Yesterday, Ontario Finance Minister Peter Bethlenfalvy tabled the Government of Ontario’s budget, titled A Plan to Protect Ontario, in the Legislative Assembly. The budget focuses on addressing economic challenges facing the province, particularly those arising from the ongoing trade war with the United States. Approximately $30 billion in tariff relief measures are included in the 2025 budget.

The budget furthers the government’s goal to improve the province’s competitiveness and resilience with enhanced supports for workers and Ontario businesses, while investing in new infrastructure projects, technology and key industries.

Fiscal outlook

In 2025–26, the government is projecting a deficit of $14.6 billion, improving to a deficit of $7.8 billion in 2026–27, before turning to a modest surplus of $200 million in 2027–28.

The government’s plan to address the current deficit is focused on investments to support affordability, critical public services such as health care, education, and infrastructure. Additionally, the government intends to implement a package of measures to support growth and resilience in the Ontario economy in response to the U.S. tariffs.

Key measures

  • Supports for workers and businesses

    • In response to U.S. tariffs and rising economic uncertainty, the Ontario government proposed a comprehensive support package to protect workers, businesses, and communities. A major component includes a deferral of select provincially administered business taxes, offering up to $9 billion in cash flow support to around 80,000 businesses. This measure, in effect from April to October 2025, allows businesses to delay payments without interest or penalties.

    To further support employers, Budget 2025 proposes a reduction in Workplace Safety and Insurance Board (WSIB) premium rates, projected to save businesses approximately $150 million annually.

    The government also announced measures to launch the Protecting Ontario Account (POA), a fund of up to $5 billion designed to assist businesses with tariff-related liquidity challenges. In coordination with federal measures, $1 billion would be distributed as immediate liquidity relief. The fund would provide $4 billion in future relief, reserved for longer-term support.

    For workers affected by layoffs, the budget includes supports of $20 million in 2025–26 to establish new training and support centres, which will offer job search assistance, upskilling opportunities, and access to employment services. At the community level, the new Trade-Impacted Communities Program (TICP) would provide $40 million in flexible grants starting in fiscal year 2025-26.

    Additional support measures include a temporary increase in the LCBO wholesale discount rate from 10% to 15%. This measure is intended to stimulate business in the alcohol sector, to the benefit of retailers and the LCBO. LCBO revenues have slumped and are projected to continue declining, due in part to the impacts of retaliatory tariffs against U.S. products, including alcohol.

    The government is also proposing supports for Ontario’s auto and electric vehicle sectors through an $85 million investment in innovation and modernization programs. Measures include extended investment in the Ontario Automotive Modernization Program (O-AMP) and the Ontario Vehicle Innovation Network (OVIN). These initiatives aim to secure jobs, attract investment and ensure long-term economic resilience amid trade challenges.

  • Competition, resilience, and self-reliance

    • To boost competitiveness, the government aims to enhance and expand the Ontario Made Manufacturing Investment Tax Credit (OMMITC) by providing an additional $1.4 billion in tax support for manufacturing businesses by 2027-28, including both Canadian–and non-Canadian–controlled corporations on a temporary basis.

    The government is hoping to attract investment through Invest Ontario with an additional $600 million allocated to the Invest Ontario Fund in Budget 2025.

    The budget proposes collaborative efforts with partners like the Ontario Securities Commission (OSC) and the Canadian Investment Regulatory Organization (CIRO). Initiatives include easing requirements for public companies, promoting long-term investment opportunities for retail investors, and enabling credit unions to raise capital from non-members.

    The government is also strengthening market integrity by addressing short selling and enhancing enforcement tools. To support workers, Budget 2025 proposes total investments of $2.5 billion into the Skills Development Fund (SDF) over three years, including new training facilities and programs to help workers transition to in-demand jobs, especially in response to U.S. tariffs. Additionally, Ontario is boosting investments in skilled trades, STEM education, and post-secondary institutions, particularly in Northern and rural areas, to ensure a strong and diverse workforce for the province’s future economic growth.

  • Minerals sector

    • Part of the government’s economic strategy focuses on unlocking the potential of Ontario’s critical minerals sector. Budget measures include investments in infrastructure and partnerships to develop the Ring of Fire region, including all-season roads and broadband connectivity for First Nations communities. Budget 2025 includes the launch of a $500 million Critical Minerals Processing Fund to ensure that minerals mined in Ontario are also refined and processed within the province.

    Through the Critical Minerals Innovation Fund (CMIF), the government proposes to support research and development of new technologies in exploration, production, and processing. This includes an additional $5 million investment starting in 2025-26.

    The government is replacing its Aboriginal Loan Guarantee Program with an Indigenous Opportunities Financing Program and is expanding investments in the Indigenous Participation Fund. A $10 million scholarship fund is also proposed, to support First Nation students pursuing careers in resource development.

  • Energy infrastructure

    • Budget 2025 proposes a multi-faceted energy strategy focused on nuclear, hydroelectric, hydrogen and energy efficiency. The province is advancing four small modular reactors (SMRs), exploring large-scale nuclear expansion, and refurbishing existing nuclear facilities, including Darlington, Bruce, and Pickering. The budget includes investments of $4.7 billion to expand hydroelectric capacity and support the Ontario Pumped Storage Project, which would provide significant electricity storage. Additionally, proposed investment would include support for pilot projects and a $30 million Hydrogen Innovation Fund.

  • Artificial Intelligence (AI)

    • The budget proposes initiatives such as the $107 million Critical Technologies Initiative and significant funding for Advanced Research Computing. Additionally, the province is focusing on attracting AI talent, supported by expanding postsecondary programs.

  • Agri-food

    • To strengthen the agri-food sector, the government introduced the “Grow Ontario” strategy, focusing on improving agri-food supply chains, attracting talent, and supporting innovative technologies. A significant part of this effort is the Ontario Risk Management Program (RMP), which helps farmers manage market instability, with funding set to increase from $150 million to $250 million over three years. The province is also investing in the grape and wine industry, introducing programs like the Ontario Grape Support Program, which will provide a total of $175 million in funding by 2029-30 to increase the use of Ontario grapes in wine production. Additionally, the government is enhancing the VQA Wine Support Program and launching the Wine Boutique Support Program to foster growth and innovation in Ontario’s wine sector, ensuring it remains competitive and continues to thrive.

  • Cannabis

    • The government is enhancing its support for the local cannabis industry by introducing an Ontario Grown Cannabis badge, which will help consumers and retailers easily identify products with at least 75% of their inputs sourced from Ontario. This badge will be available starting in summer 2025 through the Ontario Cannabis Store (OCS). Additionally, changes are being made to cannabis retail store regulations to improve outside visibility, creating a safer and more welcoming environment for customers while ensuring protection from youth exposure. The government also supports the federal proposal to transition to a single national cannabis excise duty stamp, which would ease the process for producers, particularly smaller ones, to distribute products across Canada. These initiatives aim to bolster Ontario’s legal cannabis sector, enhance its competitiveness, and help displace the illegal market.

  • Infrastructure

    • The government put forward an infrastructure plan worth over $200 billion to combat economic uncertainty, particularly from U.S. tariffs, and accelerate the construction of vital projects. This initiative aims to quickly break ground on highways, transit systems, and community infrastructure to keep the economy moving. Key projects include the early works for Highway 413, the Bradford Bypass as well as a tunnelled expressway under Highway 401. Additionally, the use of digital twins’ technology is being explored to enhance the efficiency and cost-effectiveness of infrastructure projects.

    To support housing development, the government proposes investing in municipal infrastructure, with a special focus on water systems and roads that are essential for enabling new homes. This includes an additional $400 million in funding for the Municipal Housing Infrastructure Program (MHIP) and the Housing-Enabling Water Systems Fund (HEWSF), alongside nearly $2 billion in ongoing investments. Ontario is also promoting modular construction as a fast and cost-effective solution to address the housing affordability crisis.

    Ontario's broader infrastructure development includes major projects aimed at transportation efficiency. These projects include enhancing its electric vehicle (EV) charging infrastructure through a $92 million investment in the ChargeON program, and short line railways with a new tax credit to improve rail services.

  • Public safety

    • Public safety measures in Budget 2025 include efforts to enhance border security, fight organized crime, and support law enforcement. The government has committed $113 million over three years to support border enforcement and police efforts. Additionally, the expansion of air support with new helicopters and investments in police training and resources are intended to ensure that law enforcement is well-equipped. The government proposes investments in crime-fighting programs, including the Preventing Auto Theft Grant, which provides $6 million to support police services.

  • Community health and safety

    • The government is also focusing on community health and safety by expanding mental health and addiction services, particularly for vulnerable populations. The creation of Homelessness and Addiction Recovery Treatment (HART) Hubs is part of a larger strategy to assist people in transitioning from encampments to stable housing. The government proposes investments of over $500 million in these hubs, alongside other measures like the Anti-Hate Security and Prevention Grant, aimed at safeguarding faith-based and cultural organizations. Budget 2025 includes additional investments in jail capacity and law enforcement support, as well as tackling contraband tobacco and money laundering.

  • Investments in health and education

    • As part of its Primary Care Action Plan, the government is committing $1.8 billion to connect all residents to family doctors or primary care teams by 2029, including the creation of over 305 new primary care teams. Additionally, the government is expanding Primary Care Teaching Clinics with up to $300 million over four years to train more health care professionals while improving access to primary care.

    To address the province’s health care workforce needs, Budget 2025 proposed investments in the Ontario Learn and Stay Grant, which supports students pursuing health-related programs in underserved areas. The initiative has provided over $90 million to more than 8,000 students since its launch and is expanding further to include medical school students. The government also proposes investing $159.6 million over three years to support the retention of Ontario-trained doctors, particularly in family medicine, by offering financial incentives for those who work in underserved communities.

    Budget 2025 also includes support measures for hospitals, including $1.1 billion in investments for hospitals in 2025–26, with a focus on enhancing surgical services and reducing waitlists. Additionally, $56 billion is allocated over the next decade to build and modernize hospitals.

    In the long-term care sector, the government proposed investments in training programs for more nurses, expanding enrollment in nursing colleges by 2,200 spaces over the next three years. Further support includes a $3 million commitment to improve services for senior veterans and an increase in funding for active living programs for seniors. Finally, the budget includes measures to enhance care and housing for individuals with disabilities, including the Ontario Autism Program, with a $175 million increase in 2025–26 to improve services for children and youth with autism.

    Regarding education, Budget 2025 includes over $30 billion in the next 10 years for new schools and childcare spaces, $2 billion annually for school repairs, and $4.2 billion in 2025–26 for school infrastructure. An amount of $750 million has been allocated over five years to publicly assisted colleges and universities to support 20,500 student seats in STEM (Science, Technology, Engineering, Mathematics) programs annually, $75 million for construction-related programs, and $56.8 million for nursing education expansion.

Opposition reaction

Opposition leaders criticized the budget for failing to adequately support struggling residents.

Ontario NDP leader Marit Stiles described it as a “band-aid,” offering little reassurance to workers facing job insecurity or feeling overwhelmed.

Ontario Liberal Leader Bonnie Crombie said the budget was a “painful reminder” that the government has its priorities wrong: “I’m frustrated watching yet again this Premier care more about alcohol, which is mentioned more than 100 times in the budget, than health care.”

Ontario Green Party Leader Mike Schreiner argued that the government's past spending choices, such as sending $200 cheques to every Ontarian before the last election, have undermined its fiscal capacity to respond effectively to issues like tariffs.

Conclusion

Ontario’s Budget 2025 outlines a strategic response to growing economic pressures, particularly those stemming from the United States. Outlining the government's priorities, fiscal positioning and response to current economic challenges, the budget sets an important benchmark for stimulating the Ontario economy, supporting infrastructure, technology, health care and job creation.