2025 Ontario Economic Outlook and Fiscal Review: A Plan to Protect Ontario

The Honourable Peter Bethlenfalvy, Minister of Finance

Table of Contents

Minister’s Foreword

• A Plan to Protect Ontario
• Protecting Workers and Businesses
• Protect Ontario by Unleashing Our Economy
• Protect Ontario by Building
• Protect Ontario by Keeping Costs Down
• Continuing 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 Outlook Since the 2025 Budget
• Managing Ontario’s Finances Responsibly
• Ontario’s Fiscal Plan
  • Revenue Outlook Over the Medium Term
  • Program Expense Outlook Over the Medium Term
  • Interest and Other Debt Servicing Charges (IOD) Outlook Over the Medium Term
  • Other Fiscal Planning Assumptions
  • Economic and Fiscal Outlook Scenarios
• Borrowing and Debt Management
• Ontario’s Capital Plan

Chapter 1: A Plan to Protect Ontario

Section A: Protect Workers and Businesses from Tariffs and Economic Uncertainty

• Supporting Sectors Affected by U.S. Tariffs Through the Protect Ontario Financing Program
• Helping Communities and Industries Navigate Trade Disruptions
• Supporting At-Risk Workers
• Helping Businesses Through the Deferral of Select Provincially Administered Taxes
• Continuing to Support Businesses Through Workplace Safety and Insurance Board Rebates and Premium Reductions

Section B: Protect Ontario by Building the Most Competitive Economy in the G7

Protect Ontario by Unleashing Our Economy

• Powering Ontario’s Affordable Energy Future
• Creating Special Economic Zones for Strategically Important Projects
• Unlocking Ontario’s Vast Critical Mineral Resources
• Strengthening Indigenous Partnerships
• Making Ontario More Competitive Than Ever
• Attracting Investments That Support and Create Manufacturing Jobs
• Expanding and Diversifying Trade Opportunities
• Supporting Local Businesses and “Buy Ontario”
• Securing High-Impact Investments Through Invest Ontario
• Supporting Ontario’s Forest Sector
• Strengthening Ontario’s Agri-Food Sector
• Strengthening Ontario’s Tourism Sector
• Fostering Innovation and Entrepreneurship in Ontario
• Improving Capital Markets
• Highlighting Ontario’s Cannabis Sector
• Helping Municipalities and Communities Build Ontario
• Safeguarding Ontario’s Workforce
• Modernizing Ontario’s Pension Sector

Protect Ontario by Building

• Building Highways
• Building Transit
• Building Stronger Communities

Protect Ontario by Keeping Costs Down

• Supporting Families and Individuals
• Providing Harmonized Sales Tax Relief for First-Time Home Buyers on New Homes
• Permanently Reducing Gasoline Tax and Fuel Tax Rates
• Removing Municipal Speed Cameras to Protect Taxpayers
• Removing Highway 407 East Tolls
• Helping Transit Users Save with One Fare
• Saving on Electricity Costs
• Delivering the $200 Ontario Taxpayer Rebate
• Increasing the Minimum Wage for Workers
• Maintaining an Effective Property Assessment and Taxation System

Protect Ontario’s Borders and Communities

• Protecting Ontario’s Borders
• Fighting Crime with the Expanded Joint Air Support Unit
• Combatting and Preventing Auto Theft
• Fighting Guns, Gangs and Violence
• Keeping Violent, Repeat Offenders Behind Bars
• Getting Tough on Crime to Protect Communities from Criminals
• Training More Police Officers to Protect Communities
• Supporting Police Services in First Nation Communities
• Building More Capacity in Provincial Jails
• Protecting the Health and Safety of Firefighters
• Recognizing Service in Policing
• Supporting Investigations with Advanced DNA Technology
• Strengthening Supports to Combat Hate
• Protecting Ontario from Human Trafficking
• Advancing Anti-Money Laundering Efforts Through a Beneficial Ownership Registry

Protect Ontario’s Public Services

• Advancing Ontario’s Primary Care Action Plan
• Training and Retaining Health Care Providers Across Ontario
• Investing in Home and Community Care
• Investing in Hospital and Health Infrastructure
• Increasing Regional Capacity at Halton Healthcare Services
• Expanding Diabetes Services in Durham Region
• Connecting More Families to Fertility Supports
• Expanding Homelessness and Addiction Recovery Treatment Hubs
• Investing in Long-Term Care Homes
• Supporting the Ontario Autism Program
• Investing in Schools and Child Care Spaces
• Preferred Provider Networks
• Public Services Delivered More Efficiently
• Modernizing Ontario’s Alcohol Marketplace
• Commemorating the 50^th Anniversary of the Franco–Ontarian Flag
• Expanding French-Language Postsecondary Education in the North

Chapter 2: Economic Performance and Outlook

• Introduction
  • Revisions to the Outlook Since the 2025 Budget
• Recent Economic Performance
  • Ontario Labour Market
  • Consumer Price Inflation
• Economic Outlook
  • Global Economic Environment
  • Financial Markets and Other External Factors
  • Details of Ontario’s Economic Outlook
  • Employment
  • Consumer Price Index
  • Housing Market
  • Risks to the Outlook
  • Alternative Economic Scenarios

Chapter 3: Ontario’s Fiscal Plan and Outlook

• Introduction
• Key Changes in 2025–26 Since the 2025 Budget
  • Revenue Update
  • Expense Update
  • Prudence in 2025–26
• Medium-Term Fiscal Plan
  • Medium-Term Revenue Outlook
  • Medium-Term Expense Outlook
  • Prudence Built into the Medium-Term Outlook
• Transparency and Risks
• Summary of Significant Accounting Policies
• Details of Ontario’s Finances

Chapter 4: Borrowing and Debt Management

• Introduction
• Borrowing Program
• Sustainable Bond Framework
• Cost of Debt
  • Term of Debt
• Ensuring Adequate Liquidity Levels
• Debt Burden Reduction Strategy

Annex: Details of Tax Measures and Other Legislative Initiatives

• Overview
• Providing Harmonized Sales Tax Relief for First-Time Home Buyers on New Homes
• Implementing 2025 Budget Tax Measures
• Ensuring Flexibility for Machinery and Equipment Expenditures under the Ontario Made Manufacturing Investment Tax Credit
• Attracting Foreign Industrial Investment to Ontario
• Establishing a Beneficial Ownership Registry
• Summary of Measures
• Technical Amendments
  • Other Legislative Initiatives

Consultations on a Plan to Build Ontario

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: 2025 Budget Compared to the 2025 Ontario Economic Outlook and Fiscal Review (FES)
• Ontario’s Medium-Term Fiscal Plan — Details
• Ontario Real GDP Growth Scenarios
• Ontario Nominal GDP Growth Scenarios
• Ontario’s Taxation Revenue Scenarios
• 2025–26 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 Investing in Hospital and Health Infrastructure
• Table 1.3 School Projects Opening for the 2025–26 School Year
• Table 1.4 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: 2025 Budget Compared to the 2025 Ontario Economic Outlook and Fiscal Review (FES)
• 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 Ontario Real GDP Growth Scenarios
• Table 2.8 Ontario Nominal GDP Growth Scenarios

Chapter 3: Ontario’s Fiscal Plan and Outlook

• Table 3.1 Fiscal Summary
• Table 3.2 2025–26 In-Year Fiscal Performance
• Table 3.3 Key Changes to 2025–26 Revenue Projections
• Table 3.4 Key Changes to 2025–26 Total Expense Projections
• Table 3.5 Summary of Medium-Term Revenue Outlook
• Table 3.6 Summary of Medium-Term Expense Outlook
• Table 3.7 Total Revenue
• Table 3.8 Total Expense
• Table 3.9 Infrastructure Expenditures
• Table 3.10 10-Year Review of Selected Financial and Economic Statistics

Chapter 4: Borrowing and Debt Management

• Table 4.1 2025–26 Borrowing Program and Medium-Term Outlook
• Table 4.2 Progress on Relevant Debt Sustainability Measures

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 2025 Budget
• Ontario Fiscal Outlook Scenarios

Chapter 1: A Plan to Protect Ontario

• Chart 1.1 Supporting Ontario Businesses
• Chart 1.2 Highway 413 Project Route
• Chart 1.3 Bradford Bypass Project Route
• Chart 1.4 Select Measures That Provide Relief to Families and Individuals

Chapter 2: Economic Performance and Outlook

• Chart 2.1 Lower Exports Contribute to Ontario Real GDP Decline in Q2
• Chart 2.2 Ontario Consumer Price Inflation Moderates
• Chart 2.3 Ontario Nominal GDP Growth Projected to Moderate
• Chart 2.4 Global Real GDP Growth Projections
• Chart 2.5 Bank of Canada Key Policy Interest Rate and Ontario Inflation
• Chart 2.6 Unemployment Rate Projected to Decline
• Chart 2.7 Ontario Inflation Rate Settling Into Target Range
• Chart 2.8 Housing Market Projected to Rebound
• Chart 2.9 Range of Ontario GDP Scenario Forecasts

Chapter 3: Ontario’s Fiscal Plan and Outlook

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

Chapter 4: Borrowing and Debt Management

• Chart 4.1 Borrowing Outlook Scenarios for Long-Term Borrowing
• Chart 4.2 2025–26 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)