THE TOP LINE
Finance Minister Peter Bethlenfalvy today released the Ford government’s Budget 2026, titled “A Plan to Protect Ontario”. And once again, for his sixth consecutive year, the Budget maintains the current tax levels while focusing on economic stability and growth. The Budget invests in competitiveness and infrastructure while grappling with rising costs.
The Minister stressed that “the world has changed — and Ontario must be ready… even if that means being prepared for tougher times…we cannot eliminate uncertainty, but we can mitigate risks with a responsible, balanced fiscal approach…”
Announced in the days leading up to today, the Budget highlights investments in housing, where the Government will rebate the full HST (in partnership with the Federal Government to include their portion), for all new homes up to $1.5 million, for all home buyers.
The Budget provides a provincial guarantee through the Indigenous Opportunities Financing Program (IOFP) to support a $250 million investment to increase the production of life-saving medical isotopes.
The Government is accelerating the plan to complete the construction on the all-seasons roads to the Ring of Fire five years ahead of schedule, with construction planned to start in June 2026 and roads beginning to open in November 2030. With federal cooperation, they will eliminate the duplicative impact assessment process and pave the way for advanced exploration activities in the Ring of Fire.
The Ontario government also announced plans to expand Billy Bishop Airport in downtown Toronto.
For education, a new fund for individual teachers to purchase classroom supplies, offsetting the current situation where teachers often reach into their own pockets for basic supplies.
Tariffs continue to impact the Ontario, and Finance Minister Bethlenfalvy has repeatedly said they are a “headwind” for Ontario’s economy, particularly for trade-exposed industries, and reinforces the need to strengthen competitiveness and resilience at home.
BUDGET HIGHLIGHTS
Protect Workers and Businesses from Tariffs and Economic Uncertainty
- Introduced the Protect Ontario Account Investment Fund, in which the province will invest up to $4 billion to attract investment from pension funds and other private capital to advance Ontario’s long-term economic and strategic priorities.
- Investing an additional $107 million over three years, starting in 2026–27, to renew support for the Critical Technologies Initiatives Program.
- Investing $9.4 million over three years, beginning in 2026–27, to renew grants for the Summer Company and Starter Company Plus programs delivered through the Small Business Enterprise Centers (SBECs) network.
Protect Ontario By Building the Most Competitive Economy in the G7
- Ensuring Ontario’s small businesses continue to stay competitive and resilient by proposing to cut the small business Corporate Income Tax (CIT) rate from 3.2% to 2.2% effective July 1, 2026. By cutting the rate by more than 30%, over 375,000 Ontario small businesses would benefit from an additional $1.1 billion in CIT relief over the next three years.
- Investing an additional $117.1 million over three years, starting in 2026–27, through the Ontario Research Fund–Research Infrastructure (ORF-RI), which will help continue to build, renovate and equip cutting-edge research facilities for critical projects across priority sectors, including agri-food, critical minerals, information technology, life sciences and manufacturing.
- Investing $26 million over three years, starting in 2026–27, to maintain existing and planned levels of support for Ontario’s research institutes.
- Extending the Northern Ontario Resource Development Support Fund with a new ongoing investment of $15 million annually. This funding will help Northern municipalities invest in core assets such as roads and bridges, access new economic opportunities through resource development and help mitigate the impacts of resource development on local infrastructure.
- Proposing legislation to enable certain pension plans — defined contribution plans or plans with additional voluntary contributions — to offer a new option for retirees called a Variable Life Benefit (VLB).
Protect Ontario’s Services
- Increasing funding for the Ontario Autism Program to nearly $1 billion annually, which will enable more children and youth to access core clinical services while further strengthening sector capacity across the province.
- Expanding Ontario’s four-year investment in the Primary Care Action Plan to $3.4 billion from 2025 – 2029, furthering the province’s plan to connect everyone in Ontario to a family doctor or primary care provider.
- Providing support to growing communities by increasing modern learning spaces for students by investing about $30 billion over the next 10 years, including over $22 billion in capital grants, to support new and redeveloped schools and childcare projects.
- Investing approximately $64 billion over the next decade in health infrastructure, including approximately $50 billion in capital grants,
- Providing $139.4 million in additional annual funding to support high-quality, resident-centred, and sustainable long-term care.
Keeping Costs Down
- Providing a temporary rebate on the full provincial portion of the Harmonized Sales Tax (HST) on all new homes valued at up to $1 million, subject to federal legislative enactment, helping more families realize the dream of homeownership.
- Saving daily transit users in the Greater Toronto and Hamilton Area (GTHA) up to $1,600 per year, by extending the Ontario One Fare Program for an additional two years.
- Proposing new consumer protection measures that will make it illegal for tickets to concerts, cultural events, sports games, theatre performances and other live events held in Ontario to be resold for more than their original cost.
Protect Ontario’s Border and Communities
- Investing $32.5 million in 2026–27 as part of Operation Deterrence 2.0 to establish both the Border Security Grant to enable municipal and First Nations police services to acquire specialized assets, such as drones, marine vessels, and surveillance technologies, and the Border Integrity Investigation Fund to provide targeted operational funding to police services to address border‑related enforcement gaps.
Strengthening Enforcement and Partnerships to Combat Contraband Tobacco
- The Government is engaging law enforcement, industry, public health and First Nations partners to explore additional opportunities to address contraband tobacco and its links to organized crime. This includes examining options to potentially enhance police authorities under the Tobacco Tax Act.
ECONOMIC OVERVIEW
Ontario’s economy has demonstrated resilience despite ongoing economic and geopolitical uncertainty, including persistent trade tensions and global supply chain pressures. Economic performance in 2025 exceeded expectations, with real GDP estimated to have grown by 1.2%, providing a stronger-than-anticipated foundation heading into the medium-term outlook.
The Province’s fiscal outlook reflects a measured approach to managing economic uncertainty while continuing to invest in key priorities. Ontario’s deficit for 2025–26 is $12.3 billion, representing an improvement of $2.3 billion compared to the previous budget forecast. The deficit is expected to increase to $13.8 billion in 2026–27 as the Government continues to prioritize investments in public services and economic growth, before declining to $6.1 billion in 2027–28 and returning to balance with a modest surplus of $0.6 billion in 2028–29. Over the outlook, the net debt-to-GDP ratio is expected to remain below 40%; however, its upward trajectory over the medium term suggests that debt levels will remain a point of contention as Ontario continues to balance elevated spending with its stated path to fiscal sustainability.
Economic growth is expected to remain moderate in the near term before strengthening over the forecast horizon. Real GDP is projected to increase by 1.0% in 2026, followed by growth of 1.7% in 2027, 1.8% in 2028 and 2.0% in 2029. These projections reflect a cautious planning approach, set slightly below private-sector expectations, and account for continued uncertainty in the global economic environment.
Ontario’s labour market has also outperformed expectations, with employment increasing by 80,900 net new jobs in 2025, driven primarily by private sector gains. While employment growth is expected to continue, labour market conditions are projected to gradually stabilize, with the unemployment rate declining from 7.7% in 2025 to 6.2% by 2029 as economic conditions improve.
Despite this relatively stable outlook, risks remain elevated. Ongoing trade tensions, including the impact of U.S. tariffs, alongside geopolitical instability and potential supply chain disruptions, continue to pose downside risks to growth, investment, and business confidence. Ontario’s high degree of trade integration and exposure to external markets leaves the province particularly sensitive to these global developments.
In response, the Government’s fiscal and economic strategy is focused on strengthening competitiveness and resilience. The 2026 Budget builds on prior commitments through measures aimed at reducing costs for businesses and households, encouraging investment, and supporting job creation. This includes continued implementation of the Tax Action Plan, targeted investments in infrastructure, energy, and critical minerals, and efforts to streamline approvals and reduce regulatory burden.
At the same time, the Province is maintaining a balance between economic support and fiscal discipline. The inclusion of reserves, contingency funds, and a clear path back to balance reflects an effort to preserve fiscal flexibility while continuing to invest in public services and long-term economic growth.
OPPOSITION REACTION
Marit Stiles, Leader of the Ontario NDP (Official Opposition)
“This budget fails the test to meet Ontario’s priorities. Young people and families are struggling with sky-high rents, fewer opportunities, and soaring costs. Budget 2026 was an opportunity to deliver hope and relief for our province during a difficult moment.”
John Fraser, Interim Leader of the Ontario Liberal Party
“Doug Ford and this government are tired and adrift. The things that people count on every day aren’t there.”
Mike Schreiner, Leader of the Ontario Green Party
“Doug Ford is sending a message to everyone in this province struggling to keep a roof over their heads and food on the table: tough luck.”
WHAT THIS MEANS FOR YOU
“We will be cautious where we must be and ambitious where we should be” is how Minister Bethlenfalvy summarized his budget today.
He also added: “To help the province navigate these times and come out stronger, we are investing in strategic priorities such as energy, critical minerals, key infrastructure and critical technologies that will make our economy stronger, while cutting red tape and creating the conditions for businesses to grow, supporting workers and strengthening Ontario’s economy.”
The Government is taking credit for doing better than anticipated in last year’s budget despite the challenging international times and imposed U.S. tariffs. Ontario’s overall tariff average is 5.4% while the average global rate was 9.8% and the deficit improved by $2.3 billion from its projection a year ago.
The Government continues to spend in the short-term but is still projecting a balanced budget in just two more years. This will be worth monitoring given the Government’s continued high level of spending in this budget.
Based on the numbers presented today, Budget 2026 still appears to have been a reasonable foundation for attacking the changing world economy. Ontario is dealing with the tariffs, so far, and applying new funds to new areas, especially in housing, health care and attracting new foreign investment.
The Government continues to look into some new initiatives by moving to expand Billy Bishop Airport in Toronto. In fact, there is a quiet study looking into land use across from the Rogers Centre which may be associated with his initiative. Also, the province has now launched a feasibility study for tunnelling under Highway 401 across the top of Toronto – a plan that at one-time was deemed to be unrealistic.
While deficits are running longer than previously announced, the Government believes it can still balance the Budget by 2028-2029. We will see if they can deliver on this commitment. They clearly believe that they have the framework in place to face the unique challenges of today by protecting Ontario workers, businesses and communities.
