Every year, the actual book containing the provincial government’s budget plan is given a title. In 2019, the new PC government unveiled a plan full of cuts justified by the alleged misspending of their Liberal predecessors and called it Protecting What Matters Most. In fall 2020, the first post-lockdown budget was titled Protect, Support, Recover. In 2025, the government’s response to the election of U.S. President Donald Trump was titled A Plan to Protect Ontario.
And 2026? The title of this year’s budget, introduced Thursday afternoon by Finance Minister Peter Bethlenfalvy, is… A Plan to Protect Ontario. Call it the Ctrl-C, Ctrl-V budget.
There’s a lot in the budget, but very little of it is actually novel (this government is still, in 2026, boasting about cancelling the cap-and-trade system they inherited from the Liberals). Of the new stuff, the vast majority describes bad economic and fiscal news.
The Tories, re-elected after last year’s early election and now looking at a political runway out to at least 2029, have put off any urgency in tackling the budget deficit. The deficit for this year was supposed to be $7.8 billion; it will now be $13.8 billion. That deficit will shrink to $6.1 billion next fiscal year (Ontario had been projecting a razor-thin surplus), and the province’s books might finally balance in 2028-29. If so, it will be the first balanced budget the Tories will table since their election. Meanwhile, interest on the province’s debt is above projections — and this budget projects a rebound in the housing market, despite paltry evidence for optimism.
Insofar as there’s a headline-grabbing item in the budget that wasn’t announced previously, like the HST cut for new homes, it’s the creation of a new provincial agency to guide billions of dollars in investment to future-facing industries. The Protect Ontario Account Investment Fund will be given $4 billion in public money in an initial investment and work to lure in other private funds to invest in resiliency, advanced industries, and emerging technologies. Ontario would then see direct returns on its investment that could be reinvested in turn. Even this, however, isn’t entirely new: it’s the remaining $4 billion from a $5 billion fund announced last year.
Given how prominent Donald Trump’s tariffs have been in Doug Ford’s public communications, the relative scarcity of new measures to protect Ontario businesses is noteworthy. The government is proposing to reduce the small business corporate income tax rate, but it would fall 3.2 per cent to 2.2 per cent; it’s hard to imagine that small difference will protect a massive number of jobs or businesses.
Meanwhile, other measures are being phased out. During COVID-19, the province implemented a tax credit to encourage business investments outside of the Greater Golden Horseshoe, reflecting the concern at the time that the broader GTA had seen the lion’s share of economic growth in the prior decade. That tax credit, the Regional Opportunities Investment Tax Credit, will now expire at the end of this year.
From the government’s perspective, this reflects some relative good news: the impact of tariffs on the Canadian economy, while negative, hasn’t been as catastrophic as initially feared, and Queen’s Park now has some room to think more holistically about the supports it’s offering to affected businesses, instead of the house-on-fire response from earlier last year.
That’s the good news, but bad news abounds. The most obvious example is the price of oil: the economic forecasts underpinning the budget assume a per-barrel cost of West Texas Intermediate in the $60 range; this morning, that price is above $90 and, if the closure of the Strait of Hormuz continues, that could easily exceed $100 or $150. Oil shocks are immediately bad for the economy because they suck away consumer spending from other areas; if they persist for years, Ontario could see a repeat of the 2010s, when Ontario’s economy saw massive job losses in resource and manufacturing sectors.
Then there’s the unanswered question that’s behind the title of the budget: what will happen with U.S.-Canada trade relations this year? The successor to NAFTA is supposed to be renegotiated this year, and both business and policymakers north of the border are holding their breath while we discover which way the White House will go. Will the agreement be renewed easily? Doubtful. Will Canada be required to accept some kind of pain in exchange for keeping the border mostly open? Maybe. Will the U.S. simply exit the deal altogether to create more opportunity to punish Canadian business? Certainly not impossible. But all of this is difficult-to-impossible for ministry of finance bureaucrats to model in any responsible way. How do you put “Donald Trump gets angry at something he saw on Fox News” in a spreadsheet?
The Ford government faces genuinely unenviable prospects in the coming year and legitimately hard choices. There are still real questions about what hardship the province is preparing for and how it will address it. The budget presented this afternoon largely leaves those questions for the future to answer.