What actually matters to your personal finances in Ottawa’s spring economic update

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Okay, let’s face it. No one tunes into a federal economic update expecting a party. And to be sure, Finance Minister François-Philippe Champagne didn’t throw one on Tuesday. There were no big income tax cuts or surpluses to announce. What we got instead was a handful of targeted measures – mostly modest and unglamorous – and easy to miss amid the headlines about sovereign wealth funds and defence spending. Still, there were some things that could be worth real money to Canadians. So, let’s talk about what actually matters for your personal finances.

First-time homebuyers

It used to be that withdrawing funds from your RRSP under the Home Buyers’ Plan (HBP) required you to start repaying your RRSP two years after making your first withdrawal. That grace period was extended to five years for withdrawals made between 2022 and 2025. The economic update this week extends the five-year grace period for withdrawals made in 2026, 2027 or 2028. This will give you a little more breathing room if you tap into your RRSP to buy a home. You can withdraw up to $60,000 from your RRSP under the HBP. You have to be a first-time home buyer to qualify (which means you – or your spouse – have not owned a home in the year of withdrawal or the preceding four calendar years).

Canada Pension Plan

This measure isn’t life-changing, but it’s something. Starting Jan. 1, 2027, the base CPP contribution rate is set to drop to 9.5 per cent from 9.9 per cent. If you earn around $70,000 annually, that works out to about $133 extra in your pocket each year. Your employer saves the same amount. Think of it as a minor raise. Use this as a reminder that the CPP is there, and can supplement your income in retirement, but won’t fully meet your needs.

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Disability tax credit

This change deserves more attention than it’ll probably get. The Disability Tax Credit is one of the most valuable and most underused tax credits in the country, partly because the application process has historically been a bureaucratic headache. The economic update proposes to streamline the process for people with a formal diagnosis of certain long-lasting conditions, and it expands the list of medical professionals who can certify eligibility to include podiatrists, physiotherapists, speech-language pathologists, and occupational therapists. Why does this matter? Because the DTC is a gateway to other benefits like the Canada Disability Benefit, the Child Disability Benefit, and the Registered Disability Savings Plan, which comes with federal grants and bonds attached. If you have a family member who might qualify and you’ve been putting off the paperwork, now’s the time to revisit it.

Trades and apprentices

If you’re thinking of a skilled trade as a career, there are new apprenticeship grants, including a $400-per-week income top-up during in-class training and a $5,000 bonus for completing a Red Seal certification. The government is clearly trying to make the trades more financially attractive since there’s a shortage of these workers. And if you’re a tradesperson or apprentice who relocates temporarily for construction work, the Labour Mobility Deduction just got an upgrade. The cap on deductible relocation expenses jumps to $10,000 from $4,000 for 2026, with indexation going forward. The qualifying distance threshold also gets relaxed slightly, to 120 kilometres from 150 kilometres.

Life affordability

The old GST Credit has been rebranded as the Canada Groceries and Essentials Benefit, and it’s getting a boost – up 25 per cent for five years starting this July. A family of four could receive up to $1,890 this year, and a single person could see up to $950. This one is largely automatic if you file your taxes, which is exactly the point: if you haven’t filed recently – even if you have little or no income – file anyway. Your tax return triggers the benefit.

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No tax cuts on the horizon

While the government was quick to say that the federal deficit projected in this economic update is $11-billion lower than the figure published in the budget last November, the fact remains that the deficit is still $25-billion higher than last announced by the Trudeau government in 2024. It’s also true that our federal debt amounts to about $1.41-trillion (according to the November budget documents) and the interest alone on the debt is costing Canadians almost $60-billion annually. That’s about $1.1-billion per week – and growing. More than one dollar of every 10 collected in taxes goes to pay interest and is not used for other priorities. The bottom line? Until the gap closes between revenues and government spending, don’t expect meaningful tax relief on the horizon. This means that diligence in doing the little things right to ensure you’re not paying more in taxes than you should is critical.

Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at tim@ourfamilyoffice.ca.