The 2025 Ontario budget will be delivered by Finance Minister Peter Bethlenfalvy on Thursday — later than usual, thanks to the recent provincial and federal elections. That delay only adds to the anticipation. With global economic uncertainty mounting, and a fresh slate of provincial campaign promises to deliver, this year’s budget carries extraordinary weight.
At minimum, the budget needs to do three things: offer a credible economic response to a fast-evolving trade crisis; explain how key election commitments will be turned into policy; and finally, pull back the curtain on a set of provincial finances that haven’t been updated in over half a year.
The backdrop is not an easy one. The Trump-triggered trade war is gathering speed, and Ontario’s economy is heavily exposed.
It doesn’t help that Ontario’s economy wasn’t exactly roaring. Interest rates have held growth in check. Per capita GDP has been sliding. The job market is producing more work, but population growth is creating even more job seekers. Wages, on average, are catching up to inflation. But only just.
In short, the economy is growing on paper, but for many Ontario families, it doesn’t feel like it is, and for some, it’s clearly getting worse.
Frustratingly, 2025 had looked like the year things would turn around. Inflation was easing and interest rates were coming down. Fourth-quarter GDP figures from 2024 showed signs of firmer growth, and 2025 was shaping up to be a year of strengthening growth. That is, until a Donald Trump-sized thundercloud rolled in and soaked the rebound. Now it’s all hands scrambling for cover, hoping not to get drenched.
The Ford government has already rolled out an initial response: an $11 billion package including deferred tax payments, a WSIB rebate for employers, and a billion-dollar boost to the skills fund. These are reasonable first steps echoing elements of the pandemic-era response. Whether more is coming will depend, in part, on what Ottawa does next. That’s because trade and foreign policy fall under federal jurisdiction. Also, as during COVID-19, a coordinated response — federally funded and delivered, with provincial support where needed — may be the best path forward for the country. In the meantime, Ontario may be wise to earmark contingency funds and stay nimble.
Beyond crisis management, this government has a consistent economic playbook: build infrastructure, support skilled trades, and reduce costs for employers and families. The recent enhancement to the Ontario Made Manufacturing Tax Credit fits this pattern. We may see more in that vein—or we may see the government keep its powder dry.
One area to watch will be interprovincial trade. Premier Ford continues to tout stronger internal trade ties as a path to long-term growth. That’s a reasonable focus — even if the economic payoff is often overstated. Internal trade reforms can boost GDP and employment, but the gains tend to be modest and gradual, not transformative. They’re also notoriously hard to implement, given the political and regulatory complexity between provinces. In today’s uncertain global environment, a stronger pan-Canadian economic partnership isn’t just sensible — it’s strategic. Ontario has the scale and influence to lead on this issue, and Premier Ford is certainly following through.
Other budget storylines to watch include:
Housing: The government’s ambitious goal of 1.5 million new homes by 2031 hasn’t been front and centre lately, but housing remains a top concern. The budget may or may not revisit the pledge directly, but the issue isn’t being ignored. This week the province introduced new legislation and $400 million in additional funding aimed at speeding up housing construction and cutting red tape. Whether it will move the dial on affordability remains to be seen, but it’s clear the government wants to show it's acting.
Health care: Spending continues to rise, yet access issues persist. More dollars may be coming, but delivery and results are what matter.
Infrastructure: A perennial Ford government priority. Expect another funding boost. Do not expect some realism around limited labour and construction capacity to build more than what is already in the plan. Also, watch for details on the new Building Ontario Fund and whether any funds are being allocated towards the Highway 401 tunnel proposal.
Mining and critical minerals: There has been a flurry of announcements and regulatory changes. Budget would be a good time to report on the results. For example, how is the Ring of Fire project coming along?
Missing priorities: post-secondary education, climate change prevention and adaptation, and poverty reduction are unlikely to feature prominently in the budget, though growing pressures in all three areas make their continued absence from the province’s policy priorities increasingly conspicuous.
Perhaps the most revealing — and certainly overdue — element of the budget will be the financial update. The last official snapshot of Ontario’s finances came in the fall economic statement more than six months ago. The usual third quarter update on 2024-25 in February and a budget deadline of March 31 were shelved due to the snap election call. Because of the off-cycle election timing the Auditor General’s mandated pre-election review of the province’s books did not happen. The Financial Accountability Office has not provided any fiscal projections recently. That silence has left an unusual and troubling gap in public financial transparency.
So, what should we expect in the fiscal update? Red ink. Probably lots of it.
Last fall, the province reported having been within a whisker of a balanced budget in 2023-24. The projected 2024–25 deficit stood at $6.6 billion, a $3.2 billion improvement from the spring 2024 budget. A return to balance in 2025–26 looked attainable, and there was a plan to deliver balanced books in 2026-27.
But that was then, before an election campaign with a commitment of $40 billion in new investments, plus the potential for further economic response spending. Meanwhile, weaker growth will erode revenue projections. Premier Ford has already set expectations for a return to deficit territory. The questions now are: how big, and for how long?
Ontario enters this period with more financial credibility than it had a few years ago, thanks to a couple of recent credit rating upgrades. A moderate deficit (paired with a credible plan to return to balance) would be easily defensible. The premier has promised to eliminate the deficit “in the next few years,” which, if realized, could keep the debt build-up within reasonable bounds. But credibility isn’t a given; it has to be maintained. Budget 2025 needs to show a clear path forward.
So, what kind of budget will this be? Likely part emergency response, part holding pattern. An attempt to steady the ship while waiting for more information from Ottawa and Washington. Expect a sobering fiscal update, a few new policy measures, and a reaffirmation of familiar priorities. Budget 2025 may not deliver fireworks. But in this stormy climate, simply avoiding a downpour might count as a win.