Ontario’s 2025 Fall Economic Statement offers fiscal restraint at a time of deep economic uncertainty. While the federal government’s recent budget leaned heavily on deficit spending and incentives to spur private-sector investment, Ontario’s plan takes a more cautious path—limiting spending commitments and staying focused on a gradual return to balance.
The Fall Economic Statement projects a smaller deficit than previously expected: $13.5 billion for 2025–26, compared to the $14.6 billion forecast in the spring. Deficits are expected to decline to $7.8 billion in 2026–27, followed by a modest surplus of $200 million in 2027–28. Ontario’s net debt-to-GDP ratio is now forecast at 37.7 per cent in 2025–26, slightly lower than the 37.9 per cent projected in the 2025 Ontario Budget.
The forecast for a balanced budget aside, Ontario’s debt continues to grow. The province’s net debt is projected to reach $458.6 billion this year, up from $427 billion in 2024–25. Real GDP growth is expected to slow to 0.8 per cent in 2025, from 1.4 per cent last year, before gradually rising to 1.9 per cent by 2028. Unemployment is forecast to increase to 7.8 per cent this year, reflecting broader weakness in the labour market.
The fiscal plan assumes a relatively stable trade environment—an assumption that remains uncertain given ongoing tariff tensions with the United States. Ontario’s major export sectors, including steel, aluminum, and automotive manufacturing, have been directly affected by U.S. protectionist measures. Any escalation could weigh further on growth and provincial revenues.
Against that backdrop, Finance Minister Peter Bethlenfalvy’s 2025 Fall Economic Statement focuses on maintaining flexibility rather than introducing large-scale programs. The document includes several previously announced measures and a few incremental initiatives aimed at supporting businesses and households. Key measures include:
Tax Competitiveness
Ontario announced plans to develop a multi-year “Tax Action Plan” to enhance the province’s competitiveness. Specific measures were not disclosed, but the government indicated that further details would be provided in the 2026 Budget.
Ontario Together Trade Fund (OTTF)
An additional $100 million will be allocated to the Ontario Together Trade Fund, bringing total program funding to $150 million over three years beginning in 2025–26. The fund supports small and medium-sized businesses affected by U.S. tariffs and global supply chain challenges.
Manufacturing Investment Support
The government confirmed its previously announced temporary increase to the Ontario Made Manufacturing Investment Tax Credit (OMMITC)—raising the rate from 10 per cent to 15 per cent. The statement also proposes to expand access by allowing a 15 per cent non-refundable credit for corporations that are not Canadian-controlled private corporations (CCPCs). To encourage investment, eligibility criteria for machinery and equipment purchases will be broadened.
Protect Ontario Financing Program
Ontario will proceed with the second and third funding streams of the Protect Ontario Financing Program, providing an additional $4 billion to businesses in the steel, aluminum, copper and automotive sectors most affected by U.S. tariff increases.
Housing Affordability
As part of previously announced measures, the province reiterated its plan to rebate the full provincial portion of the HST for first-time home buyers purchasing new or renovated homes valued at less than $1 million. The initiative aims to improve housing affordability for younger Ontarians entering the market.
Health Care and Home Care Expansion
The Fall Economic Statement confirms a previously announced $1.1 billion investment over three years to expand home care services across the province. The funding is intended to ease pressures on hospitals and provide more care in community settings.
A Cautious Fiscal Stance
The government’s decision not to introduce significant new spending reflects a deliberate effort to preserve fiscal capacity amid economic weakness. With limited room to maneuver, Ontario’s approach prioritizes targeted support for trade-exposed industries and gradual progress toward balance.
The statement underscores the province’s intent to manage its debt load carefully, while still supporting competitiveness and manufacturing. However, slower growth, higher borrowing costs, and uncertain trade relations pose ongoing risks to the fiscal outlook.
For now, Ontario’s fiscal plan signals continuity rather than change—a measured response to external pressures and domestic constraints. The 2025 Fall Economic Statement may not include headline-grabbing initiatives, but it reinforces a steady focus on prudence and stability in a volatile economic environment.
The Adams + Miles team
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