A Measured Update Ahead of a Defining Fiscal Milestone

What You Need to Know

• The Ontario government’s 2025 Fall Economic Statement (FES) includes two key themes: Protecting Workers and Businesses and Building a Competitive Economy.
• This year’s FES is a traditional fiscal update for the government with minimal new spending items, including:
  • Investing more than $1.1 billion over three years to support an 8 per cent increase in home care volumes in 2025–26 and to support the expansion and sustainability of the Hospital to Home (H2H) program.
  • An additional $100 million in the Ontario Together Trade Fund (OTTF) to further help small- and medium-sized enterprises diversify into new markets and strengthen trade resiliency.
  • Rebating the full provincial portion of the HST for first-time home buyers of most new homes.
• Ontario’s economy remains resilient but has been negatively impacted by US trade policy, weaker global economic outlook, inflation and interest rates.
• Ontario’s 2025-26 deficit is projected to be smaller at $13.5 billion, an improvement of $1.1 billion from the 2025 Budget. The government is still projected to balance the budget in two years.

Political Analysis

Unlike previous Fall Economic Statements—such as 2024’s, which featured pre-election-style spending and new program launches—Ontario’s 2025 FES reflects a return to traditional fiscal fundamentals. While it carries some of the tone of a mini budget, its substance is more restrained, focused on reinforcing existing commitments rather than introducing sweeping new initiatives.

The statement centres on two broad themes: Protecting Workers and Businesses and Building a Competitive Economy. In the legislature, Finance Minister Peter Bethlenfalvy emphasized updating the province’s financial outlook and maintaining fiscal discipline amid global economic uncertainty.

While some new measures were announced in the lead-up to the FES, they were modest in scope and did not shift the overall tone of the statement.

Minister Bethlenfalvy’s remarks continued to reflect a sober assessment of Ontario’s economic resilience, citing inflationary pressures, interest rate volatility, and shifting US trade policy as key challenges. The projected deficit for 2025–26 is now expected to improve by $1.1 billion over the spring budget, landing at $13.5 billion—signalling a cautious but steady approach to fiscal management.

With the federal government having released its budget just days prior, Ontario’s FES serves more as an interim update than a policy-defining moment. The province used the opportunity to reiterate its asks of Ottawa—from support for the Ring of Fire to enhanced investment tax credits for nuclear—and will now look to federal developments on trade and fiscal policy.

Ultimately, the forthcoming 2026 Budget will represent the province’s principal fiscal and policy-defining opportunity. It is expected to offer a more comprehensive and substantive roadmap, shaped by federal actions, economic conditions, and the government’s long-term strategic priorities.

Next steps

Bill 68, Plan to Protect Ontario Act (Budget Measures), 2025 (No. 2)¸will be debated in the legislature over the next few weeks and with the government’s majority it is expected to pass before the end of this sitting session.

The government is also expected to launch its pre-budget consultations soon which will give stakeholders the opportunity to share their ideas for the 2026 budget.

Click here to read the full analysis.