The Top Line
In delivering today’s Economic Update and Fiscal Review, Ontario Finance Minister Peter Bethlenfalvy acknowledged that the Ontario economy is navigating turbulent waters, with Real GDP slowing to 0.8% this year (from 1.4% last year).
The Economic Update highlights the significant challenges U.S. tariffs are having on the Ontario economy – specifically in automotive, steel, aluminum and copper manufacturing sectors – and how the tariffs have undermined competitiveness, slowed growth, and impacted workers reliant on cross-border trade.
Minister Bethlenfalvy is seeking to respond to the economic headwinds he faces by investing in measures to protect workers and jobs across the province. To this end, he announced nearly $30 billion in relief and support for workers and businesses affected by tariffs and additional funding for retraining workers impacted.
At the same time, the Minister is focused on making investments to build a more competitive Ontario Economy. These investments are focused on expanding Indigenous partnerships, moving forward with plans for the Ring of Fire, and key infrastructure priorities for the Ford government, including the expansion of Highway 7, a new study for a Highway 401 tunnel in Toronto and the GTA, and the GO 2.0 rail program.
Premier Doug Ford was re-elected with a majority government this past February because voters strongly felt that he and his government were best positioned to lead Ontario through the economic turmoil caused by President Trump’s imposed tariffs. Today’s Economic Update provides a sense of both the impacts that those tariffs are having on the economy, as well as how Doug Ford and Peter Bethlenfalvy are seeking to make investments to protect jobs and create economic growth.
Fiscal Snapshot
Ontario’s economic outlook reflects a measured fiscal stance amid ongoing global uncertainty, particularly linked to U.S. trade tensions and elevated interest rates.
- Economic Outlook: Real GDP growth is projected to slow to 0.8% this year, down from 1.4% last year, before gradually recovering. Growth assumptions remain slightly below private-sector forecasts to maintain prudence amid heightened trade uncertainty and tariff exposure.
- Deficit: The province projects a $13.5 billion deficit in 2025–26, improving by roughly $1.1 billion from the Budget forecast. The deficit is expected to decline to $7.8 billion in 2026–27, before returning to a modest $0.2 billion surplus in 2027–28.
- Inflation: The inflation outlook remains uncertain, though pressures are expected to moderate as global supply chains normalize and domestic demand eases.
- Economic Structure: Ontario’s economy remains diverse and resilient, with goods-producing industries representing about 22% of GDP and services 78%. This helps buffer the province from tariff-related risks.
Debt and Borrowing
- Interest on debt is projected to rise from $15.1 billion to $17.1 billion, reflecting higher borrowing costs.
- Debt sustainability metrics continue to improve relative to budget forecasts:
- Net debt-to-GDP: 37.7% (below the 40% target)
- Net debt-to-operating revenue: 208% (below the 200% target threshold)
- Net interest-to-revenue: 6.4% (well below the 7.5% target)
- Ontario has completed $32.4 billion of its $42.5 billion borrowing program, slightly under plan, maintaining strong cash reserves to navigate fiscal pressures.
The update reiterates Ontario’s responsible fiscal posture, focusing on protecting jobs and businesses from tariff impacts while sustaining investments in health care, education, and infrastructure.
Highlights
The 2025 Fiscal Update focuses on protecting Ontario workers and businesses from trade and tariff impacts, strengthening economic resilience, and sustaining investments in public services. The government emphasizes continuity and implementation over new spending, maintaining its path toward balance by 2027–28.
Protecting Workers and Businesses
Ontario has announced nearly $30 billion in relief and support for workers and businesses affected by tariffs. This includes up to $1 billion in liquidity through the Protect Ontario Financing Program, an additional $500 million in federal funding, and $20 million for Employment Response Centres to help with retraining. A six-month interest- and penalty-free tax deferral will also free up to $5 billion in liquidity for about 80,000 businesses.
Building a Competitive Economy
Ontario is strengthening competitiveness by advancing Indigenous partnerships, unlocking the Ring of Fire’s economic potential, and streamlining approvals for major projects. The Building Ontario Fund will now include $3 billion in loan guarantees, alongside $61.8 million for the Geraldton Main Street Rehabilitation Project and a new One Project, One Process framework to cut mine-approval timelines in half.
The province is investing in diversification and innovation through a $3.5 billion Sustainable Canadian Agricultural Partnership, $50 million for Better Jobs Ontario training programs, and plans for new Special Economic Zones with expedited approvals.
Additional supports include $150 million for the Ontario Together Trade Fund, $600 million for a Critical Minerals Processing Fund, and $4 billion to expand the Protecting Ontario Account. The Invest Ontario Fund grows to $1.3 billion, and $90 million in new venture capital will target defence, life sciences, and advanced technologies.
Infrastructure and Public Services
Ontario is investing $201 billion over 10 years in infrastructure, including Highway 7 expansion, a new Highway 401 tunnel study, and the GO 2.0 rail program. The plan also includes $56 billion for hospital projects, creating 3,000 new beds, and $30 billion for schools and child-care spaces.
Health-care and training investments include $1.1 billion over three years for home care, $262 million for the Learn and Stay Grant, 123 new beds at Halton Healthcare, and upgrades to the Charles H. Best Diabetes Centre.
Keeping Costs Down
Nearly $11.5 billion in direct relief will help families manage rising costs. Measures include removing the 8% provincial HST on new homes up to $1 million, raising the minimum wage to $17.60/hour, and permanently eliminating 407 East tolls, saving drivers about $94 million annually.
Climate
The government announced that it is cancelling the $1.5 billion Cap-and-Trade carbon tax to remove its cost impact from items such as gasoline, diesel fuel and natural gas.
The government will repeal sections 3–5 of the Cap-and-Trade Cancellation Act, 2018 – these sections cover the establishment of targets for the reduction of greenhouse gas emissions, the need for the Minister of the Environment, Conservation and Parks to prepare a climate change plan and for the Minister to provide a progress report on its climate change plan.
Borders and Communities
Ontario is enhancing safety and border enforcement through a new Beneficial Ownership Registry, $121 million for the Guns, Gangs and Violence Reduction Strategy, $113 million for Operation Deterrence, and $345 million to renew the Anti-Human Trafficking Strategy through 2030.
Opposition Reaction
Not surprisingly, the Opposition Parties were critical of today’s announcement:
Marit Stiles, Leader of the Official Opposition and Leader of the NDP:
“Families want stability and a fair shot at getting ahead,” said Stiles. “Today’s announcement did not move Ontario any closer to that.”
“Doug Ford is a jobs disaster, and this Fall Economic Statement fails to deliver for working people. Ontario’s unemployment is highest in a decade, and our housing starts are at their lowest in a decade. By every measure, this government is failing,” she said.
“Today, the Ford government had the opportunity to deliver real hope: with a real jobs plan, lower costs, and investments to strengthen Ontario. Instead, it only leaves them with more fear and uncertainty. With these cuts to health care and education, this is a recipe for longer wait times, more crowded classrooms, and higher costs for Ontarians,” she said.
Ontario Liberal Party on X:
“Doug Ford’s Fall Economic Statement makes one thing clear: Ontario’s economy is failing because his leadership is.
Rising poverty, crumbling hospitals, underfunded schools and still, no plan to prioritize what families need to get ahead.
Let’s call this what it is: A Failed Economic Strategy.”
Mike Schreiner, Leader of the Ontario Green Party:
“This government has no plan to help out everyday Ontarians,” said Shreiner.
“No plan for the families lining up at foodbanks because there’s no money left for groceries. No plan for the 80,000 people who are homeless in this province because there is no affordable housing in their community. No plan for the young people who work so hard but can’t get ahead in the face of high unemployment and skyrocketing housing costs,” he said.
“People are losing their jobs, the cost of living is skyrocketing, housing costs are still sky-high, and Doug Ford is talking about a tunnel. People are feeling pinched and this government is MIA where it counts most.” he said.
What This Means to You
Finance Minister Peter Bethlenfalvy made it quite clear that, “as a province and a country, we find ourselves in the midst of trade uncertainty that we did not ask to be a part of, causing anxiety for workers and businesses alike.”
Today’s economic statement provided little change to the economic outlook for the province and in fact, lowers some expectations previously announced. Led by a slowing trend in the GDP, the statement recognizes the tough economy, but still maintains the government’s commitment to a government surplus in 2027-28.
In short, the government believes that the framework established in Budget 2025 earlier this year protects Ontario workers, businesses and communities against these trying times.
While it appeared for many months that tariffs were here to stay, they are currently under scrutiny in the USA, with a Supreme Court decision pending on their legitimacy. The government, however, continues to address the impacts of tariffs to protect Ontario, even claiming the province’s finances “to be in the strongest position they have been in over a decade”.
There were few new initiatives in today’s statement, but a rebate for the full provincial portion of the HST for first-time home buyers of most new homes is significant. Also, investing an additional $100 million in the Ontario Together Trade Fund (OTTF) to further help small and medium-sized enterprises triples the size of the program. On the climate front, the government is moving to cancel the unpopular Cap-and-Trade carbon tax imposed by the previous government.
The government has also reaffirmed its commitment to some previously announced infrastructure projects, including the GTA highway system, a study to review the 401 tunnelling proposal and access to the Ring of Fire.
