Spring Economic Update Statement

"This Spring Economic Update points in the right direction, but Canada cannot incrementalize its way out of a productivity crisis. There is real progress here – on procurement, SR&ED, and the discipline of cutting consulting spend. This is the warm-up. Budget 2026 will be the true test of whether this government, with a new majority, can boldly execute the vision needed to build a 21st century innovation economy." — Lucy Hargreaves, Co-Founder and CEO, Build Canada

Over the last 18 months, Build Canada has shared bold policy ideas to grow Canada's economy. From defence procurement to tax reform to fiscal responsibility, Build Canada’s message has been clear: Canada needs urgency, productivity, and the framework to build a 21st century innovation economy.

This Spring Economic Update gets some of the direction right, but needs more boldness and urgency to unlock growth.

In particular, we're encouraged to see:

  • A 20 percent reduction in external consulting spend – $450 million in savings by 2027-28 and $900 million annually thereafter – directionally aligned with our memo Creating a More Productive Government.
  • Improved SR&ED administration, implemented April 1, 2026, making the program meaningfully more usable for entrepreneurs, as called for in our memo to Fix SR&ED.
  • Stand-alone Defence Investment Agency legislation and amendments to the Defence Production Act, building on procurement reform proposals in our defence memos.
  • A Whole-of-Government Competition Plan and CRA prioritization of advance income tax rulings for productivity-enhancing and nation-building investments.

However, many commitments are incremental and lack the specificity required to drive change. For example:

  • The Whole-of-Government Competition Plan, the AI Strategy, and rules for stablecoins and tokenized assets remain "intentions to launch" or "intentions to engage." Every G7 peer is moving faster on the digital economy than we are.
  • The 2025-26 deficit improved by $11.5 billion to $66.9 billion, but the improvement appears to have come mostly from higher-than-expected oil prices, not spending restraint. The government's own Higher Investment Scenario outlined in the Update depends on global energy demand. A growth path that hinges on commodity tailwinds is not yet a productivity plan.
  • On the Canada Strong Fund, structural questions remain – independent governance, a sustainable capital source, and discipline against the political-capture risk that hollowed out Alberta's Heritage Fund. Build Canada will keep sharing ideas to inform that design conversation.

Execution matters more than promises, more than plans, more than strategies. The Spring Economic Update is a step. Budget 2026 is the test of whether this government, with a new majority, will match the ambition on paper with the bold, rapid moves Canada needs to build a 21st century innovation economy.

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