Every year, the balanced budget gets one year further away. The 2022 budget said balance by 2024-25. The 2023 budget said 2025-26. The fall economic statement said 2026-27. Now here comes Finance Minister Peter Bethlenfalvy at Queen’s Park on Thursday, unveiling a $13.8 billion deficit for 2026-27, nearly double the $7.8 billion his own government projected for the same year twelve months ago, and pushing the surplus horizon to 2028-29. He called it “the moment we’re in.” He’s not wrong that the moment is difficult. But the moment keeps arriving on schedule.
The 2026 Ontario Budget, titled A Plan to Protect Ontario, clocks in at $244.2 billion in total spending. It is the Ford government’s eighth budget, and the first one that stops pretending a surplus is around the corner.
The Deficit Story
The revised numbers are stark. Ontario ran a $12.3 billion deficit in 2025-26, which was actually $2.3 billion better than projected, small consolation given where things go from there. The 2026-27 figure balloons to $13.8 billion, and the year that was supposed to produce a surplus, 2027-28, now shows a $6.1 billion shortfall instead. The new balance date: 2028-29, with a projected $600 million surplus.
That is the fourth time the Ford government has pushed back its balanced budget target. Not the second. Not the third.
Ontario Deficit Trajectory (Billions)
The provincial net debt sits at $485 billion for 2026-27. When Doug Ford was first elected in 2018, it was $337 billion. At current trajectory, it crosses half a trillion dollars in 2027-28. Debt servicing now costs $17.2 billion annually, which exceeds what Ontario spends on post-secondary education. That’s not a rounding error in the budget math. It’s a structural constraint.
Bethlenfalvy pointed out that virtually every Canadian province has widened its deficit this year (true), and that Ontario’s debt-to-GDP ratio has actually improved slightly, falling to 37.7 per cent from the 38.9 per cent projected last year. The Canadian Taxpayers Federation was not moved. Ontario director Noah Jarvis said interest charges “continue to balloon because Ford’s spending continues to balloon.” The Canadian Federation of Independent Business, for its part, had kinder words for the small business measures.
What the Money Does
The biggest consumer-facing item is HST relief on new homes. Starting April 1, 2026, the full 13 per cent tax disappears on new homes valued up to $1 million, with partial relief up to $1.5 million. Maximum savings: $130,000. The measure runs for exactly one year, at a cost to the province of $1.4 billion. Whether a one-year HST holiday meaningfully shifts homebuying behaviour, or just shifts its timing, is a question the budget does not address.
Small businesses get a rate cut, from 3.2 per cent to 2.2 per cent on corporate income tax, effective July 1, 2026. The province says 375,000 Ontario small businesses will benefit, with roughly $5,000 in annual relief per business and a total impact of $1.1 billion over three years.
Context: Ontario’s small business corporate income tax rate applies to active business income up to the small business deduction limit. The proposed cut from 3.2% to 2.2% represents a reduction of more than 30%, according to provincial budget documents. The rate change requires legislative approval.
Transit riders in the Greater Toronto and Hamilton Area get two more years of the One Fare Program, which the province says saves frequent users up to $1,600 per year by allowing transfers between transit systems without paying again. The extension was expected; the GTHA transit file has been one of the few areas where the Ford government has drawn consistent praise from riders.
The ticket scalping ban is new and genuinely populist: reselling concert, sports, and theatre tickets above face value would be illegal under the proposed measures. No price cap structure was released Thursday, and enforcement details remain vague (good luck with that), but the political optics are easy enough to read.
Health Care: The Gap
$101.2 billion for health care is the headline number, and it sounds large because it is. But the hospital allocation tells a more uncomfortable story.
The province is committing $1.1 billion in new hospital funding for the coming fiscal year. The Ontario Hospital Association, which represents 135 hospital corporations, told the government it needed nearly $2.8 billion just to stabilize the sector. That’s a gap of roughly $1.7 billion between what hospitals say they need to stop deteriorating and what they’re getting. The government frames its number as “more than a billion dollars in new funding.” The OHA would frame it differently.
Not all of the health news is grim. The Ontario Autism Program receives $965 million in 2026-27, including $186 million in new funding. Home and community care gets $1.1 billion over three years for nurses, personal support workers and therapists.
Infrastructure: Big Numbers, Missing Price Tags
The province is billing its capital plan as the most ambitious in Canadian history: $210 billion over 10 years, with $37 billion committed in 2026-27 alone. Highways, hospitals, transit, and community infrastructure are all named.
Field work on the Highway 401 tunnel is said to start this spring. The only firm cost disclosed: $9.1 million for a feasibility study.
"You can see it by the priorities in this budget — an island airport, a ridiculous tunnel under [Highway] 401, Ontario Place, Highway 413. These projects are so irresponsible that the government talks about them in the budget and never assigns dollar figures to them because they're too embarrassed by the high cost associated with them, when so many people are struggling to get by."
Schreiner’s complaint has some teeth. A government that describes its capital plan as the most ambitious in Canadian history and then discloses a $9.1 million study as the only hard number on one of its signature projects is, at minimum, being selective with the details.
The Economy They’re Betting On
The budget’s fiscal projections depend on an economic outlook that is cautiously pessimistic. Real GDP growth of one per cent in 2026. Unemployment, currently at 7.6 per cent, is projected to tick down to 7.4 per cent this year before falling to 6.9 per cent in 2027. Ontario lost nearly 40,000 jobs in auto, steel and aluminum in the second and third quarters of 2025 alone, directly attributable to U.S. tariffs.
The province’s independent fiscal watchdog concluded that Ontario appeared to avoid a recession in 2025. That’s a low bar to clear, but the government cleared it.
The new “Protect Ontario Account Investment Fund” aims to attract up to $4 billion from pension funds and private capital for long-term economic priorities. The province is also putting $107 million over three years into its Critical Technology Initiatives Program, alongside a new AI strategy expected this summer.
What the Opposition Said
NDP Leader Marit Stiles called it “stale announcements, more cuts and a missed opportunity.” Her caucus is pointing to what it characterizes as reductions across education (nearly $150 million), colleges and universities ($69 million), housing ($347 million), and job creation and training ($486 million). Whether those figures represent cuts to planned spending or cuts to current spending is the kind of distinction that tends to get lost in budget day messaging, but the NDP’s numbers are not invented.
NDP MPP Jessica Bell went further, noting that Ontario is “on track to have a $500-billion deficit” (she means net debt, not deficit, but the underlying point about trajectory is accurate).
Liberal Parliamentary Leader John Fraser called it a budget from a government that’s “out of ideas after eight years in power.” Liberal MPP Stephanie Bowman ran through a list of broken commitments: a middle-income tax cut that never arrived, hallway health care that got worse, and a manufacturing jobs promise that has gone the other direction. Nine thousand fewer manufacturing jobs in Ontario than when that promise was made, by her count.
The government’s response to all of this is essentially: tariffs changed everything. That is partially true. But Ontario’s deficit was widening and its balance targets were slipping before Donald Trump’s second term began.
The reserve fund growing from $1.5 billion to $2.5 billion by 2028-29 is the most honest signal in the document: the province does not know what comes next, and it’s budgeting accordingly.
Sources and verification: Key fiscal figures, including the $13.8 billion deficit, $485 billion net debt, and $244.2 billion total spending, are drawn from official Ontario budget documents at budget.ontario.ca/2026 and confirmed by CBC News, BNN Bloomberg, and the Globe and Mail (all March 26, 2026). Opposition quotes are sourced from CBC News and CP24 coverage of budget day reactions. The Ontario Hospital Association’s $2.8 billion stabilization figure comes from CBC News reporting; readers should verify the current OHA position directly. The 40,000 job loss figure in auto, steel and aluminum is cited in Global News coverage of the budget. Unemployment and GDP projections are from the budget document itself and should be checked against any subsequent fiscal updates.
Track Ontario budget votes and MPP spending positions with Ontario Pulse at ontariopulse.ca.