Ontario Fall Economic Statement 2026

The Top Line

Ontario Finance Minister Bethlenfalvy set the stage for his 2026 Fall Economic Statement (FES) when he said yesterday, “the world isn’t changing……the world has changed!”

Today, the Minister rose to his feet in the Ontario Legislature to deliver the annual Fall Economic Statement, A Plan to Protect Ontario. Minister Bethlenfalvy acknowledged that “It’s an agenda that will continue supporting tariff-impacted workers and businesses as we fortify Ontario’s industrial base, and it’s an agenda that is at all times forward-looking, ambitious in its vision to unleash growth-ready sectors and focused on doing what’s necessary to protect Ontario for future generations.”

Ontario’s economic and fiscal outlook has weakened considerably since the 2026 spring Budget, reflecting continued uncertainty surrounding U.S. tariffs, trade disruptions and broader global economic pressures. The province has lowered its near-term growth projections, increased its deficit forecasts and pushed back its anticipated return to a balanced budget.

Today’s deficit was announced at $16.9 billion, more than $3 billion above the budget projection. And a balanced budget has now been pushed back again to 2029-30, when there is a projected surplus of $0.2 billion. This has been the trend in recent years as the challenges to balance the budget continue to mount.

In struggling with the deficit, the Government continues to invest in key areas, such as housing, small businesses, nuclear energy, critical minerals, AI and infrastructure resulting in an expected growth in the labour market going forward.

Real GDP Growth is also below budget projections for 2026 and 2027, however today’s projections have GDP Growth meeting budget projections of 1.8% in 2028 and 2.0% in 2029.

“In the face of U.S. tariffs, our government is helping Ontario businesses invest, grow and remain competitive on the global stage by lowering the cost of investing and doing business,” said Bethlenfalvy.

Fiscal Snapshot

While provincial revenues for 2026–27 are expected to exceed earlier projections, increased expenditures and additional fiscal reserves have more than offset these gains. The Government continues to emphasize responsible fiscal management while maintaining investments to support businesses and workers affected by tariffs, strengthen Ontario’s industrial base and advance major infrastructure projects.

• GDP: Real GDP growth is projected at 0.5% in 2026, down from the 1.0% forecast in the 2026 Budget. Growth is expected to gradually recover to 1.5% in 2027 (revised down from 1.7%), followed by 1.8% in 2028 and 2.0% in 2029. These projections remain slightly below private-sector forecasts to account for ongoing economic uncertainty.
• Deficit: Ontario now projects a $16.9 billion deficit in 2026–27, an increase of $3.1 billion from the $13.8 billion forecast in the 2026 Budget. Deficits of $12.7 billion in 2027–28 and $6.7 billion in 2028–29 are also projected, before returning to a modest $0.2 billion surplus in 2029–30. This represents another one-year delay in the Government’s anticipated return to balance.
• Labour Market: Employment has shown signs of recovery following a decline of 53,000 jobs in the first quarter of 2026, with gains of 62,000 jobs in the second quarter. The unemployment rate is projected to decline from 7.2% in 2026 to 6.1% in 2029 as economic growth strengthens.
• Revenues and Expenditures: Provincial revenues for 2026–27 are projected to be $2.0 billion higher than anticipated in the 2026 Budget, but forecasts have been revised downward by $3.9 billion in 2027–28 and $4.9 billion in 2028–29. The Government has also increased its Contingency Fund by $3.8 billion in 2026–27 to provide additional flexibility in responding to trade-related risks and uncertainty.

Debt and Borrowing

• Interest and other debt servicing charges are projected to rise from $17.4 billion in 2026–27 to $18.9 billion in 2027–28 and $20.4 billion in 2028–29.
• Ontario’s debt sustainability indicators remain mixed:
  • Net debt-to-GDP: 37.4% in 2026–27, slightly below the 37.7% projected in the 2026 Budget and remaining under the Government’s 40% target.
  • Net debt-to-revenue: 210%, exceeding the Government’s target of 200%.
  • Interest-to-revenue: 6.7%, remaining below the Government’s 7.5% target.

Taken together, the Fall Economic Statement presents a more challenging fiscal picture for Ontario, with slower economic growth, larger projected deficits and rising debt servicing costs placing additional pressure on the province’s finances.

Highlights

Ontario’s 2026 FES centers on protecting the province from tariff-related uncertainty while maintaining major investments in infrastructure, industrial capacity and workforce development, despite a weaker fiscal outlook.

Tariff Response and Industrial Strategy

• Ontario reports nearly $30 billion in tariff relief and business/worker support since April 2025. It is expanding access to the Ontario Together Trade Fund, Trade-Impacted Communities Program and Protect Ontario Financing Program to support investment, jobs and supply-chain resilience.
• The plan prioritizes the auto, steel and forestry sectors, along with reshoring supply chains, domestic procurement through the Buy Ontario policy, export-market diversification and reduction of internal trade barriers.
• A proposed 10-year Ontario Defence Industrial Strategy positions defence procurement and dual-use manufacturing as a growth opportunity. The Government projects the strategy could add 43,000 jobs, contribute more than $6 billion to provincial GDP and generate over $400 million annually in provincial revenue by 2035; these are government targets rather than confirmed outcomes.
• Other competitiveness measures include regulatory streamlining, faster permitting and tax measures intended to reduce the cost of capital investment. The Government states that its red-tape initiatives have reduced annualized compliance costs by more than $1.3 billion since 2018.

Infrastructure-led Growth

• The Government is maintaining a $210 billion, 10-year capital plan, including $37 billion in 2026–27, focused on highways, public transit, hospitals, schools and other public assets.
• Transportation investments include Highway 413, the Bradford Bypass, Ring of Fire access roads, highway expansions in Northern and Southwestern Ontario, and the upload of the Toronto’s Gardiner Expressway and Don Valley Parkway to provincial responsibility.
• Transit priorities include the GTHA’s Ontario Line, Yonge North Subway Extension, Scarborough Subway Extension, Eglinton Crosstown West Extension, Hazel McCallion Line, Hamilton LRT and restoration of the Northlander.
• The plan also emphasizes digital sovereignty and AI capacity through expanded secure data-centre, high-performance computing and digital infrastructure partnerships.

Workforce and Labour Market Measures

• Ontario is building capacity for high-demand sectors through the Skills Development Fund, which has supported more than 1,000 projects intended to help over 700,000 workers train for in-demand occupations.
• The Government is investing $1.7 billion for 70,000 additional college and university seats in STEM, AI, health care and skilled trades.
• An additional $64.2 million over three years for the In-Class Enhancement Fund is intended to support up to 4,000 additional apprentices annually. Skilled-trades outreach is also being expanded through Level Up! career fairs.

Health Care and Long-Term Care

• Ontario projects $100.7 billion in base health-sector program spending in 2026–27. The Government is continuing its $3.4 billion, four-year Primary Care Action Plan to connect everyone in Ontario to a family doctor or primary care team by 2029, including creating or expanding more than 300 primary care teams intended to connect approximately two million people to care.
• The province is investing approximately $64 billion in health infrastructure over the next decade, including nearly $50 billion in capital grants for more than 50 hospital projects and approximately 3,000 additional hospital beds.
• Other measures include $220 million over four years to expand the Ontario Learn and Stay Grant for future family physicians, more than $47 million for an Emergency Department Action Team to reduce hospital wait times and proposed regulatory changes permitting over-the-counter hearing aids. The Government is also maintaining its commitment to 58,000 new and upgraded long-term care beds.

Capital Markets and Securities Regulation

• Ontario reaffirmed its commitment to joining Canada’s securities regulatory passport system to reduce duplication, harmonize regulatory requirements and improve access to capital.
• The Government is also proposing to extend the duration of interim class orders issued by the Ontario Securities Commission, providing greater regulatory certainty while permanent rules are developed.
• Following industry consultations, Ontario will continue working with regulators and market participants to reduce regulatory burdens, facilitate domestic capital formation and strengthen the competitiveness of Ontario’s financial services sector.

Opposition Reaction

The Opposition Parties were quick to attack today’s announcement:

Official Opposition Leader and Leader of the Ontario NDP, Marit Stiles, MPP:

“This Fall Economic Statement is an admission of failure. Costs keep going up for the people of Ontario, and this incompetent government is only making it worse. We’re facing dueling crises of affordability and a trade war, while Doug Ford continues to party on the taxpayer dime and deliver nothing for the people of Ontario.”

Interim Liberal Leader, John Fraser, MPP:

“This is the worst fiscal management by any government in the history of Ontario”

Liberal Finance Critic, Stephanie Bowman, MPP:

“People across Ontario are struggling. Families are stretched thin, and workers in industries hit by tariffs are worried. Today’s Fall Economic Statement was a chance for the Ford government to show it has a plan. Once again, they failed to offer real support to Ontario. We can do better!”

What This Means to You

There are fewer specific programs in the 2026 FES and more general attempts to ease the impact of the U.S. economy on Ontario. Tariff relief dominates the Government’s approach while maintaining a need to keep an open mind for future changes due to potential changes in the U.S. Finance Minister Peter Bethlenfalvy made it quite clear that the Government is not wavering from its commitment to Ontario taxpayers. However, he acknowledges that unforeseen U.S. policies are having a major impact on the Ontario economy.

Ontario is investing to strengthen the province’s steel, automotive and critical minerals sectors to protect workers and businesses affected by U.S. tariffs. They are investing heavily in nuclear upgrades and expansion in Ontario and supporting modernization of other key industries. Ontario is unlocking critical mineral development to prepare Ontario to be competitive in the industries of the future, including advanced manufacturing, defence, energy, electric vehicles and strategic infrastructure.

Ontario is cutting red tape by reducing regulatory burden and accelerating approvals for businesses.

Above all, Minister Bethlenfalvy emphasized that he is respecting taxpayer dollars through responsible fiscal management and ongoing efforts to improve government efficiency. While the Government continues to emphasize its commitment to fiscal prudence, the revised projections suggest that economic uncertainty and the need to support key industries will continue to weigh on its efforts to restore fiscal balance.

The Government has identified the challenges and offered some relief; however, the Minister has warned that the uncertainty in the world today is making it virtually impossible to predict the future. Today’s program announcements should be seen as an effort to address things, but by no means is it offering a perfect solution.

The challenge moving forward will be balancing continued investments in economic growth, infrastructure and essential public services against a more constrained fiscal outlook and an extended timeline for returning to balance.

The Government will launch consultations this November to help inform the 2027 Budget and the next phase of its plan to protect Ontario, grow the economy, build critical infrastructure and deliver better services.

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