Ontario’s 2026 budget: Tax cuts for small businesses, failing grade from opposition

The Ontario government unveiled its spring budget Thursday – featuring tax cuts for small businesses and a new $4 billion fund to spur economic growth in the province.

But those promises are also paired with a higher than expected deficit, pushing back the plan to balance the books by another year, as the government says geopolitical change has reached Ontario shores.

The opposition gave Premier Doug Ford a failing grade on today’s budget, saying it does nothing to help everyday Ontarians to better afford groceries and housing.

“The last year has been marked by significant change in the world around us. And while our province has been meeting these challenges head on, we need to recognize that Ontario does not operate in isolation … because geopolitical forces that may have once felt distant have now reached our shores,” said Peter Bethlenfalvy, Ontario finance minister.

Bethlenfalvy laid out his government’s eighth spring budget Thursday, saying his focus is on creating a resilient Ontario as American tariffs and war in the Middle East cause uncertainty.

It’s that uncertainty that Bethlenfalvy pointed to when explaining the sharp increase in the province’s deficit.

“Of course I’d prefer to have a smaller deficit, I’d prefer to balance sooner. But we have to live in the world we’re in, and we now have many challenges in front of us,” said Bethlenfalvy.

Ontario is now projected to be $13.8 billion in the red in 2026-27, far above the $7.8 billion it was previously expected to hit. That also means the province will push its goal of balancing the books back an extra year, now in 2028-29.

Some of that spending includes a proposal to cut small business corporate income tax from its current 3.2 per cent to 2.2 per cent starting July 1 — something the opposition and business groups have been asking for. The government says it would cost them $1.1 billion over the next three years.

READ MORE: Ontario to boost home care funding, may miss long-term care bed goal

While uncertainty looms in today’s budget, the numbers also show an Ontario that fared better than expected in 2025 in the face of U.S. President Donald Trump’s tariffs.

The ministry says Ontario’s trade with the U.S. is only slightly down, and that Ontario actually ended 2025 having increased its global exports.

But that doesn’t extend to all sectors – Ontario is still seeing job losses in industries like auto, something that the official opposition finds concerning.

The Ontario NDP today gave Premier Doug Ford failing grades across the board.

The opposition says the budget’s investments in education, $1.1 billion to health care and $186 million in a boost to autism support all fell short of what each sector says it needs.

“The Ontario Hospital Association has said they’re well short of what was needed just to maintain current levels of service. We have people right now in our hospital hallways,” said NDP opposition leader Marit Stiles.

In our region, the budget also outlines spending on the previously announced Destination Niagara plan, and says the next steps include a new ferris wheel, revitalizing the marina and exploring a theme park and a tram.

READ MORE: Ontario 2026 budget highlights: $13.8B deficit, small business tax cut, AI funding