Spring Economic Statement: April 28, 2026

April 15, 2026: Ottawa, Ontario - Yesterday, the Honourable François-Philippe Champagne, Minister of Finance and National Revenue, announced that he will table the Spring Economic Update 2026 on Tuesday, April 28, 2026. In the Spring Economic Update 2026, the government will provide an update on its plan to build the strongest economy in the G7, and outline additional actions taken to drive prosperity, play to Canada’s strengths, and support Canadians where and when they need it most.

If you have lent money to ó or borrowed money from ó your spouse you will want to take note of this Jan. 30 deadline. You have less than a week to collect, or pay, the prescribed rate of interest on your loan, if you want to stay in Canada Revenue Agency's good books. Inter-spousal loans allow couples to split capital gains and income earned on "property.î The idea is the higher-income spouse lends money to the lower-income spouse, allowing the latter to purchase either real or financial assets. Then, the money earned on the property and the gains on the property's disposal is taxed in the hands of the lower-income spouse, who presumably has a lower income tax rate. Income splitting is a legitimate strategy and to keep it that way the CRA requires a repayment schedule be put in place at the time of the loan, with an annual interest rate that is no less than the prescribed rate of interest (currently 1%). If the spouse who is doing the borrowing does not stick to the repayment schedule, the CRA does not recognize it as a loan and attributes the earned income back to the lending spouse. So, to be exempt from attribution rules, it is necessary to maintain the structure of the loan. The borrowing spouse, therefore, must pay the lending spouse the prescribed interest within 30 days of the end of each calendar year, that is, no later than Jan. 30. The lending spouse is required to report the interest received on his or her income tax return as income. Assuming the loan was used to purchase income-producing stocks in a non-registered account, the borrowing spouse can deduct the interest paid on his or her tax return.   Suzanne Wray is Business Relations Coordinator at the Knowledge Bureau.   Additional Educational Resources: Essential Tax Facts 2012 and Introduction to Personal Tax Preparation Services.  

Having escaped -40∞-Celsius temperatures in Calgary yesterday on the Knowledge Bureau's nationwide T1 Tax Update Workshop Tour, today's beautiful sunrise over Vancouver reminds me why this lovely province is a retirement haven. Yet, for many, retirement has become more costly and saving for retirement has become more difficult. That makes the pension reforms being introduced in Canada in 2012 doubly significant. In addition to the multitude of changes to the Canada Pension Plan introduced this month (see "Masteryî below), Canadians can look forward to the passage of federal and provincial legislation that will bring life to a new pension savings opportunity ó the Pooled Retirement Pension Plan (PRPP). The PRPP will fill a gap for the self-employed as well as employees whose employers do not provide an employer-sponsored pension. And the latter is a growing number of people. From 1991 to 2007, the proportion of working Canadians who have access to employer-sponsored plans has declined to 34% from 41%, leaving a gap in discretionary retirement savings opportunities for two-thirds of Canadians. The PRPP will help to close that gap. The PRPP also provides an attractive option for small-business owners who found participation in existing Registered Pension Plans ó defined benefit or defined contribution ó too expensive. They and their employees will have access to a large-scale, professionally administrated and lower-cost pension plan, which gives them an opportunity to split retirement income with the spouse sooner than under current RRSP rules. According to background information provided by the federal Department of Finance, Canada's retirement pension system is already a world model recognized by the Organization for Economic Co-operation and Development for its success in reducing poverty and providing high levels of income replacement for retirees. These new pension reforms should help make retirement even better for disciplined savers in the "gapî categories. It's your money, your life. This tax season, be sure to ask your tax and financial advisors about these retirement savings and income-replacement changes and what they mean to you and your family in 2012 and beyond. Evelyn Jacks is President of Knowledge Bureau, which offers a certificate self study course on Tax Efficient Retirement Income Planning. She is also the author of Essential Tax Facts 2012 and co-author of Financial Recovery in a Fragile World.

Surprising no one, the Bank of Canada yesterday kept its benchmark overnight rate at 1%. Citing the sorry state of the global economy ó a deeper and longer recession in Europe than anticipated, a slowing U.S. recovery and decelerating growth in China ó the central bank decided to maintain its target at 1%, where it has been since Fall 2010. "With the target interest rate near historic lows and the financial system functioning well, there is considerable monetary policy stimulus in Canada,î the Bank said in its release. "The Bank will continue to monitor carefully economic and financial developments in the Canadian and global economies, together with the evolution of risks, and set monetary policy consistent with achieving the 2% inflation target over the medium term.î The setting of the overnight rate is closely watched for what it portents about today's release of the Bank's Monetary Policy Report. And many economists took note of the Bank's estimates concerning economic growth ó a better-than-expected 2.4% in 2011 to be followed by 2% in 2012 and 2.8% in 2013. "The economy is only anticipated to return to full capacity by the third quarter of 2013, one quarter earlier than was expected in October,î the Bank says. That seems to relieve some economists. As TD Bank Group economist Leslie Preston says in a report: "Our own outlook for the Canadian economy is somewhat more pessimistic over the next two years, and we view today's announcement as consistent with our call for the Bank of Canada to leave interest rates unchanged until the first quarter of 2013Ö The theme that interest rates will need to remain lower for longer remains intact.î The one worrisome note is that low interests rates will "buttressî consumer spending and housing activity. "Household expenditures are expected to remain high relative to GDP,î the Bank said in its releases, "and the ratio of household debt to income is projected to rise further.î That seems to be a condition that the Bank and economists are willing to accept in the current global economy.

This past week saw three banks ó Bank of Montreal, TD Canada Trust and Royal Bank of Canada ó lower their closed mortgage rates to 2.99%, the lowest level in Canadian history. Generally speaking, these limited-time-only offers were aimed at first-time homebuyers. Yet, given fears of an overheated housing market and warnings about household debt, the move does seem a bit out of step with the times.But is Canada's housing market really overheated? Or is it, as the bank economists have suggested this week, already softening? Certainly, housing prices in Canada have climbed steadily in recent years. One indicator, Statistics Canada's new housing price index, has shown a year-over-year increase of 2.5% in November led by Toronto and Oshawa (treated as one entity by StatsCan) with a 6.2% gain. But Winnipeg, at 5.8%, wasn't far behind, nor was Regina, at 5.3%. Calgary, Vancouver and Victoria were the only cities to see even slight decreases year over year. The Bank of Canada, in its Financial System Review (December 2011), used another indicator: the ratio of house price index to household disposable income. For more than two decades beginning in 1990, the ratio hovered around three. By 2010, the house price index was five times household disposable income, a worrisome jump. The International Monetary Fund, in its November 2011 report on Canada, looked at two other housing price indicators, which it feels are historically high. The price-to-rent and price-to-income ratios are 29% and 20%, respectively, above their averages for the last decade. "Their elevated level and other empirical evidence suggest that house prices may be higher than justified by underlying fundamentals, at least in some provinces,î says the report. "Staff estimates indicate an average price overvaluation of around 10%, with significant regional differences.î But the indicator to which bank economists look is the national residential average price published by the Canadian Real Estate Association. In December, the year-over-year price increase was a mere 0.9%, the slowest pace of growth since October 2010. Sales, too, slowed, up 4.6% from year‐ago levels. "For all of 2011,î points out Doug Porter, BMO's deputy chief economist, "sales rose a mild 2.2%, hardly worthy of the hectolitres of ink spilled over the subject in recent weeks.î The economists expect prices to continue to shrink as 2012 advances. Adds Benjamin Tal in his CIBC report: "It is highly probable that the first quarter of 2012 will see the first year-over-year decline in prices since the recession.î What worries the Bank of Canada and the IMF is not a U.S. style crash but the impact on the recovering economy if housing prices drop 10%-15%. In a "negative feedback loop,î declining house prices would reduce household net worth, causing consumers to check spending further. It would also affect employment in the construction sector which would soon take its toll on employment in other sectors. "An external shock triggering a decline in house prices by 15% accompanied by a severe downturn of construction activity,î says the IMF report, "could result in a GDP decline of some 2.5% over a period of two years relative to the baseline.î Then, there is the question of affordability if interest rates return to historic norms. "Further out,î says Tal, "the most likely scenario is that the eventual increase in interest rates will lead to a decline in prices (probably in the magnitude of 10%-15%).î But overall, bank economists seems to feel the softening house prices are just what is needed to ensure a "soft-landing scenario.î As Porter concludes: "We look for both sales and prices to be roughly flat this year. That could be just what the policy doctor ordered, allowing incomes to catch up to higher prices.î TD Bank Group economist Francis Fong strikes the most cautionary note: "2012 is likely going to be a bumpy rideÖ The first half of this year will likely see housing activity pullback further from its current level alongside both global and domestic economic conditions, while the second half of the year is likely to see some improvement as those same factors improve.î   Additional Educational Resources: Financial Recovery in a Fragile World and Debt and Cash Flow Management    

ï The 15% federal corporate income tax rate kicked in Jan. 1, the final stage of the federal government's tax-reduction plan begun in 2007. ï Also effective Jan. 1, the 15% non-refundable Family Caregiver Tax Credit on an amount of $2,000 will provide tax relief to caregivers of infirm dependent relatives who historically have received little support, including common-law partners and minor children. ï The temporary 50% straight-line accelerated capital cost allowance rate for investments in manufacturing or processing machinery and equipment has been extended in the 2012-2013 fiscal year. ï You now have $5,000 more room in your Tax-Free Savings Account (TFSA). ï This year's deadline for making a contribution to your RRSP is Wednesday, Feb. 29.

Our family had a wonderful Christmas in Asia this year, reuniting with our son who has been working in Cambodia. While we were there, the Cambodia Daily News ran an interesting article written by Al Gore and David Blood entitled "Sustainable Capitalism in a Global Economy.î In it, the authors made the following observations: It's important to abandon short-term economic thinking in favor of "sustainable capitalism,î which maximizes long-term economic value by reforming markets to address real needs while integrating environmental, social and governance metrics in the decision-making process. We are at a rare turning point in history when dangerous challenges and limitless opportunities require clear, long-term thinking to solve disruptive threats such as climate change, water scarcity, poverty, disease, growing income inequality and massive economic volatility, to name a view. Companies and investors will ultimately be the ones to mobilize the capital needed to overcome these challenges. I found this extremely interesting. At the Knowledge Bureau, we have pioneered the development and implementation of a framework for building sustainable family wealth. We call it Real Wealth Managementô and thousands of students from across Canada ó most of them tax and financial advisors ó have taken our certificate programs over the past eight years. Real Wealth Management training facilitates joint decision-making between clients and their advisors following a strategic framework within which families accumulate, grow, preserve and transition wealth with future purchasing power, that is, after taxes, inflation and fees. Authors Gore and Blood argue that integrating sustainability into business practices enhances profitability. It helps companies save money by reducing waste and increasing efficiencies throughout their supply chains, and it improves human relations thereby increasing employee retention and reducing the cost of employee training. Sustainability modeling also helps companies achieve higher compliance standards and manage risk because they have a better and more holistic understanding of the issues that affect their businesses. This is entirely true of the Real Wealth Management framework for building sustainable family wealth. It challenges those who have trouble managing their income and creating capital to understand how they use their money and encourages them to take a future-oriented approach rather than a short-term, reactive response. Building individual and family net worth over the long term involves following Real Wealth Management's consistent strategy and measurable process. Taxation is an important factor in building sustainable family wealth because it can erode both income and capital over time. With tax season upon us, it makes sense to begin now to plan, so you can increase after-tax income for 2012 and accumulate and grow intact capital that will reliably produce income for the future. It's your money, your life. In a volatile economic environment, it makes sense to learn about the Real Wealth Management framework so you can better accumulate, grow, preserve and transition wealth. Given that it's the start of a brand new year, you may find yourself creating new opportunities for a brighter, more secure financial future. Wouldn't it be good to replace financial worries with peace of mind? Happy New Year! Evelyn Jacks is President of Knowledge Bureau, an educational institute that focuses on excellence in financial education. For more information on Real Wealth Management, please see http://www.knowledgebureau.com/. Evelyn is the author of 48 books; her latest is Essential Tax Facts 2012. She is also the co-author of Financial Recovery in a Fragile World with Robert Ironside and Al Emid.