Overview
Hon. Peter Bethlenfalvy, Ontario’s Minister of Finance, has released the province’s Fall Economic Statement (FES), entitled “2026 Ontario Economic Outlook and Fiscal Review: A Plan to Protect Ontario”. The government’s strategy aims to achieve a balanced budget by 2029/2030, despite facing geopolitical challenges and a declining percentage in exports to the U.S. resulting from the trade war.
The FES is divided into two main themes: “Fortify Ontario’s Industrial Base” and “Build Ontario for Growth”.
The government is making major investments to address the economic uncertainty caused by U.S. tariffs and trade policy and has targeted investments to ensure there is a plan to balance the budget by 2029/2030. Ontario has contrasted its deficit-to-GDP ratio of 1.3% with the federal government’s ratio of 2.4%, underscoring Ontario’s strong fiscal position moving into 2027.
This November, the government will launch consultations to help inform the 2027 Budget, which is the next opportunity for engagement on funding from the Government of Ontario.
Key Items
New initiatives being announced as part of the 2026 FES fall under the following themes:
Tariff Supports
Canada-Ontario Tariff Action Plan: New $8.7 billion joint investment with the federal government to support Ontario’s critical minerals, automotive, and steel sectors to protect businesses and workers.
Ontario Together Trade Fund (OTTF) and the Protect Ontario Financing Program (POFP): the government has expanded eligibility for the OTTF and POFP programs.
Unleashing Our Economy
Ontario Competitiveness Tax Cut: $8 billion in provincial tax relief by permanently allowing businesses to write off 100% of the value of certain capital investments. This builds on the federal government’s Productivity Mega Deduction initiative.
Keeping Costs Down
Continuing to provide temporary HST relief for home buyers: Removing the 8% provincial portion of the Harmonized Sales Tax for home buyers of qualifying new homes valued up to $1M. When combined with the federal portion, the total relief is $130,000.
Implementing a monthly consumption cap on the Ontario Electricity Rebate (OER): The monthly cap will be set at 1,200 kWh for residential customers effective May 1, 2027.
Research and Development Support: The government is allowing capital expenditures as eligible expenditures under the Ontario Research and Development Tax Credit and the Ontario Innovation Tax Credit, which provides more than $50 million in tax support for 700 businesses.
Public Services
Digital credentials to modernize government services: Allowing Ontarians the option to access their identification digitally.
Support for Film and Television Sector: Updating the eligibility for the Ontario Computer Animation and Special Effects (OCASE) Tax Credit to film and television producers only.
Strengthening enforcement measures against illegal cannabis activities.
Additional $110M to maintain and renew existing public infrastructure.
Beneficial Ownership Registry: the government is proposing legislative amendments that support the implementation of a Beneficial Ownership Registry (BOR) for privately held corporations.
Fiscal Projections
Ontario’s deficit projection has increased to $16.9 billion, which is up from $13.8 billion as projected in Budget 2026.
The fiscal update further projects that the deficit will fall over the next two fiscal years to a deficit of $12.7 billion in 2027-28 and a deficit of $6.7 billion in 2028 to 2029.
This pushes the projected budget surplus by one year to 2029/2030.
FES 2026 projects Real GDP growth at 0.5% for 2026, rising to 1.5% in 2027 and reaching 2.0% in 2029.
The government has committed to keeping the Net Debt-to-GDP below 40%.
Analysis
Ontario’s 2026 Fall Economic Statement is less a spending blueprint than a continued strategic reaffirmation of the government’s economic posture.
It reinforces Ontario’s “Protect and Build” narrative, with a continued focus on shielding the province from escalating U.S. trade tensions and global supply-chain volatility, rather than introducing new social or fiscal programs. The document extends tariff-related and industry-support measures totaling roughly $30 billion, including the new $8.7 billion Canada-Ontario action plan to strengthen the province’s steel, automotive and critical minerals sectors, while signalling a cautious fiscal stance amid economic headwinds.
New health-care measures are absent from the FES highlights altogether, with existing funding for primary care and hospital operations continuing unchanged from the 2026 Budget allocations. Stakeholders should keep in mind that the provincial government typically announces healthcare reforms within the first three months of each year.
Ontario’s deficit this year sits at 1.3% of GDP versus the federal government’s 2.4%, and it remains the only large province with a path to balance this decade. This timeline is from the Budget 2026 target out to 2029/30. With this noted, Minister Bethlenfalvy is aiming to draw a contrast with the federal government and demonstrate the Ford Government’s approach to being responsible stewards of taxpayer dollars.
The government will spend the coming weeks debating and passing the FES. Stakeholders should keep in mind that the government opted to bypass Committee for the 2026 Budget legislation, and this may occur for the FES legislation. The government will be launching consultations this November to help inform priorities ahead of Budget 2027.
Stakeholders hoping to request funding in the 2027 Budget should treat consultations launching this November as an important opportunity. Funding asks should be tied to their impact on voters and appeal to a government that was elected on “protecting Ontario” against the ongoing trade war with the US and global trade uncertainty.
Reactions from Opposition
NDP’s Reaction
NDP Leader Marit Stiles, Leader of the Official Opposition, criticized the government for not having an adequate plan to protect Ontario’s workers, including small businesses and youth. The Ontario NDP do not see the government going far enough to support Ontario’s critical sectors, including education and healthcare.
Ontario Liberals’ Reaction
OLP MPP Stephanie Bowman, Finance and Treasury Board Critic, stated that Ontarians need housing people can actually afford, relief from the rising cost of living, and a real plan to support Ontarians impacted by tariffs.
Read more
Read the full text of the 2026 Fall Economic Statement, here.
