2025 Ontario Budget: A Plan to Protect Ontario

The Honourable Peter Bethlenfalvy, Minister of Finance

Table of Contents

Minister’s Foreword

• A Plan to Protect Ontario
• Helping Workers and Businesses Weather the Storm
• Unleashing Our Economy
• Building Ontario
• Keeping Costs Down
• Cleaning Up Our Streets
• Delivering Better Services
• Ready to Protect Ontario

Ontario’s Economic and Fiscal Outlook in Brief

• Ontario’s Economic and Fiscal Outlook in Brief
• Ontario’s Economic Outlook
  • Revisions to the Economic Outlook Since the 2024 Budget
• A Strong Foundation for the Next Generation
• Ontario’s Fiscal Plan
  • Revenue Outlook Over the Medium Term
  • Program Expense Outlook Over the Medium Term
  • Interest and Other Debt Servicing Charges Outlook Over the Medium Term
  • Other Fiscal Plan Assumptions
  • Economic and Fiscal Outlook Scenarios
• Borrowing and Debt Management
• A Capital Plan for a Stronger Ontario

Chapter 1: A Plan to Protect Ontario

Section A: Helping Workers and Businesses Weather the Storm

• Immediate Supports for Tariff-Impacted Workers and Businesses
  • Taking Steps to Protect Workers Amid Economic Uncertainty
  • Strengthening and Growing Ontario’s Economy Through Strategic Investments
  • Supporting Laid-Off Workers
  • Protecting Communities from Tariffs and Trade Disruptions
  • Lowering Costs for Businesses Selling Alcohol
  • Standing By Ontario’s Investments in the Auto and Electric Vehicle Battery Sector

Section B: Protect Ontario

Building a More Competitive, Resilient and Self-Reliant Economy

• Taking Action to Protect Manufacturing Jobs and Attract Investment
• Unleashing the Economic Potential of Critical Minerals
• Expanding Trade Opportunities for Ontario’s Exporters
• Powering Ontario’s Affordable Future
• Keeping Costs Down for Businesses
• Continuing to Diversify Ontario’s Economy
• Supporting Ontario’s Forest Sector
• Strengthening Ontario’s Agri-Food Sector
• Strengthening Ontario’s Tourism Sector
• Growing Ontario’s Northern and Rural Economies
• Helping Entrepreneurs Start and Grow Their Businesses
• Increasing Competition and Capital Formation
• Protecting Workers
• Expanding Ontario’s Teaching Workforce
• Empowering Black Youth and Young Professionals
• Creating More Pension Options for Workers

Building Ontario

• Building Faster
• Building Stronger Communities
• Building Highways
• Improving Municipal Roads
• Building Transit

Cleaning Up Our Streets

• Protecting Ontario’s Borders
• Fighting Crime with the Expanded Joint Air Support Unit
• Combatting and Preventing Auto Theft
• Fighting Guns, Gangs and Violence
• Putting More Repeat Violent Offenders Behind Bars
• Getting Tough on Crime to Protect Communities from Criminals
• Training More Police Officers to Protect Communities
• Supporting Policing Services in First Nation Communities
• Building More Capacity in Provincial Jails
• Strengthening Supports to Combat Hate
• Supporting Human Trafficking Survivors to Rebuild Their Lives
• Restoring Safety to Parks and Public Spaces
• Expanding Homelessness Hubs and Addiction Recovery Treatment Hubs
• Fighting Money Laundering
• Addressing Contraband Tobacco

Keeping Costs Down

• Delivering the $200 Ontario Taxpayer Rebate
• Permanently Reducing Gasoline Tax and Fuel Tax Rates
• Removing Highway 407 East Tolls
• Preventing New Charges and Streamlining Collection Efforts Against Drivers
• Providing Affordable and Convenient Transit Through the One Fare Program
• Saving on Electricity Costs
• Supporting Affordable Rental Housing
• Supporting Families and Individuals

Delivering Better Services

• Advancing Ontario’s Primary Care Action Plan
• Training and Retaining Health Care Providers Across Ontario
• Investing in Hospitals
• Investing in New Surgical and Diagnosis Centre Capacity
• Building and Expanding Hospitals
• Building Long-Term Care Homes
• Introducing the Ontario Fertility Treatment Tax Credit
• Supporting Seniors and Senior Veterans
• Helping Individuals with Disabilities and Complex Needs Access Care and Supportive Housing
• Building Schools and Child Care Spaces
• Modern Alcohol Marketplace: Taxes, Mark-Ups and Fees on Alcoholic Beverages
• Consulting on Preferred Provider Networks in Ontario’s Employer-Sponsored Drug Program Sector
• Protecting Consumers in the Life and Health Insurance Sector
• Providing Greater Choice and Convenience to Consumers When Buying Auto Insurance

Chapter 2: Economic Performance and Outlook

• Introduction
  • Revisions to the Outlook Since the 2024 Budget
• Recent Economic Performance
  • Real GDP Growth
  • Consumer Price Inflation
  • Consumer and Business Confidence
• Economic Outlook
  • Global Economic Environment
  • Financial Markets and Other External Factors
  • Details of Ontario’s Economic Outlook
  • Employment
  • Household Spending
  • Consumer Price Index
  • Housing Market
  • Risks to the Outlook
  • Potential Impact of U.S. Tariffs on Ontario’s Economy
  • Transparent Reporting on the Economy

Chapter 3: Ontario’s Fiscal Plan and Outlook

• Introduction
• 2024–25 Interim Fiscal Performance
  • Revenue Update
  • Expense Update
  • Prudence in 2024–25
• Medium-Term Fiscal Plan
  • Medium-Term Revenue Outlook
  • Medium-Term Expense Outlook
  • Prudence Built into the Medium-Term Outlook
• Leadership in the Federation and Standing Up for the People of Ontario
• Transparency and Risks
• Summary of Significant Accounting Policies
• Details of Ontario’s Finances

Chapter 4: Borrowing and Debt Management

• Introduction
  • Changes to Debt Burden Reduction Strategy Ratios
• Borrowing Program
• Sustainable Bond Framework
• Cost of Debt
  • Term of Debt
• Ensuring Adequate Liquidity Levels
• Debt Burden Reduction Strategy
• Consolidated Financial Tables

Annex: Details of Tax Measures and Other Legislative Initiatives

• Overview
• Enhancing and Expanding the Ontario Made Manufacturing Investment Tax Credit
  • Enhancement of the OMMITC
  • Expansion of the OMMITC
  • Enhancing the Integrity and Effectiveness of the OMMITC
  • Reviewing the Effectiveness of the Ontario Made Manufacturing Investment Tax Credit
• Introducing the Ontario Shortline Railway Investment Tax Credit
  • Qualifying Corporations
  • Eligible Investments
• Permanently Reducing Gasoline Tax and Fuel Tax Rates
• Eliminating the Tax on Propane for Use in Licensed Road Vehicles
• Proposing an Ontario Fertility Treatment Tax Credit
• Enhancing Access to Property Assessment Information
• Delivering Simpler, More Digital Tax Services for Business
• Supporting the Federal Harmonized Sales Tax Holiday
• Implementing Changes to Alcohol Taxes, Mark-Ups and Fees
  • Cutting the Spirits Basic Tax Rate
  • Cutting the Basic Tax and Liquor Control Board of Ontario Mark‑Up Rates for Beer Made by Microbrewers
  • Increasing Flexibility and Certainty for Microbrewers
  • Enhancing the Small Beer Manufacturers’ Tax Credit
  • Cutting the Liquor Control Board of Ontario Mark-Up Rate for Cider
  • Cutting the Liquor Control Board of Ontario Mark-Up Rates for Spirit- and Wine-Based Ready-to-Drink Beverages
  • Creating an Alcohol Refreshment Beverage Category
• Summary of Measures
• Technical Amendments
  • Other Legislative Initiatives

List of Tables

Ontario’s Economic and Fiscal Outlook in Brief

• Summary of Ontario’s Economic Outlook
• Changes in the Ontario Ministry of Finance Key Economic Forecast Assumptions: 2024 Budget Compared to the 2025 Budget
• Details of Ontario’s Fiscal Plan
• Ontario Real GDP Growth Scenarios
• Ontario Nominal GDP Growth Scenarios
• Ontario’s Taxation Revenue Scenarios
• 2024–25 Borrowing Program and Medium-Term Outlook
• Progress on Relevant Debt Sustainability Measures
• Infrastructure Expenditures

Chapter 1: A Plan to Protect Ontario

• Table 1.1 Recently Completed Highway Projects
• Table 1.2 School Projects Opening for the 2025–26 School Year
• Table 1.3 Continuing to Get Shovels in the Ground to Build More Schools

Chapter 2: Economic Performance and Outlook

• Table 2.1 Summary of Ontario’s Economic Outlook
• Table 2.2 Changes in the Ontario Ministry of Finance Key Economic Forecast Assumptions: 2024 Budget Compared to the 2025 Budget
• Table 2.3 Private-Sector Forecasts for Ontario Real GDP Growth
• Table 2.4 Private-Sector Forecasts for Ontario Nominal GDP Growth
• Table 2.5 External Factors
• Table 2.6 Ontario’s Economic Outlook
• Table 2.7 Impact of Sustained Changes in Key External Factors on Real GDP Growth
• Table 2.8 Ontario Real GDP Growth Scenarios
• Table 2.9 Ontario Nominal GDP Growth Scenarios
• Table 2.10 Ontario Economic Accounts Release Dates

Chapter 3: Ontario’s Fiscal Plan and Outlook

• Table 3.1 Fiscal Summary
• Table 3.2 2024–25 In-Year Fiscal Performance
• Table 3.3 Summary of 2024–25 Revenue Changes Since the 2024 Budget
• Table 3.4 Summary of 2024–25 Expense Changes Since the 2024 Budget
• Table 3.5 Summary of Medium-Term Revenue Outlook
• Table 3.6 Selected Economic and Revenue Sensitivities
• Table 3.7 Summary of Medium-Term Expense Outlook
• Table 3.8 Selected Expense Sensitivities
• Table 3.9 Total Revenue
• Table 3.10 Total Expense
• Table 3.11 Infrastructure Expenditures
• Table 3.12 10-Year Review of Selected Financial and Economic Statistics

Chapter 4: Borrowing and Debt Management

• Table 4.1 2024–25 Borrowing Program and Medium-Term Outlook
• Table 4.2 Comparison of Interest and Other Debt Servicing Charges (IOD) Expense Forecast
• Table 4.3 Progress on Relevant Debt Sustainability Measures
• Table 4.4 Net Debt and Accumulated Deficit
• Table 4.5 Medium-Term Outlook: Net Debt and Accumulated Deficit

Annex: Details of Tax Measures and Other Legislative Initiatives

• Table A.1 Summary of Measures

List of Charts

Ontario’s Economic and Fiscal Outlook in Brief

• Current Fiscal Outlook Compared to the 2024 Budget
• Ontario Fiscal Outlook Scenarios

Chapter 1: A Plan to Protect Ontario

• Chart 1.1 Share of Total Employment Associated with Exports to the United States, by Goods-Producing Industry
• Chart 1.2 Supporting Ontario Businesses
• Chart 1.3 Skills Development Fund Capital Stream Recipients
• Chart 1.4 Highway 413 Project Route
• Chart 1.5 Bradford Bypass Project Route
• Chart 1.6 Building Transit in the Greater Golden Horseshoe
• Chart 1.7 Select Measures That Provide Relief to Families and Individuals
• Chart 1.8 Illustration of Proposed Ontario Fertility Treatment Tax Credit

Chapter 2: Economic Performance and Outlook

• Chart 2.1 Ontario’s Employment Growth
• Chart 2.2 Ontario’s Real GDP Continued to Grow in 2024
• Chart 2.3 Inflation Moderated in 2024
• Chart 2.4 Tariffs Are Impacting Confidence
• Chart 2.5 Tariffs Weighing on Ontario Real GDP Growth Outlook
• Chart 2.6 High Range of Private-Sector Forecast Uncertainty
• Chart 2.7 Heightened Global Economic Policy Uncertainty
• Chart 2.8 Global Real GDP Growth Projections
• Chart 2.9 Bank of Canada Policy Rates Are More Supportive
• Chart 2.10 Canadian Dollar Has Come Under Pressure
• Chart 2.11 Equity Markets Have Been Sensitive to Tariff Announcements
• Chart 2.12 Employment Gains Projected to Slow
• Chart 2.13 Household Spending Projected to Moderate
• Chart 2.14 Inflation Projected to Ease
• Chart 2.15 Home Resales Expected to Rise
• Chart 2.16 United States Is Ontario’s Top Merchandise Trading Partner
• Chart 2.17 U.S.–Ontario Trade Concentrated in Autos and Consumer Goods
• Chart 2.18 Range of Ontario GDP Scenario Forecasts

Chapter 3: Ontario’s Fiscal Plan and Outlook

• Chart 3.1 Current Fiscal Outlook Compared to the 2024 Budget
• Chart 3.2 Composition of Total Revenue, 2025–26
• Chart 3.3 Composition of Total Expense, 2025–26

Chapter 4: Borrowing and Debt Management

• Chart 4.1 Borrowing Outlook Scenarios for Long-Term Borrowing
• Chart 4.2 2024–25 Borrowing
• Chart 4.3 Domestic and International Borrowing
• Chart 4.4 Green Bond Allocation by Framework Category
• Chart 4.5 Ontario’s Green Bond Issues
• Chart 4.6 Effective Interest Rate (Weighted Average) on Total Debt
• Chart 4.7 Average Annual Ontario Borrowing Rate Forecast
• Chart 4.8 Weighted-Average Term of Borrowings
• Chart 4.9 Average Unrestricted Liquid Reserve Levels
• Chart 4.10 Net Debt-to-GDP
• Chart 4.11 Net Debt-to-Operating Revenue (formerly Net Debt-to-Revenue)
• Chart 4.12 Net Interest-to-Operating Revenue (formerly Interest on Debt-to-Revenue)