Ontario’s 2025 budget reveals a projected deficit of $14.6 billion, a $10-billion increase from previous estimates, as the Ford government ramps up spending to shield the provincial economy from U.S. tariffs and support key industries.
Unveiled Thursday by Finance Minister Peter Bethlenfalvy, the $232.5-billion budget is aimed at protecting workers, accelerating economic development, and bolstering infrastructure amid global uncertainty.
“Ontario and all of Canada are at a precipice,” Bethlenfalvy said. “This is a time for growth — not fear.”
Key Spending Initiatives:
- $5 billion for a new Protecting Ontario Account to help businesses facing major tariff-related disruptions
- $1 billion added to the Skills Development Fund over three years
- $500 million to launch a Critical Minerals Fund to grow Ontario’s mining and clean energy sectors
- $200 billion in infrastructure spending over 10 years, including:
- $61B for public transit (GO Expansion, subways)
- $56B for health infrastructure
- $30B for highways
- $30B for schools and child care
- $1.3 billion for Ontario Made Manufacturing Tax Credit over 3 years
- $9 billion in tax deferrals for businesses (announced in April)
Tariff Impact and Economic Forecast
Bethlenfalvy described Trump-era U.S. tariffs as a “wake-up call,” prompting Ontario to take proactive steps. The province’s economic growth is expected to slow to 0.8% in 2025 and 1% in 2026, down from 1.5% in 2024, before rebounding to 1.9% by 2027-28.
The province still projects a return to balance by 2027-28, with a $200 million surplus, though officials warn the outlook remains uncertain.
Health, Education, and Housing
Despite the overall budget increase, major social programs see limited growth:
- Health spending rises modestly to $91.1B, up from $89.3B — below the inflation rate
- Includes $235M to expand 305 primary care teams
- New fertility tax credit: 25% of costs up to $20,000/year (max $5,000)
- Education funding grows by $1B to $39.4B, but will remain flat through 2027
- Housing starts projection lowered to 71,800 units in 2025, well below the 100,000/year needed to meet the province’s 1.5 million homes by 2031 goal
Opposition Reaction
Opposition Leader Marit Stiles called it a “band-aid budget” that fails to address the long-term needs of Ontarians.
“There’s plenty of talk about alcohol pricing, but very little on child care or post-secondary education,” she said.
Housing critic Jessica Bell said the government appears to have “thrown in the towel” on housing.
Additional Budget Highlights:
- $75.5M in extra funding for homelessness prevention and emergency shelters
- $57M for new police helicopters in Niagara and Windsor
- $15.5M to expand medical isotope production
- Creation of an ‘Ontario Grown’ cannabis badge for products with 75% Ontario content
- Cannabis retail windows no longer need to be blacked out, though product displays must remain hidden from outside
- Adjustments to alcohol pricing and tax policies, leading to reduced LCBO and beer/wine/spirit tax revenues in 2025-26
Notably, the budget provided no new details on Premier Doug Ford’s proposal for a vehicle and transit tunnel under Highway 401, aside from saying feasibility work is ongoing.