Ontario’s 2026 fall economic statement projects a return to a balanced budget in 2029-30, as the province continues to deal with U.S. tariffs and global economic uncertainty.
Finance Minister Peter Bethlenfalvy released the 2026 Ontario Economic and Fiscal Review on Thursday. The deficit is projected to be $16.9 billion in 2026-27, $12.7 billion in 2027-28 and $6.7 billion in 2028-29, before the budget returns to balance. Real GDP is projected to grow by 0.5 per cent in 2026 and 1.5 per cent in 2027. The province says net debt-to-GDP will stay below its 40 per cent target throughout the outlook period.
“Ontario continues to face significant economic uncertainty driven by U.S. tariffs on Canada, but our government has a plan to protect workers, businesses and communities while building a stronger economy for the future,” Bethlenfalvy said. “Through responsible fiscal stewardship we are fortifying key provincial industries as we attract the jobs of the future, protecting key public services and ensuring our province remains competitive in an increasingly uncertain global economy.”
The statement highlights measures announced earlier this week. They include the $8-billion Ontario Competitiveness Tax Cut, which the province says would attract at least $11 billion in new capital investment and create 30,000 jobs, and the $8.7-billion Canada-Ontario action plan for the steel, automotive and critical minerals sectors. It also points to the government’s red tape reduction work, including a review of all 375 business-facing permits.
The province says it has announced nearly $30 billion in tariff relief and support for workers and businesses since April 2025. That includes a six-month interest and penalty-free deferral period for select provincially administered taxes that made up to $9 billion in liquidity relief available to about 80,000 businesses.
The statement also proposes restoring capital expenditures as eligible expenses under the Ontario Research and Development Tax Credit and the Ontario Innovation Tax Credit. The province estimates that would provide more than $50 million in additional tax support over three years to about 700 businesses.
It also proposes limiting eligibility for the Ontario Computer Animation and Special Effects Tax Credit to film and television producers only. The province says the change would align with other Canadian jurisdictions and keep the 18 per cent refundable credit for special effects and animation work in Ontario.
The province says it will provide more than $12.5 billion in 2026-27 to help keep costs down for families, including support for housing, education, transit, energy affordability and child care. It also points to a $210-billion capital plan. The government will begin consultations in November to inform the 2027 budget.
