (DTC), housing flexibility (HBP), workforce mobility (trades deduction), and modest payroll cost relief (CPP), rather than broad tax changes.

If you need further understanding on how the budget changes might affect you, please contact us.

 ©2026 IMPACT CPA LLP, an Ontario limited liability partnership. All rights reserved.

The content of this pamphlet is prepared by IMPACT CPA LLP for information only and are not intended to provide professional advice as individual situations will differ. We would be please to discuss your specific situation and tailor a tax plan to meet your requirements