Federal Spring Economic Update 2026: Highlights Affecting Financial Services

The 2026 Spring Economic Update and its related Bill C-30, tabled last week, include several initiatives relevant to the financial services sector, including new measures to support national investment, enhance competition, support housing, and reduce financial crime. They also include various other measures that may be of interest to financial service providers in banking, insurance and payments.

Continued Investments in Nation Building

As pre-announced, the Spring Economic Update outlines the launch of a national sovereign wealth fund, the Canada Strong Fund (“the Fund”). The Fund will acquire equity in Canadian companies and projects, with a focus on nation building priorities referred by the new Major Projects Office. The Spring Economic Update details an initial $25 billion in seed funding over three years, with the potential to grow by allowing Canadians to invest in the fund. The government also plans to look at selling existing federal assets, such as airports, as a way of sourcing additional funding.

The Spring Economic Update also proposes to position Canada as a leading investment option for global capital, announcing Canada’s first Investment Summit in September 2026 and a sustainable finance conference in the coming year.

Although there is not much detail, the Spring Economic Update announces possible investment changes for federally regulated financial institutions (“FRFIs”). It indicates that the government intends to implement changes to provide more flexibility for FRFIs “to make investments that support innovative financial services and benefit the economy as a whole. The government proposes to amend the Bank Act “to ensure the review for national security risks of investments in Canadian businesses by foreign banks and their affiliates is consistent with how other foreign investments in Canada are assessed”. The government plans to publish related regulations this Spring, allowing FRFIs “to make a broader range of investments to improve financial services”.

Enhancing Productivity through Competition

The Spring Economic Update continues the emphasis in the 2025 Federal Budget on supporting competition to promote economic growth. However, most of the measures detailed as supporting consumers and businesses have been announced previously, including non-sufficient funds ("NSF") fee caps, prohibiting investment account transfer fees, completing the Consumer-Driven Banking Act, and an upcoming FCAC report on fees charged by banks.

The Spring Economic Update announces the government’s intention to engage with financial institutions, provincial regulators and other stakeholders “to better understand considerations related to their development and potential use of stablecoins, and other tokenised assets and whether additional regulatory clarity is needed”. The focus would be on supporting innovation while maintaining financial stability, protecting consumers—including in the context of insolvency of stablecoin issuers—and preserving regulatory integrity.

The Bank of Canada’s ability to charge cost recovery for its expanded mandate over payment service providers, consumer-driven banking and stablecoin supervision is also being clarified. In Bill C-30, the government proposes various legislative amendments to consolidate the Bank of Canada’s cost recovery processes. 

Additionally, the Spring Economic Update announces a “Whole-of-Government Competition Plan” to strengthen productivity and affordability “by ensuring that competition is prioritised throughout the federal government’s policies”. The plan would aim to ensure that existing and future government policies prioritize competition and limit negative impacts to the extent possible. Further information on this initiative is to be announced in the coming months.

Housing Affordability and Mortgage Regulation

While the Spring Economic Update provides data on how home prices are rebalancing and rents have decreased in some regions, it emphasizes that housing challenges remain for many Canadians.

Although there are no details provided, it states the government is “exploring ways to modernise mortgage products in line with best practices adopted by other G7 countries to improve access to homeownership and affordable housing for all Canadians”.

Following a proposed consultation, the government plans to amend mortgage insurance rules to permit private mortgage insurers to offer multi-unit mortgage loan insurance on five- to eight-unit residential properties, and amend other mortgage insurance rules to increase flexibility around three- and four-unit multi-plexes.

There are also several measures relating to increasing housing supply, including work to support construction innovation and updating building codes. Bill C-26, the Improving Housing Supply Act, was tabled on March 26, 2026, and proposes $1.7 billion in funding to provinces and territories for housing initiatives.

In addition, the Spring Economic Update includes two measures to support new home buyers: (1) a proposed extension of the grace period during which homeowners are not required to start repaying their Home Buyers’ Plan withdrawals from their Registered Retirement Savings Plan (RRSP); and (2) the elimination/reduction of GST for first-time home buyers in certain circumstances.

Combatting Financial Crime

The Spring Economic Update outlines several new measures to fight fraud and financial crime.

Canada will have a new federal agency tasked with investigating and recovering the proceeds of financial crimes. On April 27, 2026, the government introduced Bill C-29 to establish the Financial Crimes Agency. As outlined in the Spring Economic Update, the Financial Crimes Agency will be an independent agency reporting to the Minister of Finance “with police powers and civilian leadership” and a mandate to investigate serious and complex financial crimes, such as money laundering, serious fraud, and major capital market crimes, and to recover the proceeds of crime by “following the money”.

The new Financial Crimes Agency will also be tasked with participating in international efforts to counter financial crimes. It remains to be seen how the new agency will coordinate with FINTRAC, foreign and domestic law enforcement partners, and other financial sector regulators. The Spring Economic Update announces over $352.7 million to stand up the new agency, with additional funding for related support from the Public Prosecution Service and policy development with the Department of Finance.

At the same time, further funding was announced for FINTRAC to prioritize the detection and disruption of illicit financing that supports extortion, which involves work with financial institutions.

In addition, the Spring Economic Update emphasizes that money services businesses (“MSBs”) are an important source of competition in the financial sector, but that “criminals are increasingly abusing MSBs to launder money, finance terrorism, evade sanctions and defraud Canadians”. To support FINTRAC’s efforts concerning these crimes, the government proposes several measures relating to MSB regulation and new Ministerial Directive powers “to safeguard national security and the integrity of the financial system” that could have broader implications.

Noting a link to fraud and processing proceeds of crime, the Spring Economic Update also proposes to ban crypto ATMs.

There is a brief update in the Spring Economic Update on the National Anti-Fraud Strategy announced in Budget 2025, highlighting that regulations are to be published by the end of 2026 to support new fraud-related consumer protections in the Bank Act that are not yet in force. The government just concluded a public consultation on the Strategy, which requested feedback on proposed initial measures, including a comprehensive Multi-Sector Anti-Fraud Framework that strengthens market-conduct requirements for banks to prevent, detect and respond to fraud losses when they occur. The government plans to outline additional measures in the next year to further advance the strategy.

The Spring Economic Update also includes an update on consultations on the development of a Code of Conduct for the Prevention of Economic Abuse, noting that next steps will involve formal discussions with banks on the Code’s core elements.

More generally, the Spring Economic Update notes the government’s intention to explore new criminal justice reforms to support the investigation and prosecution of complex financial crimes.

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