Federal Budget Submission: Issue – 03

On Sept. 8, 2026, the Smart Health Benefits Association (SHBA) submitted formal recommendations to the Honourable François-Philippe Champagne, Minister of Finance, as part of the Government of Canada’s Pre-Budget Consultations for Budget 2026.

This is your association doing what it was built to do, putting the advisor and employer plan sponsor perspective directly in front of government. As the strategic guides for the employers who design and fund workplace benefits for millions of Canadians, you are the reason these recommendations matter. Here is what we asked for and why it matters to you and the employers you serve.

1. A Tax Credit to Help Small Employers Offer Retirement Plans.

Over nine million Canadian employees have no workplace retirement plan. Fewer than 19 per cent of small and mid-sized employers in Canada sponsor one, compared to nearly half of similar-sized U.S. firms. That gap is not about employer generosity. It is about start-up costs that are simply too high for small businesses to absorb.

SHBA is asking the federal government to introduce a refundable, time-limited Small Employer Retirement Plan Tax Credit for employers with fewer than 100 employees. The credit would help cover plan design, set-up and employee education costs, and is deliberately neutral across plan types, including group RRSPs, PRPPs, DPSPs and group TFSAs. The goal is to help Canadians save for the future, by making it easier and more cost-effective for smaller-sized employers to set up retirement plans. This is a direct opportunity for advisors working with small business clients to open new conversations about retirement planning.

2. Protect Employer-Paid Virtual Care.

More than 10 million Canadians had access to employer-funded virtual care in 2023, generating over half a million virtual visits. For the six million Canadians without a family doctor, it is often their only timely access to care.

SHBA asked the federal government to enable provinces and territories to protect this coverage, not displace it. The plans your employer clients fund are delivering care that Canadians have come to depend on. That value needs to be recognized and protected.

3. Pharmacare That Fills Gaps, Not One That Displaces Coverage.

More than 27 million Canadians already have drug coverage through their workplace benefit plan. Less than 10 per cent of Canadians have no drug plan at all. The federal pharmacare, as currently designed, risks duplicating coverage Canadians already enjoy through their workplace benefit plans and it cannot be scaled beyond diabetes and contraceptives, given funding limitations, which will leave millions of Canadians uninsured for medications related to other health needs.

SHBA’s position is clear: focus public pharmacare dollars on the Canadians who actually have no coverage. A “fill the gap / no one left behind” approach delivers more access per public dollar, and protects the plans your employer clients have built and funded.

4. A Better Path for Rare and High-Cost Medications.

No small employer plan, and no family, should carry catastrophic drug costs alone. The current patchwork of public programs, private pooling arrangements and manufacturer support, leaves patients navigating a complex maze at the worst possible moment.

SHBA is asking the federal government to co-design a public-private financing and risk-pooling model with employer plan sponsors, one that gives patients a single, predictable pathway. We also called for greater provincial alignment so that Canadians are not disadvantaged simply because of where they live.

5. Modernize the Medical Expense Tax Credit.

The eligible medical expense list under the Income Tax Act was written for an older model of healthcare delivery. Newer interventions, such as virtual care, digital therapeutics and a growing range of mental health and allied health services do not fit cleanly within it. As well, a Canadian’s ability to claim care costs can vary depending on their province of residence, the same service, delivered by the same type of practitioner, treated differently by tax rules depending on postal code.

SHBA is asking the federal government to update the eligible medical expense list, harmonize practitioner recognition across provinces and modernize the Private Health Services Plan rules so that small employers and the self-employed can offer health spending accounts with confidence and without unnecessary compliance burden.

6. A National Licensing Framework for Benefits Advisors.

This one matters directly to you, and to every client you represent. When your clients grow and expand (or move) across provincial borders, the current fragmented licensing regime forces service disruptions as clients must wait for you to obtain additional sub-national licenses or they have to look for a new advisor, ending the relationship and trust built up over time.

SHBA is asking the Department of Finance to implement a harmonized national mutual recognition framework for benefits advisors, developed in collaboration with the CCIR, CISRO and provincial and territorial authorities. One Canada – One licence standard. Better outcomes for advisors and the employers they serve.