Ontario projects $14.6-billion deficit amid tariff impacts

Ontario’s Minister of Finance Peter Bethlenfalvy. Photo by Peter J. Thompson/National Post files

Article content

TORONTO — United States President Donald Trump‘s tariffs cast a pall over Ontario’s budget Thursday, dragging down GDP growth and knocking the province off its path to balance, with a $14.6-billion deficit projected this year.

Article content

Article content

Now is the time to spend on infrastructure and job creation in Ontario so the province can come out stronger on the other side, Finance Minister Peter Bethlenfalvy said.

Article content

Article content

“Ontario and all of Canada are at a precipice and we need to take serious steps to make sure we do not find ourselves anywhere near the bottom,” Bethlenfalvy said as he tabled his $232.5-billion budget.

Article content

Article content

“Whether it is our competitive advantage in critical minerals, energy, technology, talent, our workers, or any other area, we will need to bolster our economy by investing in our powerful and promising industries by building more, and building faster and by protecting jobs and job creators.”

Article content

The province had previously eyed a balanced budget for 2026-27, but that came before the election of Trump and the implementation of tariffs and now Ontario is set to inch into the black in 2027-28 with a small surplus.

Article content

In the meantime, Bethlenfalvy’s budget is forecasting a $14.6-billion deficit this fiscal year — up from a projection of $4.6 billion in last year’s budget — and a deficit of $7.8 billion next year.

Article content

Much of the increased pressure comes from about $30 billion in spending to stimulate the economy in the face of tariffs, including a $5-billion fund to give businesses relief, adding $5 billion to an infrastructure financing fund, and implementing a new, $500-million Critical Minerals Processing Fund.

Article content

Article content

As well, the government is planning to add $1 billion to its Skills Development Fund to retrain workers, add $600 million to a fund that helps businesses set up or expand in Ontario, $200 million for a shipbuilding grant program and create a $50-million fund to help businesses make new supply chains and help boost interprovincial trade.

Article content

Article content

But for all of the various funds for businesses, opposition leaders said there is very little in the budget for people and their most pressing needs, such as housing and health care.

Article content

“This budget talks a lot about cars and infrastructure,” Green Party Leader Mike Schreiner said. “It doesn’t talk a lot about actually investing in people.”

Article content

NDP Leader Marit Stiles called it a “Band-Aid budget.”

Article content

“It is a missed opportunity to strengthen Ontario,” she said. “The government could have built a tariff-proof future with good schools, affordable homes, world-class public health care and reliable public services. Instead, the Ford government chose more cuts, less relief and no real support for families who need help right now.”

Article content

The financial accountability officer has said that a “modest” recession may occur in 2025. Bethlenfalvy said he wouldn’t speculate on whether Ontario will enter recession territory, but all of the investments announced in the budget are meant to shore up the province’s economy at a critical time.