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Canada’s economic outlook remains fragile—although conditions are somewhat better than anticipated. The federal spring economic update delivers a clear message: there’s both urgency and opportunity in deploying capital across priority sectors, with near-term upside driven by an increasingly active public-private investment agenda.
The update signals new opportunities for Canadian businesses and a renewed commitment by the federal government to unlock meaningful flows of private capital. The government will use its newfound majority in Parliament to continue its pursuit of structural economic changes while responding to affordability pressures and heightened uncertainty from geopolitics and the approaching Canada-United States-Mexico Agreement (CUSMA) review.
Last fall’s budget set the broader policy direction. This spring update adjusts the pace and aims to help the country respond to ongoing economic shocks. It signals fiscal discipline with a lower-than-expected deficit and strong debt-to-GDP position. But it retains a slight expansionary tilt through targeted stimulus and affordability measures.
Affordability relief can address near-term pressures, but the update ties longer-term affordability to housing supply, productivity, and investment capacity, rather than consumption support. Capital-intensive corporates, institutional investors, and firms in infrastructure, energy, defence, and housing will feel the strongest tailwinds from this update, particularly those in trade-exposed and resource-intensive regions.
The opportunities resulting from federal fiscal policy are expanding, but policy is becoming more selective and execution-focused. Businesses that plan for continued uncertainty and reassess capital, tax, and operating strategies can better position themselves as investment-ready. At the same time, companies that find themselves in the slipstream of government priorities will be better positioned to access upcoming capital and procurement opportunities.
What are the highlights of Canada’s spring economic update for businesses?
Measure
Launch of the Canada Strong Fund—Canada’s first sovereign wealth fund—seeded with $25 billion and mandated to take minority equity stakes in strategic, return‑seeking investments
Business impact
- Expands access to large-scale government‑backed capital
- Raises expectations around bankability, governance, and measurable returns
- Shifts public–private interaction from grants toward co‑investment
Timing
Medium- to long-term
Measure
Activation of a coordinated major projects delivery framework that combines the launch of the Canada Strong Fund, scaling of the Major Projects Office pipeline (21 priority projects), and measures to accelerate approvals, including fast-tracked tax rulings and centralized coordination
Business impact
- Shows continued, albeit marginal, progress in the push to unlock near-term development
- If effective, improves speed-to-build and regulatory certainty
- Favours firms with scale, partnership capability, and strong delivery track records
- Increases importance of procurement readiness
Timing
Near- to medium-term
Measure
$6 billion to boost skilled trades in the construction, housing, infrastructure, energy, and industrial sectors, targeting 80,000–100,000 skilled tradespeople by 2030
Business impact
- Addresses labour constraints that will limit housing and infrastructure delivery
- Supports faster project execution over time
- Benefits sectors dependent on construction and skilled trades capacity
Timing
Medium-term
Measure
Activation and acceleration of Canada’s Defence Industrial Strategy, including resourcing the new Defence Investment Agency, streamlining procurement, and implementing a stronger “buy Canadian” approach to defence sourcing
Business impact
- The first real go-to-market moment for Canada’s defence strategy
- Translates defence policy into a live procurement pipeline
Timing
Near-term
Measure
$41.9 million over five years to modernize and streamline regulations and jumpstart sector innovation. Amended mortgage insurance rules and accelerated low-cost loans for new rental homes
Business impact
- Improves near-term housing demand and buyer liquidity
- Accelerates investment certainty and timelines for large-scale housing developments
- Execution risk remains tied to labour and regulatory processes from other levels of government
Timing
Near-term
Measure
Regulatory and Bank Act changes to expand investment flexibility for federally regulated financial institutions, signals of progress on advancing payments modernization and strengthening financial system integrity
Business impact
- Improves access to capital for financial innovation and emerging business models
- Supports competition and productivity within the financial system
Timing
Near- to medium-term
Measure
Extensions and enhancements to affordability measures, including approximately $12 billion in cumulative GST-linked benefit enhancements and temporary fuel excise tax relief
Business impact
- Supports consumer demand
- May modestly ease wage pressures in consumer‑facing sectors
- Limited impact on structural cost drivers
Timing
Immediate to near-term
Fiscal indicators at a glance
Clearing the path for growth
Trade, geopolitics, and the related economic uncertainty continue to weigh on Canada’s growth trajectory. Against this backdrop, stronger fiscal performance—including an approximately $11.5-billion improvement in the 2025–26 deficit—has created room for selective policy action and a continued push to address systemic barriers to growth.
The newly announced $25-billion Canada Strong Fund—Canada’s first federal sovereign wealth fund—underscores the government’s central and growing role in mobilizing private capital toward large-scale, strategic investments. For capital‑intensive sectors, government is increasingly a long-term investor, offering opportunities for significant derisking of major investments.
The government has paired this expanded capital deployment with measures designed to strengthen execution and institutional capacity. Accelerating major project approvals and boosting the skilled trades reflect a continued focus on delivery, integrity, and system confidence.
Together, these initiatives aim to translate growth and innovation into tangible economic outcomes.
The scale of financial strain among Canadian workers was a focus of the update, underscoring the importance of addressing the country’s affordability challenges. Even before the recent spike in energy prices, PwC’s Global Workforce Hopes and Fears Survey showed that 16% of Canadian workers couldn’t or struggled to pay their bills each month, with a further 42% paying their bills with little or nothing left over for savings.
The economic update addresses affordability through two distinct channels. Near‑term measures include approximately $12 billion in cumulative GST‑linked benefit enhancements, temporary fuel excise tax relief, and a Canada Pension Plan contribution rate reduction. These provide immediate household support. But the attention of policymakers remains on the more structural drivers of affordability, notably housing supply, productivity, and energy and infrastructure investment.
Separately, industrial and defence policies continue to evolve in response to external risks and intensifying global competition for capital. Measures to advance major projects, investments to establish and operate the Defence Investment Agency as a standalone entity and accelerate defence procurement, and short-term multi-channel financing as a form of tariff support reflect a focus on domestic capability, resilience and security, and long‑term competitiveness. Infrastructure investment will be central to this effort. Forthcoming PwC research forecasts Canadian infrastructure spending will rise 45% between now and 2050, totalling $4.7 trillion during that period. For businesses, the implications are clear: opportunity is expanding for those positioned to execute and find advantages amidst the structural shifts underway.
Tax highlights
The spring economic update did not contain new or expansive tax measures, nor did it introduce broad‑based corporate or personal tax rate changes.
Previously announced investment tax credits (ITCs), particularly those supporting clean technology, manufacturing, and strategic sectors, remain in place. The focus is now shifting from new policy design to implementation and uptake. The government has also indicated that they will direct the Canada Revenue Agency to prioritize processes relevant to nation-building projects. No additional funding envelopes or expansions were announced beyond commitments made in last fall’s budget, signaling that businesses should plan around existing incentives rather than expecting further near‑term additions.
Read the tax highlights from the spring economic update
Your next move
In the near term, businesses can build resilience and find quick wins by preparing for continued swings in energy prices, unpredictable tariffs, and supply chain disruptions, while making use of available incentives to help reduce costs.
Over the medium term, opportunities shift to strategic repositioning, including reallocating capital toward government-backed, policy-aligned sectors (such as infrastructure, technology, energy, defence, resources, and domestic manufacturing), reducing reliance on higher-risk trading partners by diversifying supply chains, and tackling growing shortages of skilled workers.
Over the longer term, organizations that align with major economic shifts—such as energy security, critical minerals, and more active government involvement in industry—can stay competitive by working with government where it makes sense and building more resilient operations to manage ongoing geopolitical and trade uncertainty.
At PwC Canada, we’re ready to support your organization at each stage, helping translate policy into action, unlock incentives, and build resilient, future-ready strategies.
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National Managing Partner, Clients & Markets, PwC Canada
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