The federal government's first Spring Economic Update was tabled on April 28, 2026. Most of its tax measures became law when Bill C-30, the Spring Economic Update 2026 Implementation Act, received Royal Assent in June 2026. Here's what changed and who it affects.
The short version
- CPP contributions drop in 2027. The base CPP rate falls from 9.9% to 9.5% (employer and employee combined) on January 1, 2027.
- Home Buyers' Plan relief extended. First withdrawals made from 2026 to 2028 get a five-year grace period before repayments start.
- Tradespeople can deduct more. The Labour Mobility Deduction limit rises from $4,000 to $10,000 for 2026, and the distance rule eases from 150 km to 120 km.
- Employee Ownership Trusts: the $10 million capital gains exemption is now permanent.
- Greenhouses now qualify for immediate expensing.
- Gas tax holiday: the federal fuel excise tax was suspended from April 20 to September 7, 2026. That's over now.
1. Lower CPP contributions starting January 1, 2027
The base CPP contribution rate is dropping:
- Employees: from 4.95% to 4.75% on the base portion
- Employers: the same reduction, matching each employee
- Self-employed: from 9.9% to 9.5% on the base portion
The first additional contribution (part of the CPP enhancement) and the second additional contribution (CPP2) aren't changing. So the total employee rate on earnings up to the yearly maximum goes from 5.95% in 2026 to 5.75% in 2027, and from 11.9% to 11.5% for the self-employed.
The government estimates an employee earning $70,000 will save about $133 a year, with matching savings for the employer. The Chief Actuary of Canada reviewed the change and confirmed the base CPP stays financially sustainable at the lower rate. CPP benefits aren't reduced.
For employers: your payroll settings need updating for 2027. The CRA publishes new payroll deduction tables every year, and our payroll service handles changes like this for clients.
2. Home Buyers' Plan: a longer grace period
The Home Buyers' Plan lets eligible buyers withdraw up to $60,000 from their RRSP to buy or build a qualifying home, then repay it over 15 years. Normally, repayments start in the second year after the first withdrawal. Budget 2024 temporarily stretched that grace period to five years for first withdrawals made from 2022 to 2025. Bill C-30 extends the five-year grace period to first withdrawals made up to the end of 2028.
3. Labour Mobility Deduction for tradespeople
Eligible tradespeople and apprentices in the construction industry who temporarily relocate for work can deduct certain travel and temporary lodging costs. For 2026 and later years:
- The annual limit rises from $4,000 to $10,000, with indexation after 2026 (Spring Economic Update tax measures).
- Temporary lodging must be at least 120 km closer to the work location than your ordinary residence (down from 150 km).
- The claim for a particular relocation is still limited to 50% of your employment income from that relocation.
If you work in the trades, see our page for construction and trades.
4. Employee Ownership Trusts made permanent
Individuals who sell a qualifying business to an Employee Ownership Trust, or convert to a worker cooperative, can exempt up to $10 million of capital gains, subject to conditions. The exemption was set to expire after 2026. It's now permanent, which makes employee ownership a more realistic succession option for Ontario business owners.
5. Immediate expensing for greenhouses
Bill C-30 allows immediate expensing for greenhouses, to support domestic food production. Farm businesses planning greenhouse projects should review the timing with their accountant.
Proposed in the update and worth watching: Disability Tax Credit changes
The Spring Economic Update also proposed streamlining Disability Tax Credit (DTC) certification. For people with one of more than 40 listed long-lasting conditions, such as Alzheimer's disease, ALS, Down syndrome, or advanced Parkinson's disease, a medical practitioner would only need to certify the condition instead of completing the full assessment of daily living impacts. It also proposed letting more types of practitioners certify certain impairments, including podiatrists for walking, for certifications issued after 2026. Check the CRA's guidance for the current status before relying on these changes.
For 2026, the DTC amount is $10,341, worth up to $1,448 in federal tax savings, according to the Department of Finance. Our Disability Tax Credit guide explains how to apply.
Sources
- Legislation passes to implement measures from the Spring Economic Update 2026, Department of Finance Canada
- Spring Economic Update 2026: Tax measures, supplementary information, Department of Finance Canada
- 33rd Actuarial Report supplementing the Revised 32nd Actuarial Report on the Canada Pension Plan, Office of the Chief Actuary
- What is the Home Buyers' Plan, Canada Revenue Agency
Questions about how these changes affect your household or business? Book a consultation.