Highlights from the Federal Government’s 2026 Spring Economic Update

On April 28, 2026, the federal government published the Canada Strong For All – Spring Economic Update 2026 (Update). On April 30, 2026, the government tabled corresponding enabling legislation, Bill C-30 – An Act to implement certain provisions of the spring economic update, for First Reading.

In this FTR Now, we highlight proposals contained in the Update that will be of interest to employers, human resource professionals and pension plan administrators.

Reduction in Base Canada Pension Plan Contribution Rate

The government has announced its intention to amend the Canada Pension Plan(CPP) by reducing the contribution rate on the base portion of CPP from 9.9% to 9.5%. For an employee earning $70,000 annually, the Update notes that resulting savings will be approximately $133 for both employees and employers. The Update also notes that total CPP contributions across Canada will be reduced by $3 billion per year due to this reduction, which will take effect on January 1, 2027.

Employee Ownership Trusts

The Update proposes to make the $10 million capital gains tax exemption for the sale of businesses to employee ownership trusts or worker co-operatives permanently available. Currently, this tax incentive is effective for the 2024, 2025 and 2026 tax years.

For more detail regarding the employee ownership trust tax incentive, and eligibility criteria, please see our articles for the 2023 Fall Economic Statement and the 2024 Federal Budget.

Whole-of-Government Competition Plan

The Update includes the announcement of the federal government’s “Whole-of-Government Competition Plan,” a new initiative aimed at removing federal government policies that “impede competition arising from regulation, procurement and industrial support.” The Update provides little detail on what policies will be removed, and indicates that the Minister of Finance and National Revenue will provide further information in the coming months. We will monitor any announcements regarding the “Whole-of-Government Competition Plan” for any implications that have direct relevance to employers.

Skilled Trades Training and Apprenticeships

The Update announces the creation of “Team Canada Strong,” a suite of federal measures intended to promote the recruitment, training and hiring of 80,000 to 100,000 Red Seal trades workers.

At the recruitment stage, $2 billion in initial funding will be provided over 5 years, starting in 2026-27, following which $262 million in on-going funding will support the recruitment aspects of the program. The funding is aimed to provide young people, aged 15 – 30, with paid entry-level trades-related work experience that leads to apprenticeship. Funding will also be provided to small- and medium-sized businesses that hire new apprentices, in the form of up to $10,000 of wage subsidies for the first-year salaries of apprentices hired through the “Build Canada Apprenticeship Service.”

With respect to training, $331 million will be provided over five years, followed by $18 million in on-going funding. This funding is aimed at modernising the Red Seal Program by reducing certification delays and improving cross-Canada consistency, including by introducing online exams, digital logbooks and a single national registered apprenticeship number. Union-run training centres will also receive direct funding to expand their capacity and allow for investment in modern equipment, through an expansion of the “Union Training and Innovation Program”.

For hiring, $3.4 billion will be provided over five years, with $464 million in on-going funding. This aspect of the program focuses on removing barriers that impede apprentices from completing training and moving into permanent employment. To that end, the Update proposes to provide a weekly Employment Insurance top-up of $400 per week while an apprentice is attending mandatory in-class technical training, to a maximum of $16,000. The Update also proposes to provide one-time $5,000 bonuses to apprentices upon completion of their Red Seal certification.

Finally, the federal government is signalling its intention to “call on employers (particularly those who get major federal investments) to do their part in recruiting and retaining trade workers.” The Update does not provide any details on how such employers will be called on. We will monitor developments and provide updates when further information is available.

Extension of Employment Insurance Seasonal Worker Supports

Certain seasonal workers in 13 economic regions are eligible for up to five weeks of additional Employment Insurance regular benefits, as part of a temporary support measure introduced in 2018. The Update announces the federal government’s intention to extend this special support measure to October 2028, as it is currently set to expire in October 2026.

If you have any questions in connection with the 2026 spring economic update, please feel free to contact your Hicks Morley lawyer.

The article in this client update provides general information and should not be relied on as legal advice or opinion. This publication is copyrighted by Hicks Morley Hamilton Stewart Storie LLP and may not be photocopied or reproduced in any form, in whole or in part, without the express permission of Hicks Morley Hamilton Stewart Storie LLP. ©