Ontario budget: U.S. tariffs, uncertainty, mean a weaker Ontario economic outlook

The impact and threats of tariffs from the United States weighs heavily, as expected, on the 2025 Ontario budget.

Heightened uncertainty from unpredictable and punishing American trade action is expected to negatively impact the Ontario economy so the provincial government said today it is taking a number of steps to attempt to protect Ontario communities.

“There is no sugar coating the situation we find ourselves in,” said Finance Minister Peter Bethlenfalvy in the Legislature today.

And because of this, the province has outlined a “slower growth scenario”. While the expected provincial deficit is expected to come in at $6 billion in the current fiscal year, the 2025-26 deficit is predicted by the province to balloon to a whopping $14.6 billion, before falling back to $7.8 billion in 2026-27.

Real economic growth is expected to slow over the next two years, but the province introduced some new measures to help businesses, including some for the Golden Horseshoe.

The province announced today the “Creating the Protecting Ontario Account,” a fund of up to $5 billion to help businesses facing liquidity problems due to tariffs and have no other sources of funding.

The province will also add another $1 billion over the next three years in the Skills Development Fund Capital and Training Streams, bringing the total funding commitment to $2.5 billion.

It also said it will triple the total amount of loan guarantees through the Indigenous Opportunities Financing Program to $3 billion and expand eligibility to include projects in energy, pipelines, mining and critical minerals.

Also introduced was new help for the Ontario wine sector including:

• The Ontario Grape Support Program, which will give up to $35 million in annual support to eligible wineries over five years, beginning in 2025-26 until 2029-30, with total program funding amounting to $175 million.
• An extension of the VQA Wine Support Program until 2029-30, allowing the program to include Ontario ice wines, expanding the total support to $84 million in annual support, with total program funding amounting to $420 million over the next five years.
• A new Wine Boutique Support Program will provide up to $16.7 million over five years, beginning in 2025-26 until 2029-30. It will support capital expenses for off-site winery retail stores that re-locate into grocery stores.

More to come on the Evening News at Six and chch.com.