Ontario's deficit expected to rise, finance minister says

Ontario's deficit is predicted to be higher this year than last year, Finance Minister Peter Bethlenfalvy said, as the province responds to U.S. tariffs on its steel, auto and manufacturing sectors. He said he will release the province's fall economic update next Thursday.

A deficit is the amount by which government spending is larger than its revenue. According to The Globe and Mail, Ontario ran a $13-billion deficit in 2025-26. Bethlenfalvy said deficits are necessary while the province faces the tariffs. Earlier projections had put the 2026-27 deficit at $13.8 billion.

The province's last projections showed a small surplus, meaning revenue would exceed spending, by 2028-29. Bethlenfalvy ruled out balancing the books by raising taxes or cutting health care.

Ontario has pledged $30 billion to support businesses and workers affected by the trade war. Ontario and the federal government also announced $9 billion in joint support for the steel, auto and mining sectors. That announcement was made alongside Prime Minister Mark Carney.

On the business side, Ontario plans to provide more than $8 billion in additional relief to lower the cost of capital investments, meaning the money companies spend on equipment and buildings. The province said this relief, combined with accelerated writeoffs, which let businesses claim the cost of equipment sooner, will amount to more than $12 billion in tax breaks over the next five years.

Bethlenfalvy said he will release the fall economic update, the province's report on its finances and economic outlook, next Thursday.