The federal government released its 2026 Spring Economic Update this week. After reviewing the details, the headline for those of us in M&A is clear:
This is a stable, no-disruption update.
No major tax changes. No structural shifts. No urgency being created by policy.
And in this market, that’s actually a positive.
When governments step back from making material changes, transactions stop being driven by deadlines and start being driven by fundamentals — which is exactly where disciplined buyers, prepared sellers, and strong advisors tend to perform best.
Below are the key takeaways and what they mean in practice.
A Stable Tax Environment Keeps the Focus Where It Belongs
There were no changes to personal or corporate tax rates in this update.
From an M&A perspective, that matters more than it might seem.
Without looming tax increases, sellers are not under pressure to accelerate a transaction. Buyers are not adjusting pricing based on near-term policy shifts. Valuations remain grounded.
In short, deals can proceed based on:
- Business quality
- Growth profile
- Market positioning
- Process execution
—not tax timing.
For advisors, this simplifies conversations. The focus stays on maximizing value, not reacting to external deadlines.
Employee Ownership Trusts: Now a Permanent Part of the Exit Landscape
One of the more meaningful developments is the decision to make the $10 million capital gains exemption on sales to Employee Ownership Trusts (EOTs) permanent.
Previously, this was set to expire at the end of 2026. Its permanence changes how seriously it should be considered.
EOTs are particularly relevant for:
- Founder-led and family-owned businesses
- Owners without a clear successor
- Situations where legacy and employee continuity matter
At the same time, they are not a simple solution.
Selling to an EOT typically involves:
- Transitioning control away from the owner
- Navigating complex structuring requirements
- Meeting strict eligibility criteria
In many cases, a well-run strategic sale process will still produce a stronger financial outcome.
But the key shift is this:
EOTs are no longer a niche or temporary option — they are now a permanent part of the exit toolkit.
For advisors, the role is not to advocate for or against them outright, but to ensure clients understand how they compare to other exit paths.
CPP Reduction: A Modest but Notable EBITDA Tailwind
The update also includes a reduction in CPP contributions from 9.9% to 9.5%, effective January 1, 2027.
On its own, this is not deal-changing.
However, it does have a modest impact:
- Slightly lower labour costs
- Incremental improvement in EBITDA
In competitive processes, even small improvements in normalized earnings can influence valuation. It’s a detail worth incorporating into forward-looking financial discussions.
Targeted Support for Trades and Industrial Sectors
There are also sector-specific measures worth noting:
- The labour mobility deduction for tradespeople increases significantly
- Additional incentives are being directed toward LNG and carbon capture projects
These measures won’t affect every transaction, but they do support:
- Labour stability in trades-heavy industries
- Margins in certain industrial and energy-related businesses
If you’re active in these sectors, the implications are more directly relevant.
Increasing Complexity Beneath the Surface
While headline changes are limited, there is an important underlying trend:
Tax complexity continues to increase.
A number of previously announced proposals remain unresolved, contributing to a more complicated environment overall. For business owners, this means:
- More structuring considerations
- Greater administrative burden
- Higher risk of suboptimal decisions without proper guidance
From an advisory perspective, this is where real value is created.
Owners who begin planning early — well before a transaction — will have:
- More flexibility
- Better structuring options
- Stronger outcomes
Those who wait tend to have fewer levers to pull.
The Bottom Line
This is a steady, fundamentals-driven environment for M&A.
There is:
- No policy-driven urgency
- No artificial pressure to transact
- No disruption to valuation frameworks
Which puts the emphasis squarely on execution.
The differentiators in this market are not external — they are internal:
- Preparation
- Process quality
- Positioning
- Advisory strength
What This Means for Owners and Advisors Right Now
If you’re a business owner thinking about an exit in the next 2–5 years, this is the window to act — not by rushing to market, but by getting prepared properly.
That means:
- Understanding your true market value today
- Identifying and closing gaps that buyers will diligence
- Exploring all exit pathways (including strategic sale vs. EOT)
- Building a process that creates competitive tension
If you’re an advisor, this is the moment to lean into proactive conversations. The absence of urgency is often when the most value can be created — before timelines compress and options narrow.
In a market like this, the biggest risk isn’t timing — it’s under-preparation.
That’s exactly where structured planning frameworks like ExitProof come in.
ExitProof is designed for owners who are 2–5 years out from a transaction, helping them:
- Assess readiness from a buyer’s perspective
- Identify value gaps early
- Build a clear roadmap to maximize enterprise value
- Evaluate all viable exit options — not just one path
In a stable market, this kind of preparation is a competitive advantage.
If you’re:
- Considering a sale in the next few years
- Advising clients who are approaching that decision
- Or simply want to understand what your business would be worth in today’s market
Now is the time to start that conversation.
The companies that achieve premium outcomes aren’t the ones that react — they’re the ones that prepare early and run a disciplined process when the time is right.
Happy to connect with anyone who wants to think through timing, positioning, or exit options — including how ExitProof fits into that journey.
Jim Friesen, MBA, CPA, CM&AA
Founder