2026 Ontario Budget delivering on plan to protect Ontario
NEWS RELEASE
A Plan to Protect Ontario
2026 Ontario Budget delivering on plan to protect Ontario workers and families by building a more competitive, resilient and self-reliant economy
March 26, 2026
Ministry of Finance
TORONTO — Today, Minister of Finance Peter Bethlenfalvy released the 2026 Ontario Budget: A Plan to Protect Ontario. In the midst of tariffs and economic uncertainty, the government continues to deliver on its plan to protect Ontario by building the most competitive, resilient and self-reliant economy in the G7, including through significant tax relief contained in the next phase of Ontario’s Tax Action Plan. The 2026 Budget furthers the government’s plan to attract jobs and investment, lower costs for workers and businesses, keep life affordable for families and individuals and make targeted investments in key public services that support the province’s long-term prosperity.
“Ontario is navigating economic challenges with a pragmatic and prudent fiscal plan,” said Minister Bethlenfalvy. “To help the province navigate these times and come out stronger, we are investing in strategic priorities such as energy, critical minerals, key infrastructure and critical technologies that will make our economy stronger, while cutting red tape and creating the conditions for businesses to grow, supporting workers and strengthening Ontario’s economy.”
Despite challenging global economic circumstances. Ontario’s 2026 Budget reflects the benefits of the province’s resilience and prudent fiscal management to date. While other provinces and the federal government have made significant funding cuts, reductions in the size of the civil service or increased taxes, Ontario’s 2026 Budget continues to increase funding for key priorities like infrastructure, health care and education, while providing substantial tax relief to make life more affordable for Ontario families, increase competitiveness and spur investment and job creation in the province.
The government’s approach maintains a path to balance as part of its fiscal plan. The 2026 Budget continues to take a prudent and financially responsible approach through sustained investments in key public services, while maintaining the fiscal flexibility needed to respond to changing conditions and support for the people of Ontario.
Highlights include:
• Delivering on the province’s Tax Action Plan to make Ontario the most competitive jurisdiction in the G7 and lower costs by:
o Providing further relief for home buyers by removing the full 13 per cent of the Harmonized Sales Tax (HST) for all eligible buyers of new homes valued up to $1 million for a maximum rebate of $130,000 in relief to an eligible buyer and the amount would be maintained for new homes valued up to $1.5 million. The federal government has agreed to cost-share with Ontario in support of provincial housing initiatives, subject to passage of federal legislation, which would approximately cover the federal five per cent portion for the HST that is being removed from new homes in Ontario. This partnership would provide almost $2.2 billion in total joint tax relief for housing in Ontario.
o Ensuring Ontario’s small businesses continue to stay competitive and resilient by proposing to cut the small business corporate income tax (CIT) rate from 3.2 per cent to 2.2 per cent effective July 1, 2026. By cutting the rate by more than 30 per cent, over 375,000 Ontario small businesses would benefit from an additional $1.1 billion in CIT relief over the next three years.
o Intending to lower the cost of capital investments by allowing businesses to accelerate the income tax deduction for the cost of depreciable assets, in parallel with changes announced by the federal government. These changes would lower the cost for investment in a broad range of assets and would take effect following the passage of federal legislation.
• Establishing the Protect Ontario Account Investment Fund, in which the province will invest up to $4 billion to attract investment from pension funds and other private capital to advance Ontario’s long-term economic and strategic priorities.
• Increasing funding for the Ontario Autism Program to nearly $1 billion annually, which will enable more children and youth to access core clinical services while further strengthening sector capacity across the province.
• Expanding Ontario’s four-year investment in the Primary Care Action Plan to $3.4 billion from 2025 to 2029, furthering the province’s plan to connect everyone in Ontario to a family doctor or primary care provider. Initiatives through the Primary Care Action Plan will close the gap for the remaining people of Ontario who want to connect to primary care, achieving the goal of connecting every person in Ontario to primary care.
• Investing in the most ambitious provincial capital plan in Canadian history, with planned investments over 10 years totalling more than $210 billion, including $37 billion in 2026–27. This includes building highways, hospitals, transit and community infrastructure to keep workers on the job, strengthen Ontario’s economy and ensure communities thrive for generations to come.
• Providing an additional $300 million over six years through the Community Sport and Recreation Infrastructure Fund, to help meet the needs of growing communities by supporting the repair, upgrade or construction of new sport and recreation facilities across the province. Ontario’s investments through the program now total $500 million.
• Improving student achievement and preparing students for the future by investing $66 million per school year to create the Classroom Supplies Fund for elementary school homeroom teachers to receive a Classroom Supplies Card that provides access to $750 annually to reduce out-of-pocket expenses.
• Saving daily transit users in the Greater Toronto and Hamilton Area (GTHA) up to $1,600 per year, by extending the Ontario One Fare Program for an additional two years to continue keeping costs down for commuters. •
Quick Facts
• Ontario’s 2025–26 deficit is projected to be $12.3 billion — an improvement of $2.3 billion compared to the outlook published in the 2025 Budget.
• Ontario’s prudent plan does not raise taxes or cut services, and Ontario is one of the only provinces that retains a path to balance.
• Over the medium term, the government is projecting deficits of $13.8 billion in 2026–27 and $6.1 billion in 2027–28, before planning for a surplus of $0.6 billion in 2028–29.
• Ontario’s real GDP rose by an estimated 1.2 per cent in 2025 and is projected to rise by 1.0 per cent in 2026, 1.7 per cent in 2027, 1.8 per cent in 2028 and 2.0 per cent in 2029.
• Ontario’s 2025–26 net debt-to-GDP ratio is now forecast to be 36.8 per cent, a decrease of 1.1 percentage points from the 37.9 per cent forecasted in the 2025 Budget, which is primarily due to a lower-than-projected deficit. Over the medium-term outlook, the net debt-to-GDP ratio is forecast to stay below the target of 40.0 per cent, demonstrating that Ontario continues to make positive progress towards reducing the debt burden. •
Additional Resources
Read the 2026 Budget: A Plan to Protect Ontario
Read the highlights of 2026 Budget: A Plan to Protect Ontario
Read the Backgrounder: Economic and Fiscal Overview
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Sarah Chapin 3/26/2026 |
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