CMC Analysis of the 2026 Spring Economic Update
On April 28, Finance Minister François-Philippe Champagne delivered the 2026 Spring Economic Statement. The update outlines the government’s focus on reinforcing domestic economic sovereignty and providing long-term fiscal stability through the government’s “Build Canada Strong” agenda.
The Statement is built upon four central policy pillars:
- The Canada Strong Fund: a new Sovereign Wealth Fund designed for strategic domestic investment.
- Supporting Workers and Young People: focused on skills training and generational equity.
- Affordability Measures: targeted relief to address cost-of-living pressures.
- Security and Crime-Related Measures: strengthening financial integrity and community safety.
The government reported fiscal headlines that are stronger than anticipated, largely due to higher revenues from the energy and financial sectors. The 2025-26 deficit is now projected at $66.9 billion—an $11.5 billion improvement over the November 2025 estimates. This fiscal room has allowed the government to transition from temporary relief measures toward permanent structural incentives intended to keep wealth and productivity within Canada’s borders.
For the co-operative movement, the Statement delivers an important win for worker co-operatives: the permanent codification of the $10 million capital gains tax exemption for business conversions to worker co-operatives and Employee Ownership Trusts (EOTs).
Below is a non-exhaustive list of measures of relevance to Co-operatives and Mutuals Canada’s (CMC) members, and the co-operative ecosystem.
Permanent Tax Relief for Co-operative Conversions
The government has officially proposed to make the $10 million capital gains tax exemption for business sales to worker co-operatives and Employee Ownership Trusts (EOTs) permanent. CMC and the Canadian Worker Co-op Federation (CWCF) extended their thanks to Prime Minister Mark Carney and Finance Minister Champagne for this decisive measure, which directly addressed Canada’s looming $2 trillion small business succession crisis. This change provides both regulatory certainty and advances economic sovereignty.
- Regulatory Certainty: Meaningful succession planning requires a long lead time. By making this measure permanent, the government has provided the certainty owners need to choose the co-operative model with confidence.
- Economic Sovereignty: This policy ensures that Canadian businesses remain locally owned, keeping investments and jobs within our borders instead of risking losing them to external acquisition.
While the political commitment is clear and welcomed, our focus on this priority will now shift to technical oversight. CMC and CWCF will work closely with Finance officials to ensure the final legislative drafting in the Income Tax Act remains robust and that “qualifying co-operative conversions” are fully protected.
Other measures that directly and indirectly impact CMC’s members
Agricultural and Rural Co-operatives
- Agri-Tech and Innovation Capital: $7 billion in new investment, made up of $2B from Farm Credit Canada (FCC) and $5B from a private-sector coalition, to be deployed by 2030 for scaling Agri-tech and domestic food security.
- Greenhouse Expensing: confirmation of immediate expensing for greenhouse buildings, a vital tool for co-ops to scale year-round domestic food productions.
- Temporary Fuel Tax Suspensions: A federal fuel excise tax suspension (gasoline, diesel and aviation fuel) is in effect until September 7, 2026. This provides relief for agricultural operations now and during the peak summer season.
Co-operative Housing
While the government’s update focused heavily on the mechanics of building new homes, CMC and the Co-operative Housing Federation of Canada (CHF) continue to push for the operational supports needed to keep them affordable by:
- Renewing Rental Assistance: Urgently renewing programs like the Federal Community Housing Initiative (FCHI) for at least ten years. With these programs set to expire in 2028, a long-term renewal is necessary to prevent a displacement crisis for thousands of low-income households
- Prioritizing Non-Market Housing Supply: Ensuring the Build Canada Homes agency prioritizes c-operative and non-profit housing to deliver shovel-ready projects quickly and at scale.
- Preserving Existing Stock: Recapitalizing programs focused on the repair and renewal of existing co-operative homes to ensure they remain safe and affordable for the next generation.
Credit Unions and Financial Co-operatives
- Real-Time Rail (RTR) 2026: Confirmation of the launch of Canada’s first national real-time payment system, which will serve as a catalyst for competition and productivity.
- Open Banking Momentum: Following the recent passage of the Consumer-Driven Banking Act, the government is prioritizing the implementation of technical standards. This ensures Credit Unions can compete fairly by giving members secure control over their own financial data.
- Anti-Fraud and Financial Crime: The government has committed $352.7 million over five years to establish a new Financial Crimes Agency to lead independent and joint investigations. This complements the National Anti-Fraud Strategy, which is advancing a Multi-Sector Framework across the financial, telecommunications, and digital sectors to strengthen public awareness and bolster law enforcement capabilities.
Workforce and Operational Relief
- Team Canada Strong: A new initiative to train 100,000 new Red Seal apprentices, providing a federally supported talent pipeline for trades-heavy co-ops.
- Canada Pension Plan (CPP) Rate Reduction: Effective January 1, 2027, the CPP rate will be reduced from 9.9% to 9.5%, providing direct payroll relief for both co-op employers and employees.
What’s Next: Advancing our Advocacy
CMC’s advocacy continues to be driven by our 2026 Federal Budget Recommendations. CMC will continue working with the government to make co-operatives easier to finance, easier to procure from and easier to see in data.
With over 14 million Canadians belonging to a co-op, credit union, caisse or mutual, and a strong majority of Canadians (81%) viewing co-operatives as a primary solution to some of Canada’s biggest challenges, including affordability and inequality—co-operatives are uniquely equipped to provide stability, local control, and the fairness Canadians are seeking in this volatile economic moment. As a model built on trust and designed to evolve through uncertainty, we are committed to ensuring that the government’s “Build Canada Strong” agenda is fully realized through the strength and stability of co-operatives.
For more information or if you have any questions, please contact Nancy Wanye, CMC’s Manager, Government Relations at nwanye@CANADA.COOP