2025 Ontario Budget Analysis
Government’s Narrative: Fortress Ontario
Ontario's 2025 Budget, titled "A Plan to Protect Ontario", is tabled against the backdrop of economic uncertainty triggered by U.S. tariffs. Finance Minister Peter Bethlenfalvy's budget outlines total expenses of $232.5 billion in 2025-26. The province is projecting a budget deficit of $14.6 billion in 2025-26 and $7.8 billion in 2026-27, with a path to balance remaining in sight as the government forecasts a modest surplus of $0.2 billion in 2027-28.
This year’s budget doesn’t just acknowledge the tariff threat, it leans into it, casting the province as a fortress of self-reliance and industrial grit. The Ford government has presented a plan that includes significant spending commitments to ease the economic pain felt by businesses and workers. With over $11 billion in immediate supports for businesses, tax deferrals, and new funding pools, the government is flooding the system with cash cushions to soften the tariff blow. The political message? We are not just absorbing the hit. We’re building an Ontario that doesn’t flinch.
Mining Momentum
Where this budget really flexes is its bid to position Ontario as a modern, resilient economy that can withstand global volatility. The first target: doubling down on the province’s natural resource play: $500 million in a new Critical Minerals Processing Fund, plus building on the regulatory changes the government is making intended to streamline project approvals.
Betting Big on AI
The budget recognizes the importance of emerging technologies like AI. Ontario is investing $107 million through its Critical Technologies Initiative to strengthen AI, quantum computing, and cybersecurity. This includes support for the Vector Institute, new AI hubs, and expanded advanced research computing capacity. This acknowledges the province’s alignment with the majority of the global community, not just in economic terms but also flexing its sovereignty over emerging tech.
From Petri Dish to Powerhouse
Building on previous success, phase 2 of Ontario’s Life Sciences Strategy brings a $146 million to boost commercialisation, clinical trials, medical isotopes, and innovation hubs. This could continue the province’s charge to be more competitive globally in vaccine production, therapeutics, and next gen health tech. The government is also investing an additional $15 million to renew the Life Sciences Innovation Fund for three years to support companies as they transform innovative investments from conceptual stages to commercialization.
Docs on Deck
Speaking of strides in healthcare, the budget aims to shore up Ontario’s healthcare system, both on the front lines and behind the scenes. With more than $2.1 billion earmarked to connect every Ontarian to a primary care provider, the Ford government is making good on its campaign promise to tackle one of the province’s most urgent public health challenges. To support this effort, teaching clinics, in partnership with medical schools, will receive in investment of $300 million to train more family doctors to increase primary care team capacity. The two go hand in hand: you can’t expand access without expanding the workforce.
Getting Workers Working Everywhere
Labour mobility, a chronic pain point for many provinces and the skilled workers trying to move between them, is finally getting meaningful attention. The budget’s introduction of “As of Right” rules aims to eliminate duplicative licensing requirements for regulated professions. In a country where regulation fragmentation is often a bureaucratic nightmare, this is a tangible step to breaking down interprovincial barriers and getting people in employment, where and when it’s needed, faster. While the Skills Development Fund is getting a fresh $1 billion (bringing it to $2.5 billion total), what’s really notable is the province’s understanding that solving the workforce crisis require more than just training, it demands systemic change. This means $750 million in new STEM seats across colleges and universities, pinpointing a hunger to retain the province’s homegrown tech talent.
Ford’s Foot on the Gas
In many ways, this budget is Ford Nation at full throttle. Urgent, unapologetic and packed with supports for sectors facing immediate pressure, and rightfully so. It’s a budget that has been designed to project economic control in the face of turmoil, while checking off key political boxes promised during the recent provincial election. However, for all its strategic signalling, the tension between short-term insulation and long-term transformation remains. Ontario needs to double down on execution. Infrastructure can be built, clinics can be staffed, but the real challenge of making billions work is solving deep structural issues, not just surviving political or economic shock.
By the Numbers
The 2025 Budget contains a number of significant spending commitments aimed at economic resilience and protection:
Immediate Relief for Tariff-Impacted Businesses: The government is providing approximately $11 billion in immediate relief:
Six-month deferral of select provincially administered taxes, providing $9 billion in cash flow support for Ontario businesses and job creators.
An additional $2 billion in Workplace Safety and Insurance Boar (WSIB) rebates in and reduces WSIB premiums.
Protecting Ontario Businesses: Creation of the $5 billion Protecting Ontario Account to provide critical support to businesses facing tariff-related disruptions.
Critical Minerals and Resource Development: The budget commits $500 million to a new Critical Minerals Processing Fund, with the goal of ensuring minerals mined in Ontario are processed in Ontario. This is complemented by significant regulatory changes to accelerate mining approvals, including a new “One project, One Process” approach for major resource development projects, particularly targeting the Ring of Fire region.
Indigenous Economic Partnerships: the government is tripling loan guarantees for Indigenous communities from $1 billion to $3 billion, expanding the Indigenous Participation Fund by $70 million, and providing $10 million for scholarship opportunities for First Nations students interested in resource development careers.
Manufacturing Support: The Ontario Made Manufacturing Investment Tax Credit is being enhanced and expanded, increasing the rate for Canadian-controlled private corporations for 10 per cent to 15 per cent and extending eligibility to non-CCPCs. This represents $1.3 B billion in additional support over three years.
Skills Development: An additional $1 billion investment in the Skills Development Fund (bringing the total to $2.5 billion) to support training programs and facilities across the province.
Capital Plan: The budget reinforces the governments commitment to its 10-year, $200+ billion infrastructure plan, including nearly $30 billion for highways, $61 billion for transit projects, $56 billion for health infrastructure, and $30 billion for schools and childcare spaces. The government is providing an additional $5 billion to the Building Ontario Fund to support priorities infrastructure such as long-term care, energy, and affordable housing. The budget also adds an additional $400 million to the Housing-Enabling Water Systems Fund.
Several smaller, but notable initiatives in the budget include:
Fertility Treatment Tax Credit: A new refundable tax credit providing 25% support on eligible fertility treatments expenses up to $20,000, for a maximum credit of $5,000 per year.
Ontario Grape Support Program: $35 million annually over five years to support Ontario's grape and wine industry, alongside extending the VQA Wine Support Program with enhanced eligibility.
Permanent Gasoline and Fuel Tax Cuts: Making permanent the previously temporary cut to gasoline tax (5.7 cents per litre) and fuel tax (5.3 cents per litre).
Highway 407 East Toll Removal: Permanently removing tolls from the provincially owned Highway 407 East.
Eliminating the Tax on Propane for use in Road Vehicles: Regulatory amendments to eliminate the tax on propane used in licensed road vehicles.
Shortline Railway Support: A new temporary Ontario Shortline Railway Investment Tax Credit providing 50% refundable corporate tax credits on eligible track maintenance expenditures.
Research Funding: An additional $207 million over three years for the Ontario Research Fund's Research Infrastructure program.
Hydrogen Innovation: $30 million for a new round of the Hydrogen Innovation Fund to support clean energy development.
Shipbuilding Industry: $200 million for the new Ontario Shipbuilding Grant Program to support skills training, equipment purchases, and infrastructure improvements.
New Police Helicopters: $57 million for two new H135 helicopters to support the Niagara Regional Police Service and the Windsor Police Service with increased patrols and to strengthen enforcement at entry points at the Canada-U.S. border.
Cutting taxes on alcohol: Reducing the spirits basic tax from 61.5 per cent to 30.75 percent and reducing the beer basic tax rate for certain beer made by Ontario mictrobrewers to 17.98 cents per litre and 19.88 cents per litre for draft and non-draft beer respectively. Ontario is also cutting the Liquor Control Board of Ontario Mark-up Rate for cider, and spirit- and wine-based ready-to-drink beverages.
Opposition Reaction
Ontario NDP leader Marit Stiles and Shadow Minister for Finance Jessica Bell, were quick to criticize the government’s plan, calling it a “band-aid budget,” and a “missed opportunity,” to strengthen Ontario. In particular, the NDP is taking aim at the budget’s lack of new funding for public education, a plan to keep jobs in Ontario, and a collapse in new housing starts. Bonnie Crombie’s Liberals, meanwhile, say the budget “doesn’t address the crisis in healthcare, education and housing.”
What’s Next
The Ford Government’s 2025 Ontario Budget signals a significant strategic shift in the province's economic positioning, moving away from U.S. markets and toward greater self-reliance and diversification. This is both an immediate response to trade tensions and a longer-term recalibration of Ontario's economic strategy.
The Ontario legislature is adjourned until Monday, May 26. When MPPs come back expect to see the PC government fast track the passage of the budget and any additional priority legislation before the legislature rises for the summer by June 5. That said, the government will be busy implementing the plan laid out in the budget before the Ministry of Finance, Premier’s Office and Treasury Board turn their attention to the Fall Economic Statement.
At New West Public Affairs, we’re here to help you make sense of Ontario’s 2025 Budget and explore how your organization can thrive in this evolving landscape. Let’s connect.
