Ontario is set to table its budget Thursday, and Premier Doug Ford is signalling it will include significant infrastructure spending and measures to stimulate the economy, saying U.S. President Donald Trump’s tariffs will be a major factor.
“We have to look at it through a different lens now, since these tariffs have been put on us,” he said Wednesday.
“You have two options in a budget. You start cutting and slashing, which I’ve never believed in. In tougher times, you go out there, put money into infrastructure — keep building the hospitals, highways, bridges, roads, schools and long-term care homes. We can always balance in a year or two.”
The province’s last major fiscal update, the fall economic statement, had projected a balanced budget by 2026-27, but that was before the election of Trump and the implementation of tariffs. Ford is now suggesting the path to balance will look different.
That was the mandate he said he received in the recent provincial election — which he called in order to ask voters for permission to spend tens of billions of dollars in response to tariffs — said Karl Baldauf, partner at public affairs firm McMillan Vantage and a former chief of staff to Finance Minister Peter Bethlenfalvy.
“Everything is changing right now, and that goes for the fiscal situation of the province, the economic situation of the province, and even our culture as Ontarians and as Canadians — how we’re viewing our neighbours to the south,” Baldauf said.
“I think a lot of the narrative to the budget will be shaped by how the province confronts that threat.”
Ford and Bethlenfalvy have already made several pre-budget announcements, including removing tolls from the provincially owned portion of Highway 407 east of Toronto and making a gas tax cut permanent.
The budget will also include up to $300 million to build or expand up to 17 community-based primary care teaching clinics in areas where many people lack access to a family doctor or nurse practitioner.
It will also include an expansion of the manufacturing investment tax credit and a six-month deferral of select provincial taxes for businesses.
The government will also highlight a $2-billion rebate being issued by the Workplace Safety and Insurance Board to safe employers as a job-protection measure.
A recent report from Ontario’s Financial Accountability Office said American tariffs would reduce demand for Ontario’s exports, slowing real GDP growth from the projected 1.7% to 0.6%, which “implies that a modest recession would occur in 2025.”
The FAO estimated the tariffs would result in 68,100 fewer jobs in Ontario in 2025.
The impact on jobs and GDP could vary depending on whether existing tariffs — such as those on steel, aluminum and automobiles — are reduced, or if new ones, such as on copper or pharmaceuticals, are imposed. Canada’s retaliatory actions would also play a role.
NDP Leader Marit Stiles said the budget is “a true test of this moment.”
“Not only do we expect to see those infrastructure dollars being spent in areas of real, critical need in Ontario, but we want to see the government talk about how we’re going to build new supply chains, how we’re going to tariff-proof our province,” she said.
“A lot of that also involves making sure Ontarians have access to the best-quality health care, the best schools, and a strong post-secondary education system.”
Liberal Leader Bonnie Crombie said she hopes the budget includes tax cuts, like those she promised during the election.
“In addition, we’re looking for more investment in education, especially funding for our colleges and universities that have been relying on foreign students, who have obviously been cut back,” she said.
“Then finally, not only affordability measures with respect to tax cuts, but also with housing.”
Green Party Leader Mike Schreiner said he hopes the budget contains realistic solutions.
“I don’t want to see hundreds of billions of dollars wasted on a ridiculous tunnel under the 401 when we have cheaper solutions to traffic, like paying the tolls for truckers on the 407,” he said.
The Ford government is seeking proposals for a feasibility study for the tunnel, but the premier has pledged to get it built no matter what.