Doug Ford has made one thing clear about the March 26 budget: no cuts. Meanwhile, the Financial Accountability Officer says the government is not on track to balance the books by 2027. Tariffs are battering manufacturing. Hospitals are running a billion-dollar structural deficit. The housing market has stalled. Universities are reeling from international student caps. Every major pressure on Ontario is pushing in the same direction: spend more.
Finance Minister Peter Bethlenfalvy tables the 2026 budget next week.
Good luck with that.
Deficits That Keep Getting Bigger
The government projected a $9.8 billion deficit for 2024-25, then $4.6 billion in 2025-26, before a planned $500 million surplus in 2026-27. Last year the government projected surpluses in both those years. Neither materialized.
This keeps happening. Balanced by 2024-25, said the 2022 budget. By 2025-26, said the 2023 budget. By 2026-27, said the 2024 fall economic statement. Each time, new spending pressures or economic shocks erased the surpluses before they arrived.
The gap between what Ford budgets promise and what they deliver keeps widening.
The FAO says the 2027 balanced-budget target is unrealistic. Deficits through at least 2028-29 under current policy. Ontario’s net debt-to-GDP ratio (the FAO tracks this as the most meaningful measure of fiscal sustainability) is expected to climb from roughly 38% to over 41% by the end of the decade, reversing a decade of gradual improvement that started after the 2008 recession.
Cumulative debt: $547.9 billion by 2029-30, a 28.3% increase from the current year. Interest on that debt already consumes roughly $13.5 billion annually, making it the province’s fourth-largest expenditure after health, education, and social services.
$13.5 billion. That is more than the province spends on post-secondary education. (Nobody in government wants to say that out loud.)
For context: British Columbia ran a deficit of roughly $8 billion in its latest fiscal year on a much smaller economic base. Quebec projects a return to balance by 2029-30, though its debt-to-GDP ratio remains higher than Ontario’s. Alberta posted surpluses on resource revenue, but those are now threatened by the same tariffs battering Ontario.
What to Watch: Healthcare
Context: Healthcare is the largest line in Ontario’s operating budget. Hospitals receive a 2% funding increase while costs grow at 6%, creating a structural gap the Ontario Hospital Association pegs at $1 billion.
Healthcare dominates Ontario’s operating plan. Bethlenfalvy has publicly called the spending trajectory “unsustainable” (a word that, from a finance minister, means “we are going to underfund it”). Hospitals are operating on a 2% funding increase directive while costs rise at 6%. The OHA says the structural deficit has hit $1 billion.
More than 700 nursing positions gone since January 2025. Nobody asked the nurses.
Ford has said he will not cut healthcare. But “not cutting” and “funding adequately” are not the same thing. The gap between the 2% directive and the 6% cost growth is the single number that will matter more than any other in this document.
What to Watch: Education
School boards across the province have flagged operating shortfalls. The TDSB alone projects a deficit exceeding $100 million. Teacher hiring freezes, larger class sizes, deferred maintenance on aging buildings. Not occasional. Standard. The government has signalled interest in expanding online learning and consolidating school infrastructure, but boards say they need operational dollars, not capital announcements.
Post-secondary is a separate crisis. International student caps imposed by Ottawa cut a major revenue stream, and several universities have warned of layoffs and program closures. The budget may include bridge funding. But the structural gap between what universities charge domestic students and what it costs to educate them predates the cap by years.
What to Watch: Trade War Response
Ontario’s economy is directly exposed to US tariffs, with 77% of its goods exports going south and 933,000 jobs tied to cross-border trade. The FAO projects 119,200 fewer jobs in Ontario in 2026 compared to a no-tariff scenario. The manufacturing sector alone accounts for 57,700 of those projected losses, with auto and auto parts bearing the largest share.
The budget is expected to include retraining programs, support for affected manufacturers, and possibly infrastructure spending positioned as economic stimulus.
The question is whether the dollar figures are real or just round numbers stapled to press releases.
Infrastructure is the other number to watch. The government’s $200 billion, decade-long infrastructure plan (outlined in Bill 24, the Plan to Protect Ontario Act) includes highways, transit, hospitals, and housing, but a large share of that spending was already committed in previous budgets. That is a lot of concrete. What matters on March 26 is whether there is new money, accelerated timelines, or both.
What to Watch: Housing
The 1.5 million homes target is dead as a hard commitment. Housing starts are at a decade low. Development charge deferrals are in place but have not yet moved the needle, and a coalition of 17 industry groups has called for urgent federal and provincial intervention.
Decade low. Let that sit for a moment.
OREA wants a two-year suspension of development charges entirely. Home builders want the provincial sales tax removed from new home purchases. Either measure would reduce provincial revenue at a time when the deficit is already widening, which is why both are unlikely to appear without significant caveats. Good for the industry, bad for the books.
$700 Million in Retraining, Audited
$700 million. That is how much the government committed to the Skills Development Fund, the retraining program for trades and manufacturing workers that the NDP has turned into its favourite punching bag. The Auditor General reviewed the fund and raised questions about how money was allocated and whether outcomes matched the spending. Any budget commitment to expand retraining will be measured against the government’s track record with this specific fund.
Opposition Positioning
The NDP has launched a “budget report card” to evaluate whether the government makes life more affordable, invests in healthcare and education, and stops what the party calls wasteful spending. Whatever Ford announces, expect it framed against the Skills Development Fund questions and the FOI exemption proposal.
The Liberals, under interim leader John Fraser, will try the fiscally responsible angle. It worked in the 1990s and 2000s but rings hollow given their own deficit record before 2018.
Something Has to Give
Ford promised no cuts. The deficit is $4.6 billion. The FAO calls the debt trajectory unsustainable.
Something in that equation does not add up. The options: borrow more, raise revenue (which Ford has ruled out through tax increases), or find “efficiencies” that aren’t technically cuts but feel exactly like them. A hot housing market or a surprise employment rebound could narrow the gap, but tariffs are pushing the other way, suppressing economic activity and the tax revenue that flows from it. The FAO has warned that tariff-related job losses alone could reduce provincial tax revenue by $2 billion or more.
March 26 will reveal which path the government has chosen.
Sources and verification: The March 26 budget date is from Finance Minister Bethlenfalvy’s announcement, confirmed by CBC News and Global News. The deficit projections ($9.8B for 2024-25, $4.6B for 2025-26, $500M surplus for 2026-27) are from the 2025 Ontario fall economic statement. The FAO’s assessment that the balanced-budget target is unrealistic is from the FAO’s fiscal outlook report. The $547.9 billion debt projection and net debt-to-GDP ratio trajectory are from the FAO. The $13.5 billion annual debt service figure is from the Ontario Public Accounts. Bethlenfalvy’s “unsustainable” characterization of healthcare spending is from CBC News reporting. The TDSB deficit projection is from Toronto District School Board budget documents. Ford’s no-cuts promise is from Global News. The NDP budget report card is from Ontario NDP press materials. The Skills Development Fund review is from the Auditor General of Ontario. Comparisons to BC and Quebec fiscal positions are from respective provincial fiscal updates. Healthcare, tariff, and housing figures cited are sourced in their respective Ontario Pulse articles.
Track the budget and all Ontario legislation at Ontario Pulse.