What Happened?
The Progressive Conservative government delivered its Fall Economic Statement (FES) on Thursday, months after winning a third consecutive majority on a platform of protecting jobs and diversifying the economy.
Finance Minister Peter Bethlenfalvy—in his fifth year in the post—delivered this FES in decidedly uncertain times. Ontario’s economy is reeling from the Trump administration’s tariffs; the unemployment rate is expected to average 7.8 per cent this year, up from 7.0 per cent last year.
The government projected a provincial deficit of $13.5 billion. GDP is projected to grow by 0.8 per cent this year and 0.9 per cent next year.
The FES was released two days after the federal government tabled its budget, which Bethlenfalvy criticized as “less transformational, more tinkering.” Both Ottawa and Queen’s Park, however, are counting on infrastructure spending to boost economic activity and competitiveness – the Carney government emphasized its $50B local government infrastructure fund, for example, and the FES boosts its 10-year infrastructure spending to just over $200B.
The largest line item in the FES was for targeted support to protect Ontario’s workers in industries hard-hit by the White House, such as autos and steel, with Minister Bethlenfalvy dedicating $30 billion through various programs.
As is generally the case, the FES is meant to provide an update on Ontario’s economic and fiscal position and to address any issues that have emerged since the budget.
Top Line Figures:
- Total Revenues (2024-2025): $223.1 billion, $3.2 billion higher than forecasted.
- Program Expenses (2024-2025): $234.6 billion, (2026-27): $235.3 billion.
- Fiscal Forecast: (2025-2026): Deficit of $13.5 billion, (2026-2027): Deficit of $7.8 billion, (2027-2028): Surplus of $0.2 billion.
Industry and Worker Supports:
- Earlier this year, the government announced over $30 billion in support for workers and businesses impacted by tariffs. The FES notes that this money has been allocated towards:
- $1.3 billion for Ontario Made Manufacturing Investment Tax Credit
- $1 billion in liquidity support through the Protect Ontario Financing Program
- $4 billion Protect Ontario Account
- $600 million to Invest Ontario
- $9 billion for tax deferrals for business
- $2 billion for the Workplace Safety and Insurance Board
- $150 million over three years in the Ontario Together Trade Fund.
- $20 million for investments in Protect Ontario Workers Employment Response Centres.
Infrastructure Investments:
- The Government of Ontario is investing $201 billion over ten years in its capital plan, which includes expanding highways and public transit. Specific funding has been allocated towards:
- Constructing the new Highway 7 to connect Kitchener, Waterloo and Guelph, and expanding Highway 7 to support transport in the Markham and Pickering region.
- Exploring the feasibility of a new vehicle and transit tunnel under Highway 401.
- Advancing the planning of GO 2.0 to deliver two-way, all-day service to Kitchener and Milton, and plan new stations to respond to network demand.
- $5 billion for the Building Ontario Fund
- $500 million for the Critical Minerals Processing Fund
- $3 billion for tripling the Indigenous Opportunities Financing Program
- $1.7 billion allocated towards cutting the gas tax.
- $200 million Shipbuilders Grant Program.
- Permanently removing tolls from the provincially-owned Highway 407 East.
Housing:
- $470 million over three years towards rebating the provincial portion of the HST for first-time home buyers of most new homes. This would eliminate the entire 8 percent provincial portion of the HST for first-time home buyers on qualifying new homes valued at up to $1 million.
Health and Education:
- $1.1 billion over three years to extend home care services and the Hospital to Home (H2H) program.
- Investing ~$56 billion over 10 years in health infrastructure to support over 50 hospital projects and deliver about 3,000 new hospital beds.
- Investing $262 million in the Ontario Learn and Stay Grant to increase the number of nurses, paramedics, and medical laboratory technologists in underserved and growing communities.
Miscellaneous Items:
- Investing $30 billion over 10 years to build new and redeveloped schools and child care spaces.
- Removing the province’s requirements to establish greenhouse gas reduction targets, create a climate plan and report progress to the public.
Opposition Reaction:
The NDP referred to the FES as a “Jobs Disaster” and added that it fails to deliver for working people.”
The Liberal Party—which is in the midst of a leadership race—were similarly critical. Speaking on behalf of the party, MPP Stephanie Bowman said that “everything to do with jobs and how this government spends taxpayer money is getting worse.”
What’s Next?
The FES will move quickly through the legislature, given the Ford government’s commanding majority. The FES also marks the unofficial kick-off to the pre-budget consultation period.
Ontario’s Legislative Assembly is scheduled to sit until December 11 and then return from the Holiday break on February 17.
To learn more about Ontario’s Fall Economic Statement or how to influence the implementation of initiatives announced in the document, contact us at info@mcmillanvantage.com.
