Ontario Projects $16.9 Billion Deficit, Pushes Balanced Budget Target to 2029-2030
Ontario Finance Minister Peter Bethlenfalvy released a fall economic statement forecasting a $16.9 billion deficit for the 2026-2027 fiscal year, up from the previous estimate of $13.8 billion. The province cited U.S. tariffs and global instability as key factors and delayed its balanced budget target to 2029-2030.
Ontario Finance Minister Peter Bethlenfalvy released the province's fall economic statement on Thursday afternoon, projecting a deficit of $16.9 billion for the 2026-2027 fiscal year. The figure is significantly higher than the previously forecasted deficit of $13.8 billion. The last fiscal year ended with a $13 billion deficit.
U.S. tariffs targeting the steel, auto, and manufacturing sectors were cited as a primary reason for the larger budget hole. Global conflicts, specifically regarding the Strait of Hormuz, have also impacted energy prices and contributed to broader economic instability. These pressures are expected to result in rising gas prices and inflated costs of goods.
In response to the deteriorating fiscal outlook, the timeline to balance the province's finances has been pushed back to the 2029-2030 fiscal year. This marks the fourth time since 2024 that Premier Doug Ford's government has delayed its budget-balancing target by a year. To address ongoing uncertainties affecting families and businesses, Ontario added $3.8 billion to its contingency fund this year, bringing the total fund size to $4.9 billion.
The economic statement also included updated projections for housing starts, which are expected to decrease slightly to 64,700 this year, down from 65,400 in 2025. Housing starts are projected to recover in subsequent years, reaching 71,700 in 2028 and 75,400 in 2029.
Opposition parties criticized the fiscal update. NDP Leader Marit Stiles called the ballooning deficit an "admission of failure" and criticized the lack of affordability measures while spending increases.