Spring Economic Update 2026 Implementation Act (S.C. 2026, c. 22)
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Assented to 2026-06-18
Spring Economic Update 2026 Implementation Act
S.C. 2026, c. 22
Assented to 2026-06-18
An Act to implement certain provisions of the spring economic update tabled in Parliament on April 28, 2026
RECOMMENDATION
Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to implement certain provisions of the spring economic update tabled in Parliament on April 28, 2026”.
SUMMARY
Part 1 implements certain measures in respect of the Income Tax Act and the Income Tax Regulations by
(a) modifying the Labour Mobility Deduction for eligible tradespeople by increasing the annual limit on expenses that can be deducted and by reducing the distance threshold for eligibility;
(b) making permanent the capital gains tax exemption for the sale of a business to an employee ownership trust or a worker co-operative;
(c) extending the repayment grace period under the Home Buyers’ Plan;
(d) providing temporary immediate expensing for eligible greenhouse buildings; and
(e) improving the interaction of the Electric Vehicle Affordability Program with existing tax rules.
Part 2 amends the Excise Tax Act to temporarily set the excise tax rate on gasoline and aviation gasoline to $0.00 and on diesel fuel and aviation fuel to $0.00 for the period beginning on April 20, 2026 and ending on September 7, 2026. It also amends the Excise Act and the Excise Act, 2001 to implement an additional two-year extension of the 2% cap on the annual alcohol excise duty inflation adjustment, and of the 50% reduction on excise duty rates for the first 15,000 hectolitres of beer brewed in Canada, effective April 1, 2026.
Part 3 amends several Acts in order to implement various measures.
Division 1 of Part 3 amends the Bank Act to provide that the Investment Canada Act does not apply in respect of certain transactions made by foreign banks or entities associated with a foreign bank if the transactions are subject to an approval under the Bank Act, the Trust and Loan Companies Act or the Insurance Companies Act.
Division 2 of Part 3 amends the Bank of Canada Act to combine into a single Act the Bank of Canada’s powers, duties and functions related to the recovery of costs incurred by it for or in connection with the administration of certain Acts. It also makes related amendments to other Acts.
Division 3 of Part 3 amends the Canadian Payments Act to provide immunity for the Canadian Payments Association and certain individuals from any civil liability, other than in contract, for anything done or omitted to be done in good faith in the administration or discharge of any powers or duties conferred under that Act.
Division 4 of Part 3 amends the Employment Insurance Act to, among other things,
(a) extend, until October 7, 2028, the duration of the measure that increases the maximum number of weeks for which benefits may be paid in a benefit period to certain seasonal workers;
(b) remove the description of the regions in which the workers must be ordinarily resident to be eligible for the increase;
(c) provide that those regions are established by regulation; and
(d) provide that paragraph 12(2.3)(b) of that Act is repealed on November 7, 2027.
Division 5 of Part 3 amends the Canada Pension Plan to reduce the contribution rate for employees, employers and self-employed persons for the year 2027 and each subsequent year.
Division 6 of Part 3 amends the Canada Transportation Act to require certain individuals and entities to provide the Minister of Transport with information that that Minister considers necessary for the exercise of the powers and the performance of the duties and functions of that Minister or for the development of transportation policies. The Division also amends that Act to specify the individuals and entities to whom such information may be communicated.
Division 7 of Part 3 amends the Canadian Food Inspection Agency Act to clarify the mandate of the Canadian Food Inspection Agency and authorize the Governor in Council to, in certain circumstances, exempt persons, things or activities, or classes of persons, things or activities, from the application of provisions of certain Acts of Parliament, or regulations made under those Acts, that are administered or enforced by the Agency. It also makes a consequential amendment to the Agriculture and Agri-Food Administrative Monetary Penalties Act.
Division 8 of Part 3 amends the Pest Control Products Act to, among other things,
(a) require the Minister of Health to consider, as appropriate, national economic security, regional economic security or national food security, for the purposes of that Act;
(b) authorize the Governor in Council to, by order, after that Minister has decided that they do not consider the environmental risks of a pest control product to be acceptable, register or amend the product’s registration to permit its use in the emergency control of a seriously detrimental infestation, or amend, reinstate, or both reinstate and amend the registration of the product, if the Governor in Council considers it necessary to do so to protect national economic security, regional economic security or national food security; and
(c) provide that the Governor in Council may establish conditions in the order.
His Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows:
Short Title
Marginal note:Short title
1 This Act may be cited as the Spring Economic Update 2026 Implementation Act.
PART 1Amendments to the Income Tax Act and the Income Tax Regulations
R.S., c. 1 (5th Supp.)Income Tax Act
2 (1) Subparagraph 8(1)(t)(i) of the Income Tax Act is replaced by the following:
(i) $10,000, and
(2) Subparagraph 8(14)(c)(v) of the Act is replaced by the following:
(v) the distance between the ordinary residence and each temporary work location of the taxpayer referred to in subparagraph (i) is not less than 120 kilometres greater than the distance between each temporary lodging referred to in subparagraph (iv) and each temporary work location of the taxpayer referred to in subparagraph (i);
(3) Subsections (1) and (2) apply to the 2026 and subsequent taxation years.
3 The portion of subsection 110.61(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Capital gains deduction for qualifying business transfer — conditions
110.61 (1) Subsection (2) applies to an individual (other than a trust) if, at the time of a disposition (referred to in this section as the “disposition time”) of shares of the capital stock (referred to in this section as the “subject shares”) of a corporation (referred to in this section as the “subject corporation”) to a trust (or to a purchaser corporation wholly owned by the trust) that occurred after 2023 under a qualifying business transfer, the following conditions are met:
4 The portion of subsection 110.62(1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Deduction for qualifying cooperative conversion — conditions
110.62 (1) Subsection (2) applies to an individual (other than a trust) if, at the time of a disposition (referred to in this section as the “disposition time”) of shares of the capital stock (referred to in this section as the “subject shares”) of a corporation (referred to in this section as the “subject corporation”) to another corporation (referred to in this section as the “purchaser corporation”) that occurred after 2023 under a qualifying cooperative conversion, the following conditions are met:
5 Subsection 117.1(2) of the Act is amended by adding the following after paragraph (b):
(b.1) the amount of $10,000 referred to in subparagraph 8(1)(t)(i), for a taxation year that begins after 2026;
6 (1) The portion of subsection 146.01(4.1) of the Act before paragraph (a) is replaced by the following:
Marginal note:Temporary repayment relief — application
(4.1) If the completion date in respect of an eligible amount received by an individual is after 2022 and before 2030
(2) Paragraphs 146.01(4.2)(e) and (f) of the Act are replaced by the following:
(e) the year is 2028 and the completion date in respect of the amount was in 2025, 2026 or 2027;
(f) the year is 2029 and the completion date in respect of the amount was in 2026, 2027 or 2028;
(g) the year is 2030 and the completion date in respect of the amount was in 2027, 2028 or 2029;
(h) the year is 2031 and the completion date in respect of the amount was in 2028 or 2029; and
(i) the year is 2032 and the completion date in respect of the amount was in 2029.
C.R.C., c. 945Income Tax Regulations
7 (1) Subsection 1100(1) of the Income Tax Regulations is amended by adding “and” at the end of paragraph (zd) and by replacing the heading before paragraph (ze) and paragraphs (ze) to (zh) with the following:
Special Allowance — Eligible Greenhouses
(ze) such amount as the taxpayer claims in respect of property that is an eligible greenhouse for which a separate class is prescribed by subsection 1101(5w) not exceeding the amount determined by the formula
A × B
where
- A
- is
(i) if the greenhouse becomes available for use in the year, the undepreciated capital cost to the taxpayer of the property of that class as of the end of the year (before making any deduction under this subsection for the year), and
(ii) in any other case, nil, and
- B
- is, if the year ends
(i) before 2030, 100%,
(ii) in 2030 or 2031, 75%,
(iii) in 2032 or 2033, 55%, and
(iv) after 2033, 0%.
(2) Section 1100 of the Regulations is amended by adding the following after subsection (1):
Marginal note:Eligible greenhouses — first-year deductions
(1.02) If a deduction is available in respect of an eligible greenhouse of a taxpayer under paragraph (1)(ze) for a taxation year, then, despite any other provision in this section, the taxpayer may not deduct any other amount permitted under this Part in respect of the greenhouse for the year.
(3) The portion of paragraph (a) of the description of A.1 in subsection 1100(2) of the Regulations before subparagraph (i) is replaced by the following:
(a) if the property is not included in paragraph (1)(v) or (ze) or in any of Classes 12, 13, 14, 15, 43.1, 44, 46, 50, 53, 54, 55, 56 and 59 or in Class 43 in the circumstances described in paragraph (f),
(4) Subsection 1100(3) of the Regulations is replaced by the following:
(3) Where a taxation year is less than 12 months, the amount allowed as a deduction under this section, other than under subsection (0.1) and any of paragraphs (1)(c), (e), (f), (g), (m), (w), (x), (y), (ya) and (ze), shall not exceed that proportion of the maximum amount otherwise allowable that the number of days in the taxation year is of 365.
(5) Subsections (1) to (4) are deemed to have come into force on November 4, 2025.
8 (1) Section 1101 of the Regulations is amended by adding the following after subsection (5v):
Eligible Greenhouses
(5w) For the purposes of this Part, a separate class is prescribed for each eligible greenhouse of a taxpayer in respect of which the taxpayer has elected (in the taxpayer’s return of income under Part I of the Act for the taxation year in which the greenhouse is acquired) that this subsection apply.
(2) Subsection (1) is deemed to have come into force on November 4, 2025.
9 (1) The portion of subsection 1102(20.1) of the Regulations before paragraph (b) is replaced by the following:
(20.1) For the purposes of subsections 1100(0.3), (2.02) and (2.021) and 1104(2), (3.1), (4) and (4.01), a particular person or partnership and another person or partnership shall be considered not to be dealing at arm’s length with each other in respect of the acquisition or ownership of a property if, in the absence of this subsection, they would be considered to be dealing at arm’s length with each other and it may reasonably be considered that the principal purpose of any transaction or event, or a series of transactions or events, is to cause
(a) the property to qualify as accelerated investment incentive property, reaccelerated investment incentive property, immediate expensing property or an eligible greenhouse; or
(2) Paragraph 1102(26)(b) of the Regulations is replaced by the following:
(b) the following are prescribed programs:
(i) the federal purchase incentive announced on March 19, 2019, and
(ii) the Electric Vehicle Affordability Program announced on February 5, 2026.
(3) Section 1102 of the Regulations is amended by adding the following after subsection (26):
Rules for Additions to and Alterations of Certain Greenhouses
(27) For the purposes of applying paragraph 1100(1)(ze) and subsection 1101(5w), the capital cost to a taxpayer of an addition to or an alteration of the taxpayer’s greenhouse is deemed to be the capital cost to the taxpayer of a separate greenhouse.
Acquisition Costs of Eligible Greenhouses
(28) For the purposes of this Part and Schedule II, if a greenhouse of a taxpayer was under construction on November 4, 2025 and the greenhouse would be an eligible greenhouse (as defined in subsection 1104(2) if that definition were read without reference to its paragraph (b)), the portion, if any, of the capital cost of the greenhouse that was incurred by the taxpayer before November 4, 2025 and has not been deducted under paragraph 20(1)(a) of the Act is deemed to have been incurred by the taxpayer on November 4, 2025, unless the taxpayer elects (in the taxpayer’s return of income under Part I of the Act for the taxation year in which the greenhouse was acquired) that this subsection not apply to that cost.
(4) Subsections (1) and (3) are deemed to have come into force on November 4, 2025.
(5) Subsection (2) is deemed to have come into force on February 16, 2026.
10 (1) Subsection 1104(2) of the Regulations is amended by adding the following in alphabetical order:
- eligible greenhouse
eligible greenhouse means a property of a taxpayer that
(a) is located in Canada,
(b) is acquired by the taxpayer after November 3, 2025,
(c) is included in
(i) Class 6 in Schedule II because of paragraph (d) of that Class, or
(ii) Class 8 in Schedule II because of paragraph (m) of that Class, and
(d) meets either of the following conditions:
(i) the property is not a property in respect of which an amount has been deducted under paragraph 20(1)(a) or subsection 20(16) of the Act by any person or partnership for a taxation year ending before the time the property was acquired by the taxpayer, or
(ii) the property was not
(A) acquired in circumstances where
(I) the taxpayer was deemed to have been allowed or deducted an amount under paragraph 20(1)(a) of the Act in respect of the property in computing income for previous taxation years, or
(II) the undepreciated capital cost of depreciable property of a prescribed class of the taxpayer was reduced by an amount determined by reference to the amount by which the capital cost of the property to the taxpayer exceeds its cost amount, or
(B) previously owned or acquired by the taxpayer or by a person or partnership with which the taxpayer did not deal at arm’s length at any time when the property was owned or acquired by the person or partnership; (serre admissible)
(2) Subsection (1) is deemed to have come into force on November 4, 2025.
PART 2Amendments Relating to the Fuel Excise Tax Relief and the Alcohol Excise Duty Relief
R.S., c. E-15Excise Tax Act
11 (1) Schedule I to the Excise Tax Act is amended by adding the following after section 9.1:
9.2 If excise tax imposed under section 23 of the Act in respect of a quantity of unleaded gasoline, unleaded aviation gasoline, leaded aviation gasoline, diesel fuel or aviation fuel becomes payable at a time that is after April 19, 2026 and before September 8, 2026, the following rules apply in determining the amount of that tax:
(a) the reference to “$0.10” in paragraph 9(a) is to be read as a reference to “$0.00”;
(b) the reference to “$0.11” in paragraph 9(b) is to be read as a reference to “$0.00”; and
(c) the reference to “$0.04” in section 9.1 is to be read as a reference to “$0.00”.
(2) Subsection (1) is deemed to have come into force on April 20, 2026.
R.S., c. E-14Excise Act
12 (1) Section 170.2 of the Excise Act is amended by adding the following after subsection (2.3):
Marginal note:Adjustment — 2026
(2.4) In respect of the inflationary adjusted year that is 2026, the description of B in paragraph (2)(a) is deemed to be equal to 1.02.
Marginal note:Adjustment — 2027
(2.5) In respect of the inflationary adjusted year that is 2027, if the amount determined for B in paragraph (2)(a) without reference to this subsection is greater than 1.02, the description of B in that paragraph is deemed to be equal to 1.02.
(2) Subsection (1) is deemed to have come into force on April 1, 2026.
13 (1) Paragraphs 1(a) to (c) of Part II.1 of the schedule to the Act are amended by replacing “10%” with “5%”.
(2) Paragraphs 1(a) to (c) of Part II.1 of the schedule to the Act, as amended by subsection (1), are amended by replacing “5%” with “10%”.
(3) Subsection (1) is deemed to have come into force on April 1, 2026.
(4) Subsection (2) comes into force on April 1, 2028.
14 (1) Paragraphs 2(a) to (c) of Part II.1 of the schedule to the Act are amended by replacing “20%” with “10%”.
(2) Paragraphs 2(a) to (c) of Part II.1 of the schedule to the Act, as amended by subsection (1), are amended by replacing “10%” with “20%”.
(3) Subsection (1) is deemed to have come into force on April 1, 2026.
(4) Subsection (2) comes into force on April 1, 2028.
15 (1) Paragraphs 3(a) to (c) of Part II.1 of the schedule to the Act are amended by replacing “40%” with “20%”.
(2) Paragraphs 3(a) to (c) of Part II.1 of the schedule to the Act, as amended by subsection (1), are amended by replacing “20%” with “40%”.
(3) Subsection (1) is deemed to have come into force on April 1, 2026.
(4) Subsection (2) comes into force on April 1, 2028.
2002, c. 22Excise Act, 2001
16 (1) Section 123.1 of the Excise Act, 2001 is amended by adding the following after subsection (2.3):
Marginal note:Adjustment — 2026
(2.4) In respect of the inflationary adjusted year that is 2026, the description of B in paragraph (2)(a) is deemed to be equal to 1.02.
Marginal note:Adjustment — 2027
(2.5) In respect of the inflationary adjusted year that is 2027, if the amount determined for B in paragraph (2)(a) without reference to this subsection is greater than 1.02, the description of B in that paragraph is deemed to be equal to 1.02.
(2) Subsection (1) is deemed to have come into force on April 1, 2026.
17 (1) Section 135.1 of the Act is amended by adding the following after subsection (2.3):
Marginal note:Adjustment — 2026
(2.4) In respect of the inflationary adjusted year that is 2026, the description of B in paragraph (2)(a) is deemed to be equal to 1.02.
Marginal note:Adjustment — 2027
(2.5) In respect of the inflationary adjusted year that is 2027, if the amount determined for B in paragraph (2)(a) without reference to this subsection is greater than 1.02, the description of B in that paragraph is deemed to be equal to 1.02.
(2) Subsection (1) is deemed to have come into force on April 1, 2026.
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