2026 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
• Protect Workers and Businesses from Tariffs and Economic Uncertainty
• Protect Ontario by Building the Most Competitive Economy in the G7
• Protect Ontario by Building
• Protect Ontario by Keeping Costs Down
• Protect Ontario’s Borders and Communities
• Protect Ontario’s Public 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 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 Outlook Over the Medium Term
  • Other Fiscal Plan Assumptions
  • Economic and Fiscal Outlook Scenarios
• Borrowing and Debt Management
• Ontario’s Capital Plan
• Building Together Through Federal–Provincial Partnerships

Chapter 1: A Plan to Protect Ontario

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

• Supporting Businesses Through the Protect Ontario Financing Program
• Investing in Ontario’s Future Economy with the Protect Ontario Account Investment Fund
• Assisting Communities and Industries Impacted by Trade Disruptions
• Protecting Ontario with the Buy Ontario Act
• Protecting Ontario’s Auto Sector
• Fostering Growth in Ontario’s Forest Sector
  • Supporting Innovation in Ontario’s Forest Sector
  • Investing in Ontario’s Forest Biomass Program
  • Developing Advanced Wood Construction in Ontario
• Supporting Workers Impacted by Tariffs
• Helping Businesses Through the Deferral of Select Provincially Administered Taxes

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

Strengthening the Foundation for Growth Through a Multi-Year Tax Action Plan

Protect Ontario by Unleashing the Economy

• Powering Ontario’s Energy Future
• Unleashing Ontario’s Critical Minerals Advantage
• Advancing Ontario’s Life Sciences Sector
• Building Ontario’s Defence Industry
• Accelerating New Opportunities for Investment and Growth
• Building New Trade Opportunities for Ontario Businesses
• Making Ontario Even More Competitive and Productive
• Creating New Growth Opportunities Through Innovation and Technology
• Supporting Manufacturing Businesses and Workers
• Cultivating Cutting-Edge Growth in Ontario’s Agri-Food Sector
• Investing to Protect and Support Northern and Rural Communities
• Strengthening Ontario’s Tourism and Cultural Sectors
• Supporting Entrepreneurs to Grow and Succeed
• Improving Capital Markets
• Safeguarding Ontario’s Workforce
• Modernizing Ontario’s Pension Sector

Protect Ontario by Building

• Building Highways
• Building Transit
• Protect Ontario Communities

Protect Ontario’s Borders and Communities

• Protecting Ontario’s Borders
• Strengthening Ontario’s Bail System to Protect Communities
• Building More Provincial Jails
• Getting More Boots on the Ground by Making It Easier to Recruit and Train Police Officers
• Modernizing Police Training Facilities
• Supporting Police Services in First Nation Communities
• Fighting Guns, Gangs and Violence
• Tackling Organized Crime
• Strengthening Enforcement and Partnerships to Combat Contraband Tobacco
• Deterring Financial Crime Through Beneficial Ownership Transparency
• Protecting Public Spaces
• Protecting Children from Sexual Abuse and Exploitation on the Internet
• Investing in Emergency Services

Protect Ontario by Keeping Costs Down

• Supporting Families and Individuals
• Enhancing Harmonized Sales Tax Relief on New Homes
• Expanding Harmonized Sales Tax Relief for First-Time Home Buyers on New Homes
• Saving on Energy Costs
• Permanently Reducing the Tax Rates for Gasoline and Fuel
• Removing Tolls
• Helping Transit Users Save with One Fare
• Putting Fans and Consumers First
• Ensuring an Effective Property Assessment and Taxation System

Protect Ontario’s Public Services

• Connecting Everyone in Ontario to Primary Care
• Investing in Hospitals
• Strengthening Home and Community Care
• Expanding Access to Supportive Housing
• Training and Retaining Health Care Providers Across Ontario
• Continuing to Invest in Clinical Education for Nurses
• Building and Expanding Hospitals
• Supporting High-Quality Long-Term Care
• Building Long-Term Care Homes
• Strengthening Supports to Improve Student Achievement
• Protecting Children in Child Care with the Liam Riazati Memorial Fund
• Investing in Schools and Child Care Spaces
• Supporting the Postsecondary Sector’s Long-Term Success and Sustainability
• Expanding Services for Children and Youth with Autism
• Enhancing Social Assistance to Help Manage Rising Costs
• Strengthening Community Organizations to Support People
• Boosting Supports to Help Women Build Skills and Advance Their Careers
• Advocating for a Fair and Sustainable Federal Transfer System
• Protecting Ontario with Stronger Safeguards for Public Information
• Allowing Retail Stores to Open on Family Day and Victoria Day
• Public Services Delivered More Efficiently
• Strengthening Public Services for a Sustainable and Prosperous Future
• Modernizing Ontario’s Alcohol Sector
• Improving Ontario’s Mortgage Broker Industry
• Protecting Consumers in the Life and Health Insurance Sector

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
• Transparent Reporting on the Economy

Chapter 3: Ontario’s Fiscal Plan and Outlook

• Introduction
• 2025–26 Interim Fiscal Performance
  • 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
• New Accounting Standards
  • Conceptual Framework and Reporting Model
• 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
• Consolidated Financial Tables

Annex: Details of Tax Measures and Other Legislative Initiatives

• Overview
• Lowering Taxes for Small Businesses
• Enhancing Harmonized Sales Tax Relief on New Homes
• Eliminating the Harmonized Sales Tax New Housing Rebate and New Residential Rental Property Rebate
• Expanding Harmonized Sales Tax Relief for First-Time Home Buyers on New Homes
• Ontario Trillium Benefit Lump-Sum Payment Threshold
• Simplifying and Reducing Alcohol Taxes
• Regional Opportunities Investment Tax Credit
• Providing Insurance Premium Tax Flexibility for Benefit Plans
• 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: 2025 Budget Compared to 2026 Budget
• Details of Ontario’s Fiscal Plan
• 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 Projected School Projects Opening for the 2026–27 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: 2025 Budget Compared to the 2026 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 Ontario Real GDP Growth Scenarios
• Table 2.8 Ontario Nominal GDP Growth Scenarios
• Table 2.9 Ontario Economic Accounts Release Dates

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 Summary of 2025–26 Revenue Changes Since the 2025 Budget
• Table 3.4 Summary of 2025–26 Expense Changes Since the 2025 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 2025–26 Borrowing Program and Medium-Term Outlook
• Table 4.2 Progress on Relevant Debt Sustainability Measures
• Table 4.3 Net Debt and Accumulated Deficit
• Table 4.4 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 2025 Budget
• Ontario Fiscal Outlook Scenarios

Chapter 1: A Plan to Protect Ontario

• Chart 1.1 Building Roads to the Ring of Fire
• Chart 1.2 Supporting Ontario Businesses
• Chart 1.3 Highway 413 Project Route
• Chart 1.4 Bradford Bypass Project Route
• Chart 1.5 Building Transit in the Greater Golden Horseshoe
• Chart 1.6 Select Measures That Provide Relief to Families and Individuals
• Chart 1.7 Ontario’s Health Sector Investments Compared to Federal Health Transfers
• Chart 1.8 Comparative Cumulative Growth Rate of Public-Sector Employees

Chapter 2: Economic Performance and Outlook

• Chart 2.1 Ontario Exports of Goods and Services
• Chart 2.2 Ontario Employment Growth in 2025
• Chart 2.3 Inflation Continues to Moderate in 2025
• Chart 2.4 Ontario Real GDP Growth Outperformed Expectations in 2025
• Chart 2.5 Ontario Real GDP Growth Outlook Modestly Changed
• Chart 2.6 Economic Policy Uncertainty
• Chart 2.7 Global Real GDP Growth Projections
• Chart 2.8 Labour Market Projected to Strengthen
• Chart 2.9 Housing Market Projected to Rebound
• Chart 2.10 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 Total Revenue, 2026–27
• Chart 3.3 Composition of Total Expense, 2026–27

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 Comparison of Interest on Debt Servicing Charges Forecast
• Chart 4.9 Weighted-Average Term of Borrowings
• Chart 4.10 Average Unrestricted Liquid Reserve Levels
• Chart 4.11 2026 Ontario Budget – DBRS Definitions
• Chart 4.12 Net Debt-to-GDP
• Chart 4.13 Net Debt-to-Revenue (formerly Net Debt-to-Operating Revenue)
• Chart 4.14 Interest-to-Revenue (formerly Net Interest-to-Operating Revenue)