Ontario says its deficit is now projected at $16.9 billion this year and balance will not be reached until 2029-30.
The Story
Ontario finance minister Peter Bethlenfalvy says the province’s fiscal outlook has worsened, projecting a larger deficit this year and pushing the province’s planned path to a balanced budget back by one year.
Bethlenfalvy said in the legislature that the spring budget had forecast a $13.8-billion deficit, but a fall economic update now projects $16.9 billion in red ink. He linked the change to “the impact of U.S. tariffs” hitting sectors including steel, auto and manufacturing, as well as global conflicts such as the Strait of Hormuz affecting energy prices.
The province previously projected the books would balance in 2028-29, but Bethlenfalvy said that will not happen until 2029-30. The government said this is the fourth time since 2024 that Premier Doug Ford’s administration has extended its balance timeline by a year.
Officials said the outlook has deteriorated since the spring budget due to new U.S. tariffs, the threat of more tariffs, and the war in Iran. They said Ontario’s fiscal health is not in as dire shape as it was during the 2008-09 recession or the COVID-19 pandemic.
Ontario said it is adding $3.8 billion this year to its contingency fund, which will sit at $4.9 billion, with most of the added amount expected to be used by the end of the year. Bethlenfalvy also pointed to efforts to reduce fraud, error, waste and abuse through an “enterprise-wide” analysis of programs, saying an “enterprise integrity” investment could “conservatively prevent $500 million to $1.25 billion in losses annually.”
The interim Liberal leader, John Fraser, criticized the plan, saying it is “the worst fiscal management by any government in the history of Ontario,” and that Ontarians will continue paying for it for “the foreseeable future.” New Democrat finance critic Jessica Bell said the economic update did not include affordability measures to help with costs such as food and rent.
Bethlenfalvy said the government has already implemented affordability steps, including cutting HST for homebuyers of new homes, increasing minimum wage from $17.60 to $17.95, and implementing early gas-tax measures. He also referenced previously announced funding and business measures in the fall economic statement, including matching a federal tax break on capital investments and support for tariff-hit sectors such as steel and autos.
The province said it is changing eligibility rules for its computer animation and special effects tax credits to provide more support to film and television producers. It also included housing start projections showing starts decreasing slightly this year to 64,700 from 65,400 in 2025, with flat growth projected for 2027 and increases to 71,700 starts in 2028 and 75,400 in 2029.
← More stories