This afternoon, Ontario’s Finance Minister, the Honourable Peter Bethlenfalvy, tabled the 2026 Fall Economic Statement (FES) titled A Plan to Protect Ontario. This 2026 Ontario Economic Outlook and Fiscal Review focuses on helping create a more resilient economy during times of economic uncertainty by including an $8B capital-investment tax relief. It aims to improve Ontario’s competitiveness to attract more jobs in sectors including nuclear energy, artificial intelligence, advanced manufacturing, critical mineral mining and refining, defence, and others.
The provincial deficit is projected to increase by more than 22% to $16.9B as a result of the U.S. tariffs and economic uncertainty, compared to the $13B forecast. The government has projected deficits of $12.7B in 2027–28 and $6.7B in 2028–29. The government’s deficit will sit at $36B over the next three years, including a $4B contingency fund for 2026.
Net debt to GDP and revenue have decreased compared to the previous year, with real GDP projected to increase by 0.5% in 2026 and 1.5% in 2027. The government plans to balance the books in the next three years.
Economic Highlights
- Real gross domestic product (GDP) is projected to grow by 0.5% in 2026, with increases of 1.5% in 2027, 1.8% in 2028, and 2% in 2029.
- The net debt-to-GDP ratio is forecast to be 37.4% in 2026–27, compared to the forecast of 37.7% in the 2026 Budget.
Tariff Response
- Ontario Competitiveness Tax Cut would provide $8B in provincial tax relief.
- The Productivity Mega Deduction will lower the cost of business investment by allowing businesses to write off 100% of the cost of certain capital expenses.
- $11B in additional investment and 30,000 new jobs.
- $8.7B in investments to strengthen the province’s steel, automotive and critical minerals sectors.
- Cutting red tape and accelerating approvals for businesses, and eliminating 220,000 days’ worth of permit processing times, while reviewing 375 business-facing permits over three years.
- The government has also expanded eligibility for the Ontario Together Trade Fund (OTTF) and the Protect Ontario Financing Program (POFP).
Infrastructure
- As announced in the 2026 budget, an additional $300M investment will be delivered to the Community Sport and Recreation Infrastructure Fund (CSRIF) to help build and upgrade sport and recreation facilities across the province, for a total of $500M.
- The Building Ontario Fund will continue partnering with Canadian institutional investors on energy, housing, long-term care, transportation, municipal and Indigenous infrastructure, and critical minerals.
- Investing $110M in 2026–27 to repair and maintain provincial buildings such as courthouses, OPP detachments, provincial schools and government offices. It will cover 268+ projects in 66 communities, mostly outside the GTA, and is expected to support approximately 600 jobs.
- Advancing the Northern Shield Energy Corridor, a proposed 3,300 km pipeline built with Canadian steel, carrying up to 500,000 barrels of crude a day from Alberta to Sarnia. Ontario is also looking at pipeline extensions to ports and at strategic petroleum reserves.
- Exploring expanding the Building Ontario Businesses Initiative (BOBI) to municipalities, so Ontario businesses can compete more effectively for municipal, provincial, and broader public-sector contracts. Buy Ontario rules are also being tightened, so infrastructure projects are designed to use more Ontario and Canadian goods and workers.
- $63B over 10 years for transit, including the Ontario Line, the Yonge North, Scarborough and Eglinton West subway extensions, the Hazel McCallion and Hamilton LRTs, GO expansion and the Northlander’s return.
- Roads to the Ring of Fire are set to begin opening in November 2030, five years ahead of schedule.
- Early-stage planning continues for new nuclear at Wesleyville; Bruce C’s early work is moving ahead under an IESO cost-sharing agreement; the Red Lake transmission line is now a priority project.
- OPG is investing $500,000 each in growth readiness funding for Haldimand County and St. Clair Township to explore opportunities for new electricity generation at OPG’s Nanticoke and Lambton sites.
- Development Reduction Charges Program (DCRP) funding to support municipalities reducing development charges has gone to Toronto, Vaughan, Hamilton, Mississauga, and Bradford West Gwillimbury, with additional municipalities to be announced in the coming months.
- Increasing annual funding for Connecting Links from $30M to $45M to support municipalities in addressing eligible connecting link road or bridge improvement needs.
Labour
- The unemployment rate is expected to fall from 7.2 percent in 2026 to 6.1 percent by 2029.
- Advancing streamlined recognition pathways for physicians and nurses who are registered in other provinces.
- As announced in the 2026 Budget, the government is investing an additional $64.2M over three years in the In-Class Enhancement Fund.
- Round 6 of the Skills Development Fund is now being delivered, with stronger oversight. It includes $10.9M to train nearly 2,000 health care workers.
- Developing a standardized entry-level training curriculum for truck drivers.
- Starting in fall 2026, a $220M investment over four years will go to the Ontario Learn and Stay Grant to expand to family medicine residents who commit to five years of practice in Ontario.
Health Care
- The province aims to connect every Ontarian to primary care by 2029 through the Primary Care Action Plan, supported by a $3.4B investment over four years.
- $64B in supports for health infrastructure, including nearly $50B in capital grants toward 50 hospital projects and approximately 3,000 new hospital beds.
Other Announcements
- Measures for enforcement against illegal cannabis activity across Ontario.
- Permanently cutting the Gasoline Tax rate by 5.7 cents per litre and the Fuel (diesel) Tax rate by 5.3 cents per litre to establish a rate of 9 cents per litre.
- Support for research and development by restoring capital expenditures as eligible expenditures under the Ontario Research and Development Tax Credit and the Ontario Innovation Tax Credit.
- Supporting Ontario’s forest sector through more than $90M in investments to strengthen competitiveness and innovation.
- Supporting Ontario’s film and television sector by proposing to update eligibility for the Ontario Computer Animation and Special Effects (OCASE) Tax Credit.
