The Government of Ontario, Canada’s most populous province, is projecting that its deficit for the coming year will nearly double to $13.8 billion amid ongoing economic shocks.
Due to U.S. tariffs on Canadian goods and now rising energy prices caused by the war in Iran, Ontario’s budget deficit is expected to rise from $7.8 billion in the province’s last budget.
The deficit projection was included in Ontario’s new $244.2 billion budget, which includes $101.2 billion for health care and $40.8 billion for education.
The government of Ontario Premier Doug Ford said it expects to return to a balanced budget by 2028-29, with a surplus of $600 million.
Ontario continues to project sluggish economic growth, with gross domestic product (GDP) expected to rise by 1% in 2026, 1.7% in 2027, and 1.8% in 2028.
Overall, government revenue is down by around $100 million, mainly due to lower revenue from liquor sales that are controlled by the province.
Ontario’s net GDP-to-debt ratio for 2026-27 is projected at 37.7%, slightly lower than the 38.9% projected in last year’s budget.
The government’s net debt in the latest budget stands at $485 billion, a number expected to surpass half-a-trillion dollars in 2027-28.
The centrepiece of the budget was a pledge to temporarily remove the Harmonized Sales Tax (HST) from the cost of new homes.
The HST suspension will save homebuyers a maximum of $130,000 on homes valued at up to $1.5 million.
