The Government of Canada released the 2026 Spring Economic Update on April 28, 2026, highlighting the government’s operating and capital expenditures in the 2025-26 fiscal year as well as updated fiscal projections until 2030-31.
Canada’s fiscal picture
Due to higher royalties from an increase in commodity prices, the deficit for 2025-26 declined by $11.5 billion, from $78.3 billion to $66.9 billion.
For the 2026-27 fiscal year, the deficit is projected to be $65.3 billion, down just slightly from the $65.4 billion estimated in Budget 2025. The deficit is expected to decline to around $53 billion by 2030-31.
Programs & investments
- Canada Strong Fund: National sovereign wealth fund with an initial endowment of $25 billion to invest in key, strategic Canadian projects. Canadians will be able to invest directly to this fund and receive financial returns.
- Team Canada Strong initiative: $6 billion to recruit, train and hire 80,000 to 100,000 new skilled trade workers by 2030-31, attracting the workers needed to build more homes and major projects at speed and scale.
- Sport: $755 million to support Canadian athletes by bringing more sporting events to Canada, supporting athletes and building new or renovating existing community infrastructure.
- Support for Indigenous Communities: $4.3 billion in funding for essential services, including health benefits and culturally relevant education.
- Housing investments: $7 billion in loans to the Canada Mortgage and Housing Corporation to speed up the construction of up to 16,500 new rental homes.
- Canada’s first Investment Summit: Convening investors, CEOs, entrepreneurs and business leaders in Toronto from September 14 to 15, 2026.
- Sustainable Finance Conference: Bringing together domestic and international stakeholders to promote progress on the Canadian taxonomy and discuss sustainable investment opportunities. The event will take place June 2 to 5, 2026 in Montreal.
- Defence Industrial Strategy: $103.8 million to establish the Defence Investment Agency and increase its authority and budget. Includes granting a new minister enhanced financial and transactional powers over the Agency.
- Supporting innovation in construction: Investing in new building technologies will help reduce costs and speed up construction.
Taxes and benefits
- Lowering the Canada Pension Plan (CPP) rate: 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.
- Canada Groceries and Essentials Benefit: Providing support to over 12 million Canadians to purchase groceries and essentials with a one-time GST/HST credit payment.
- Pausing the Fuel Excise Tax: Saving Canadians up to 10 cents/L on gasoline and 4 cents/L on diesel (paused until Labour Day).
- Streamlining the Disability Tax Credit: Making the application process easier for individuals with certain medical conditions.
- Employee Ownership Trust Tax Exemption: Making the Employee Ownership Trust Tax Exemption permanent.
Policy changes
- Enhanced Oil Recovery (EOR) will be eligible for the purpose of the CCUS ITC at 18.75 per cent.
- Competition: Whole-of-Government Competition Plan to strengthen productivity and affordability by ensuring that competition is prioritized throughout the federal government’s policies.
- Airports: Better position airports to attract private investment and explore the possibility of privatization.
- Capping Non-Sufficient Fund (NSF) Fees at $10: Help Canadians pay less in banking fees and strengthening consumer protections.
- Canada Revenue Agency: Prioritise requests for advance income tax rulings related to large scale, nation building projects – such as housing and infrastructure – as well as projects of national importance.
- Housing: Streamline rules and modernizing building codes to make it easier to construct new homes, including factory built and modular housing.
The bottom line
The Spring Economic Update continues the government’s overall strategy to address affordability challenges and boost economic growth through capital attraction and labour force development. This update provides additional background on how the government plans to attract over $1 trillion in private investment, as well as how it will ensure community infrastructure, housing and nation-building projects can be developed at speed.
We encourage the federal government to increase focus on small-and medium-sized businesses, as well as on reducing regulatory barriers and project approval timelines, which will continue to place a drag on Canada’s growth and productivity. We also look forward to additional details on how the federal government plans to administer the Canada Strong Fund. Lastly, we encourage the federal government to chart a clear back to fiscal balance, ensuring Canada is well-positioned to have a strong fiscal outlook for years to come.
