Tax measures: 
Supplementary information

Overview

This annex provides detailed information on tax measures proposed in the Spring Economic Update 2026.

Table 1 lists these measures and provides estimates of their fiscal impact.

The annex also provides legislative proposals to amend the Excise Tax Act, the Excise Act and the Excise Act, 2001.

Personal Income Tax Measures 

Disability Tax Credit

The Disability Tax Credit (DTC) is a non-refundable tax credit intended to recognise the impact of non-itemizable disability-related costs on the ability to pay tax. For 2026, the amount of the credit is $10,341, which provides a federal tax reduction of up to $1,448.

To be eligible for the DTC, an individual must have a severe and prolonged impairment in physical or mental functions. The effects of the impairment must be such that, even with appropriate devices, medication and therapy, the individual is:

• blind, diagnosed with type 1 diabetes mellitus or markedly restricted in their ability to perform a basic activity of daily living, or would be so restricted were it not for extensive therapy to sustain a vital function; or
• significantly restricted in their ability to perform more than one basic activity of daily living where the cumulative effect of those restrictions is comparable to being markedly restricted in a basic activity of daily living.

For these purposes, the Income Tax Act recognises the following basic activities of daily living: walking; feeding or dressing oneself; mental functions necessary for everyday life; speaking; hearing; eliminating bodily waste; and, for the purposes of the "significantly restricted" test noted above, seeing.

A qualified medical practitioner must certify, on the DTC application form, that the impairment is severe and prolonged and that its effects meet at least one of the impact criteria listed above. Medical practitioners recognised as qualified to certify impairments for the DTC are specified in the Income Tax Act, as summarised in Table 2.

The Canada Revenue Agency (CRA) reviews the information provided on a DTC application form, including by the qualified medical practitioner, and approves the DTC certificate where the individual meets all legislative requirements to be approved for the DTC.

A valid DTC certificate is a requirement for accessing other federal measures, including the Canada Disability Benefit, Registered Disability Savings Plan (including the Canada Disability Savings Grants and Bonds), the Child Disability Benefit and the disability supplement to the Canada Workers Benefit.

Certain Long-lasting Medical Conditions

The CRA's experience in processing DTC applications has allowed for the identification of several long-lasting medical conditions that satisfy the disability impact criteria of the DTC. These medical conditions are laid out in Table 3.

The Spring Economic Update 2026 proposes to streamline the DTC certification requirements related to these long-lasting medical conditions.

Under this proposal, for individuals who have at least one of the listed medical conditions, a qualified medical practitioner would need to certify that the individual has the medical condition. The practitioner would no longer be required to certify that the individual's impairment is severe and prolonged and that its effects meet the legislated thresholds regarding daily living impacts.

• For example, if a medical practitioner certifies on the DTC application form that their patient has Alzheimer's disease, they would no longer need to complete the part of the DTC form that asks for detailed information on the impacts of this medical condition for that patient (i.e., on their ability to perform mental functions necessary for everyday life).

The proposal would not change the disability criteria to qualify for the DTC and the CRA would continue to have authority to ask for additional information to verify that these criteria are met. This would include the requirement for the individual to have a severe and prolonged impairment in physical or mental functions and for the impacts of the impairment to meet at least one of the applicable legislated thresholds regarding daily living impacts. As is the case for all individuals granted a DTC certificate, individuals with a long-lasting medical condition would need to inform the CRA in writing if there is an improvement in their medical condition that could impact their eligibility for the credit.

For any medical conditions not mentioned in the list but that meet the legislated requirements to qualify for the DTC, a medical practitioner would continue to be able to certify DTC eligibility as before.

This measure would apply to DTC certifications issued for the 2026 and subsequent taxation years.

Table 3
Long-lasting medical conditions eligible for streamlined application, as proposed

Medical Practitioners Qualified to Certify Impairments

The Spring Economic Update 2026 proposes to expand the types of impairments that may be certified by certain qualified medical practitioners, for the purposes of the DTC, as follows:

• An occupational therapist would be permitted to certify impairments affecting eliminating (bowel or bladder functions), including under cumulative effects of multiple restrictions.
• A physiotherapist would be permitted to certify impairments affecting feeding or dressing, as well as cumulative effects of multiple restrictions pertaining to walking, feeding and/or dressing.
• A speech-language pathologist would be permitted to certify impairments affecting feeding or hearing, as well as cumulative effects of multiple restrictions pertaining to speaking, feeding and/or hearing.

The Spring Economic Update 2026 also proposes to add podiatrists to the list of medical practitioners who may certify impairments for the DTC. An individual who holds a license to practice as a podiatrist in a province (or under the laws of a jurisdiction in which an individual resides) would be permitted to certify impairments affecting walking that are within their scope of practice to assess.

These measures would apply to DTC certifications issued after 2026 for the 2027 and subsequent taxation years.

Public Guardians and Trustees

Public guardians and trustees (or public curators, in the case of Quebec) can be authorised to act as substitute decision-makers of last resort with respect to property matters (including filing income tax returns) for individuals who lack the mental capacity to make certain decisions, where no suitable family member or private guardian is available.

The Spring Economic Update 2026 proposes to allow provincial or territorial public guardians, trustees, and curators to certify, on the DTC application form, for an adult under their care for property matters, that the individual has a valid certificate of incapacity (or equivalent document) issued by a healthcare professional in accordance with applicable provincial or territorial laws for determining decision-making capacity. Where such a certification is provided, a qualified medical practitioner would no longer be required to certify the individual's impairment for their DTC application. The CRA would continue to have authority to require additional information to verify that all other eligibility requirements are met (e.g., the individual has a severe and prolonged impairment in physical or mental functions that meets applicable legislated thresholds regarding daily living impacts).

The Spring Economic Update 2026 also proposes to allow Indigenous Services Canada and Crown-Indigenous Relations and Northern Affairs Canada to provide similar certification for adult dependants in their care for property matters under the Indian Act.

This measure would apply to DTC certifications issued for the 2026 and subsequent taxation years.

Employee Ownership Trust Tax Exemption

Individuals (other than trusts) are provided an exemption from taxation on up to $10 million in capital gains realised on the sale of a business to an employee ownership trust or worker cooperative corporation, subject to certain conditions.

The exemption was introduced as a temporary measure. It currently applies to qualifying dispositions of shares that occur after 2023 and up to the end of 2026.

The Spring Economic Update 2026 proposes to make this exemption permanent.

Home Buyers' Plan

The home buyers' plan (HBP) helps eligible home buyers save for a down payment by allowing them to withdraw up to $60,000 from a registered retirement savings plan (RRSP) to purchase or build their first home, or a home for a specified disabled person, without having to pay tax on the withdrawal. Eligible home buyers purchasing a home jointly may each withdraw up to $60,000 from their own RRSP under the HBP.

Amounts withdrawn under the HBP must be repaid to an RRSP over a period not exceeding 15 years, starting the second year following the year in which a first withdrawal was made. Otherwise, amounts due for repayment within a specific year are taxable as income for that year.

Budget 2024 temporarily increased the grace period during which homeowners are not required to start repaying their HBP withdrawals from two years to five years for participants making a first withdrawal between January 1, 2022 and December 31, 2025.

The Spring Economic Update 2026 proposes to extend that five-year grace period to be available for participants making a first withdrawal up to the end of 2028. In such a case, the 15-year repayment period would start the fifth year following the year in which a first withdrawal was made. 

Labour Mobility Deduction for Tradespeople

The Labour Mobility Deduction for Tradespeople allows eligible tradespeople and apprentices working in the construction industry who undertake an eligible temporary relocation to deduct up to $4,000 in eligible temporary relocation expenses per year. The maximum amount of eligible expenses that can be claimed for a particular eligible temporary relocation is limited to 50% of the individual's employment income in respect of the relocation.

To qualify, the relocation must be temporary in nature and undertaken by the eligible tradesperson to enable them to perform their duties of employment as an eligible tradesperson at one or more temporary work locations. The eligible tradesperson must also take up temporary lodging in Canada that is at least 150 kilometres closer to each temporary work location than the taxpayer's ordinary residence.

The Spring Economic Update 2026 proposes to increase the limit on eligible temporary relocation expenses that can be deducted in a year from $4,000 to $10,000 in 2026, with annual indexation thereafter, and to modify the distance rule such that the temporary lodging must be at least 120 kilometres closer to each temporary work location than the taxpayer's ordinary residence.

This measure would apply to the 2026 and subsequent taxation years.

Business Income Tax Measures

Accelerated Capital Cost Allowance Rates for Low-Carbon Liquefied Natural Gas Facilities

Budget 2025 proposed to reinstate accelerated capital cost allowances (CCAs) for eligible liquefied natural gas (LNG) equipment and related buildings for low-carbon LNG facilities. The Spring Economic Update 2026 proposes the implementation details for this measure.

To be eligible for an accelerated CCA, the expected emissions intensity of an LNG facility's on-site liquefaction activities, measured in tonnes of carbon dioxide equivalent per tonne of LNG produced annually (tCO₂e/tLNG), would have to be less than or equal to 0.20 tCO₂e/tLNG. The accelerated CCA rate would be 50 per cent for Class 47 liquefaction equipment and 10 per cent for Class 1 non-residential buildings used in LNG facilities.

In addition, LNG facilities would be able to take advantage of the enhanced first-year Accelerated Investment Incentive deduction for certain capital property.

Certification of Eligible LNG Facilities

In order to claim the accelerated CCA rates under the measure for eligible assets for a particular LNG facility, that facility would first need to be certified by the Minister of Energy and Natural Resources.

LNG facility owners would be required to submit to the Minister of Energy and Natural Resources a one-time report prepared by a qualified third-party Canadian engineering firm. The report would be required to include a front-end engineering design study and set out the expected emissions intensity of the LNG facility, as well as any other information required by the Minister of Energy and Natural Resources.

• Expected emissions intensity would apply to the LNG facility's on-site liquefaction activities and would be based on the facility's initial operating configuration for commercial production.
• For projects that are pre-construction or under construction, the expected emissions intensity would be determined from the facility's proposed design.
• For operating LNG facilities acquiring new eligible assets, the expected emissions intensity would be determined from the facility's as-operated design, taking into consideration any impacts of the new assets to be acquired.

Based on the expected emissions intensity of an LNG facility, as determined from the report, the Minister of Energy and Natural Resources would certify whether the LNG facility qualifies for the measure. This information would then be communicated to the facility owner and to the Canada Revenue Agency.

Eligible Property and Other Applicable Rules

For a certified LNG facility, the measure would have the same eligible property and other applicable rules as the previous accelerated CCAs for LNG equipment and related buildings that were introduced in 2015 and expired at the end of 2024.

• Class 47 property eligible for the additional allowance would comprise equipment that was part of a facility that liquefies natural gas, including controls, cooling equipment, compressors, pumps, storage tanks, and ancillary equipment, pipelines used exclusively to transport liquefied natural gas from the facility, and related structures.
• Class 1 property eligible for the additional allowance would include non-residential buildings that are part of a facility that liquefies natural gas.
• Equipment used exclusively for regasification would not be eligible for the additional allowance. The additional allowance also would not apply to property acquired for the production of oxygen or nitrogen, electrical generating equipment, or property consisting of a breakwater, dock, jetty, wharf or similar structure.
• Property that was previously used, or acquired for use, before it was acquired by the taxpayer will not be eligible for the additional allowances.

These additional allowances could only be claimed against income of the taxpayer that was attributable to the liquefaction of natural gas at that facility. This would include income of a taxpayer from:

• selling natural gas that was liquefied by the taxpayer if the taxpayer owns the natural gas when it entered the facility;
• selling by-products from the liquefaction process; and
• providing liquefaction services in respect of natural gas owned by a third party.

Where a taxpayer is not engaged exclusively in the operation of a liquefaction facility — because, for example, it was engaged in natural gas extraction, transportation or distribution — the taxpayer's income attributable to the liquefaction of natural gas would be determined as though:

• the liquefaction facility were a separate business of the taxpayer; and
• the cost to the taxpayer of natural gas that is owned by the taxpayer before it enters into the facility was equal to its fair market value at that time.

Coming into Force

For certified LNG facilities, the accelerated CCA rates would be available for eligible assets acquired on or after November 4, 2025 and up to the end of 2034.

Investment Tax Credit for Carbon Capture, Utilization, and Storage

The Carbon Capture, Utilization, and Storage (CCUS) investment tax credit is a refundable tax credit that provides support for eligible expenditures relating to CCUS.

The CCUS tax credit provides three different credit rates depending on the purpose of the equipment, with the following credit rates applying to eligible CCUS expenditures incurred from the start of 2022 to the end of 2035:

• 60 per cent for eligible capture equipment used in a direct air capture project;
• 50 per cent for all other eligible capture equipment; and
• 37.5 per cent for eligible transportation, storage and use equipment.

Eligible expenditures that are incurred from the start of 2036 to the end of 2040 are subject to the credit rates set out below:

• 30 per cent for eligible capture equipment used in a direct air capture project;
• 25 per cent for all other eligible capture equipment; and
• 18.75 per cent for eligible transportation, storage and use equipment.

The extent to which the CCUS tax credit is available to an eligible CCUS project and eligible equipment depends on the end use of the carbon dioxide (CO₂) being captured. Eligible uses include dedicated geological storage and storage in concrete, but not enhanced oil recovery (EOR).

Expansion to Enhanced Oil Recovery

The Spring Economic Update 2026 proposes that EOR be made an eligible use for the purposes of the CCUS tax credit. Existing CCUS tax credit design features would apply, along with the following specific design details. 

Credit Rates

The effective credit rates available in respect of eligible expenditures incurred by a taxpayer with a qualified CCUS project that stores CO₂ through EOR would be one half the rates set out above for dedicated geological storage or storage in concrete.

To implement the reduced credit rate for EOR, half of the CO₂ intended for storage through EOR would be considered to be an eligible use in determining the credit amount.

From the date on which this Update is presented to the end of 2035, the effective credit rates would be set at:

• 30 per cent for eligible capture equipment used in a direct air capture project;
• 25 per cent for all other eligible capture equipment; and
• 18.75 per cent for eligible transportation, storage, and use equipment.

From 2036 to the end of 2040, the effective credit rates would be set at:

• 15 per cent for eligible capture equipment used in a direct air capture project;
• 12.5 per cent for all other eligible capture equipment; and
• 9.375 per cent for eligible transportation, storage, and use equipment.

Eligible Equipment

Capture and transportation equipment of a qualified CCUS project that stores CO₂ through EOR would be eligible under the CCUS tax credit.

Equipment required to inject and store CO₂ through EOR would also be eligible, unless all or substantially all of the use of the equipment is to produce oil. Additional details on equipment eligibility will be made available through technical guidance published by Natural Resources Canada.

Mixed-Use Projects

Equipment that is expected to be used to capture or transport CO₂ as part of a qualified project that stores the CO₂ through both EOR and other eligible uses would be eligible for the CCUS tax credit on a weighted-average basis. The quantity of captured carbon that is intended for each eligible use would be based on the project's most recent project plan.

EOR storage equipment would be considered to support EOR as an eligible use and not be subject to any proration.

Storage Requirements

The storage of captured CO₂ through EOR would contribute to a project's eligible use only in jurisdictions where there are sufficient regulations to ensure that the CO₂ is permanently stored.

The designation of EOR-eligible jurisdictions would follow the same process as for dedicated geological storage under the existing CCUS tax credit rules:

• Environment and Climate Change Canada would review the carbon storage regulatory laws pertaining to EOR in the relevant jurisdiction; and
• should the relevant provincial or territorial regulatory regime be determined to be sufficient as they apply to CCUS projects, the jurisdiction may be designated by the Minister of the Environment as eligible for EOR purposes, as of:
  • the date on which this Update is presented, if the regulatory laws are in effect on that day, and
  • the date the regulatory laws come into effect, in any other case.

EOR storage operations would be required to have a process to capture and reinject the CO₂ that is mixed with the oil when EOR is performed. This process would need to be designed to provide for the permanent storage of a minimum of 95 per cent of the CO₂ intended for EOR storage. The projected CO₂ storage rate for CO₂ stored through EOR by a CCUS project would be part of the project plan and subject to evaluation by the Minister of Natural Resources.

Recovery of Tax Credit

Under the current CCUS tax credit rules, projects are assessed over a 20-year period at five-year intervals once they begin to capture CO₂. These assessments determine if a recovery of the CCUS tax credit is warranted.

Amounts of CO₂ from EOR operations that are released into the air in excess of a five-per-cent allowance would be considered an ineligible use.

The recovery mechanism that applies to EOR would be based on the actual amount of CO₂ sent to EOR over each five-year period. A recovery of tax credits on carbon capture and transportation expenditures would apply if the portion (expressed as a percentage) of CO₂ sent to EOR results in a decrease in the project's eligible use percentage that exceeded, by more than five percentage points for that period (determined in combination with changes to other eligible uses), the portion set out in the initial project plan (i.e., the basis on which the tax credit was paid).

Related Adjustments to Other Clean Economy Investment Tax Credits

EOR would be recognised as a form of CO₂ storage under the Clean Hydrogen investment tax credit for the purposes of a project's carbon intensity calculation, in a manner similar to dedicated geological storage.

The storage methods allowable for qualified natural gas energy systems under the Clean Electricity investment tax credit would also be expanded so that CO₂ that has been used for EOR can be categorised as permanently stored underground, provided appropriate safeguards are in place.

Coming into Force

This measure would apply as of the date on which this Update is presented, and would be subject to the designation of the jurisdiction, as described above.

Strategic Environmental and Economic Assessment Statement

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a strategic environmental assessment was conducted for the following measures:

• Accelerated Capital Cost Allowance Rates for Low-Carbon Liquefied Natural Gas Facilities; and
• Investment Tax Credit for Carbon Capture, Utilization, and Storage.

With respect to the Accelerated Capital Cost Allowance Rates for Low-Carbon Liquefied Natural Gas Facilities measure, the assessment concluded that the measure could support incremental investment in LNG facilities in Canada, which could impact the targets and actions of the Federal Sustainable Development Strategy through increased emissions, resource use, and ecosystem impacts. However, the measure would require such facilities to meet a new emissions performance standard. In addition, federal and provincial regulations are designed to mitigate the potential adverse impacts of LNG projects in Canada.

With respect to the Investment Tax Credit for Carbon Capture, Utilization, and Storage measure, the assessment concluded the overall impact of the measure on greenhouse gas emission reduction is subject to a high degree of uncertainty and will depend on a number of factors, including the extent to which the CCUS tax credit expansion to EOR incites incremental CCUS investment, the degree of substitution by CCUS projects between EOR and dedicated geological storage, the extent to which incremental EOR-supported oil production displaces existing supply, and the emission intensity of the EOR-supported oil production.

In accordance with the Cabinet Directive on Strategic Environmental and Economic Assessment, a strategic economic assessment was conducted for the following measures:

• Accelerated Capital Cost Allowance Rates for Low-Carbon Liquefied Natural Gas Facilities; and
• Investment Tax Credit for Carbon Capture, Utilization, and Storage.

With respect to the Accelerated Capital Cost Allowance Rates for Low-Carbon Liquefied Natural Gas Facilities measure, the assessment concluded that the measure could lower LNG project costs. At the margin, this could have an impact on the decision to invest in such projects.

With respect to the Investment Tax Credit for Carbon Capture, Utilization, and Storage measure, the assessment concluded that this measure would have a medium positive economic impact at the national level, partly due to the incremental capital investments supported by the measure.

Previously Announced Measures

The Spring Economic Update 2026 confirms the government's intention to proceed with the following previously announced tax and related measures, as modified to take into account consultations and deliberations since their release.

• Legislative proposals released on April 14, 2026 to temporarily set the excise tax rates on gasoline, unleaded aviation gasoline, diesel fuel and aviation fuel to $0.00 for the period beginning on April 20 and ending on September 7 (inclusive).
• Legislative proposals released on April 1, 2026, to extend by two years the two per cent cap on the inflation adjustment on beer, spirits, and wine excise duties, and to cut by half for an additional two years the excise duty rates on the first 15,000 hectolitres of beer brewed in Canada.
• Legislative and regulatory proposals released on January 29, 2026, including with respect to the following measures:
  • Reporting by Non-profit Organizations;
  • Qualified Investments for Registered Plans;
  • 21-Year Rule;
  • Canada Carbon Rebate;
  • Immediate Expensing for Manufacturing and Processing Buildings;
  • Expanding Eligibility under the Clean Hydrogen Investment Tax Credit to Methane Pyrolysis;
  • Tax Deferral Through Tiered Corporate Structures;
  • Eligible activities under the Canadian Exploration Expense;
  • Hybrid Mismatch Arrangements;
  • Investment Income Derived from Assets Supporting Canadian Insurance Risks;
  • Technical amendments to the Income Tax Act and the Income Tax Regulations; and
  • Technical amendments to the Global Minimum Tax Act.
• Immediate expensing for greenhouse buildings announced on January 26, 2026.
• Automatic Federal Benefits for Lower-Income Individuals announced in Budget 2025.
• New Goods and Services Tax/Harmonized Sales Tax (GST/HST) rules announced in Budget 2025 to introduce a reverse charge mechanism beginning with certain supplies in the telecommunications sector, and for which legislative proposals have not yet been released.
• Legislative and regulatory proposals released on August 15, 2025, including with respect to the following measures:
  • Crypto-Asset Reporting Framework and the Common Reporting Standard (subject to a deferred application date of January 1, 2027);
  • Non-Compliance with Information Requests;
  • Excessive Interest and Financing Expenses Limitation Rules;
  • Technical tax amendments to the Income Tax Act and the Income Tax Regulations;
  • Technical amendments to the Global Minimum Tax Act; and
  • Technical amendments relating to the GST/HST and excise levies.
• Legislative amendments to give effect to the suspension of the Agreement Between the Government of Canada and the Government of the Russian Federation for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and on Capital under domestic law as of November 18, 2024.
• Legislative and regulatory proposals released on August 12, 2024, including with respect to the following measures:
  • Charities and Qualified Donees;
  • Registered Education Savings Plans;
  • Avoidance of Tax Debts;
  • Manipulation of Bankrupt Status;
  • Amendments to the Global Minimum Tax Act and the Income Tax Conventions Interpretation Act;
  • Technical tax amendments to the Income Tax Act and the Income Tax Regulations; and
  • Technical amendments relating to the GST/HST, excise levies and other taxes and charges.
• Legislative and regulatory proposals announced in Budget 2024 with respect to a new importation limit for packaged raw leaf tobacco for personal use.
• Tax measures to amend the Excise Tax Act, the Air Travellers Security Charge Act, the Excise Act, 2001 and the Select Luxury Items Tax Act to give effect to the proposals relating to non-compliance with information requests and to avoidance of tax debts announced in Budget 2024.
• Legislative and regulatory proposals released on August 4, 2023, including with respect to the following measures:
  • Technical amendments to GST/HST rules for financial institutions; and
  • Tax-exempt sales of motive fuels for export.
• Legislative and regulatory proposals released on August 9, 2022, including with respect to the following measures:
  • Technical amendments to the Income Tax Act and Income Tax Regulations; and
  • Remaining legislative and regulatory proposals relating to the GST/HST, excise levies and other taxes and charges.
• Legislative amendments to implement the Hybrid Mismatch Arrangements rules announced in Budget 2021.
• The income tax measure announced on December 20, 2019, to extend the maturation period of amateur athlete trusts maturing in 2019 by one year, from eight years to nine years.

The Spring Economic Update 2026 also reaffirms the government's commitment to move forward as required with other technical amendments to improve the certainty and integrity of the tax system.