Disability Tax Credit Overhaul
A streamlined application process for individuals with certain long-lasting medical conditions - based on conditions the CRA has identified through years of processing applications as clearly meeting the DTC's impact criteria. An expanded list of medical practitioners authorized to certify DTC eligibility. And, notably, provincial or territorial public guardians, trustees, and curators will be permitted to certify the DTC application form for adults in their care who already hold a valid certificate of incapacity, removing the need for a separate medical certification in those cases.

Labour Mobility Deduction for Tradespeople
Effective for 2026 and subsequent taxation years, the annual deduction limit for eligible temporary relocation expenses rises from $4,000 to $10,000 - and will be indexed to inflation going forward. The minimum distance rule is also relaxed: temporary lodging must now be at least 120 kilometres closer to the temporary work location than the worker's ordinary residence, down from 150 kilometres.

Home Buyers’ Plan Grace Period Extended
The 2026 update proposes extending the temporary five-year repayment grace period under the Home Buyers’ Plan for withdrawals made between January 1, 2026, and December 31, 2028. This means eligible participants can defer the start of required repayments for longer than under the standard rules.

CPP Base Contribution Rate Cut
The base CPP contribution rate will drop from 9.9% to 9.5%, effective January 1, 2027. That's a 40-basis-point reduction split between employer and employee, worth roughly $133 a year each on a $70,000 salary.

Employee Ownership Trust Tax Exemption Made Permanent
The update proposes to make permanent the exemption from tax on up to $10M of capital gains realized by Employee Ownership Trust or worker co-operative corporation. The exemption had been temporary and was scheduled to apply only to qualifying dispositions after 2023 and before the end of 2026.

Advance Tax Rulings Priority for Nation-Building Projects
The Canada Revenue Agency announced that it will prioritize advance income tax ruling requests tied to projects of national importance or those that enhance productivity and strengthen critical sectors of Canada's economy. 

What the Update Confirms 
A significant portion of the document is dedicated to confirming the government's intent to proceed with previously announced measures, including:

• Immediate expensing for manufacturing and processing buildings (from Budget 2025)
• The second package of hybrid mismatch rules
• Anti-deferral rules for Part IV tax through tiered corporate structures
• Refinements to the Global Minimum Tax Act (Pillar Two)
• The 21-year deemed disposition anti-avoidance rule for personal trusts
• Modernized Canadian transfer pricing rules
• Reporting requirements for non-profit organizations under paragraph 149(1)(l) of the Income Tax Act
• Various technical amendments to the Income Tax Act, Income Tax Regulations, and the Excise Tax Act
  
  Overall, the Spring Economic Update 2026 keeps tax rates stable while fine-tuning a series of targeted measures. The most significant items include making the employee ownership trust exemption permanent, advancing clean economy and LNG incentives, streamlining the Disability Tax Credit process, extending Home Buyers’ Plan relief, and enhancing deductions for tradespeople.