Ontario Budget 2026
What You Need to Know.
March 26, 2026
Scene Setter
Ontario’s 2026 budget is a careful document – perhaps more careful than the premier is used to.
The variable is Ford himself.
At his best, the premier is a disciplined, focused leader who picks a lane and stays in it. Voters have rewarded that version of him twice at the ballot box since Ford’s initial victory in 2018. The concern today is that without a crisis like COVID or the immediate threat of Trump tariffs to anchor him, the premier risks drifting back toward the reactive mode that defined the government’s early years.
This budget reflects Minister Bethlenfalvy’s long-term instincts more than Ford’s impulse for immediate wins. The program review echoes the Carney government’s bang-for-buck approach, which Bethlenfalvy will tout as ensuring money is spent effectively. It does, however, open the door to criticism of programming cuts that the government has largely avoided over the past six years. The HST rebate expansion is a genuine affordability win, but it stands largely alone in terms of cost-of-living measures.
The budget signals that the government knows what it wants to build – as witnessed by the premier’s recent comments on the Metro Toronto Convention Centre and Billy Bishop Airport. Whether Ford can project discipline and momentum from a document that asks voters to trust the process is the central question.
For clients, the long-term policy signals are stable and legible. The political environment around them is considerably less so.
— Adam Yahn, Partner
Analysis
The centrepiece affordability measure is a temporary rebate on the full 8% provincial portion of the HST for eligible buyers of new homes valued up to $1 million. The federal government committed to matching the measure. This means eligible buyers could receive up to $130,000 in combined HST relief, with the maximum rebate available for homes valued up to $1.5 million.
The full HST cut surpasses the fall change that was limited to first-time home buyers – a decision the Premier criticized at the time for falling short. It also has long been an ask for the market housing industry. On affordability beyond housing, the budget points to the government’s track record instead of introducing new measures. This is a vulnerability the opposition will undoubtedly seize upon.
— Bryce McRae, Senior Consultant
Premier Ford is playing nice as he works in tandem with Prime Minister Carney’s federal government on the housing tax cut. The cooperation between the two levels of government means maximum benefit for homebuyers and is a tangible win for the PCs.
— Alyssa Bishop, Research Manager and Consultant
The government is proposing to cut the small business corporate income tax rate from 3.2% to 2.2% effective July 1, 2026. It is also establishing a $4B Protect Ontario Account Investment Fund to attract pension funds and private capital; and, introducing accelerated capital cost allowances to lower the cost of business investment.
The government is betting big on the growth of AI and defence companies in Ontario. The Protect Ontario Account Investment Fund is a massive pool of capital to seed and scale-up these critical sectors with the hopes that these investments translate into additional government revenues down the line.
— Adam Yahn, Partner
After spending the last fourteen months mitigating the damage caused by U.S. tariffs, the Ford government is moving beyond damage control. It has now set its sights on addressing Ontario’s softening economic outlook. Tax cuts and new funding to attract investment will be welcomed by businesses of all sizes.
— Josie Sabatino, Vice-President
The government is conducting a review of existing programming as part of its fiscal consolidation. It’s projecting deficits of $13.8B in 2026-27 and $6.1B in 2027-28, before returning to a $0.6B surplus in 2028-29.
This budget has Bethlenfalvy’s fiscally restrained fingerprints throughout. He’s tried to prepare the treasury for a substantial amount of infrastructure spending to come. The politics of spending cuts has rarely gone smoothly for governments trying to implement them. The Carney government is a recent example, and the Ford team likely remembers the 2018-19 days all too well.
— Bryce McRae, Senior Consultant
With ongoing cost-of-living issues, U.S. tariffs, and now the rising cost of fuel, a review of existing programming is a logical next step. The question will be whether Ford’s government will be able to frame the cuts in a way Ontarians can get behind.
— Alyssa Bishop, Research Manager and Consultant
Health spending reaches $101B, up from $60B when the government took office. New this budget: $3.4B in primary care funding, a $1.1B increase for home and community care, a 4% hospital base funding increase, and $124M for 2,000 new RN seats and 1,000 new RPN seats. Education also funding grows from $38.5B to just shy of $41B.
The reliance on physical school construction and direct, targeted measures like the Classroom Supply Card are perfect examples of this government’s playbook. They are tangible and easy to sell politically. They are also an attempt to neutralize the inevitable criticism from opposition parties regarding education funding.
— Adam Yahn, Partner
Despite Minister Bethlenfalvy’s characterization of current healthcare funding as both “unprecedented” and “unsustainable,” the Ford government has strategically identified this as a high-stakes sleeper issue. Prioritizing political optics over fiscal discipline, the budget introduces targeted spending measures to neutralize anxiety among voters who consistently view healthcare as a top ballot issue.
— Josie Sabatino, Vice-President
— HST CUT CARRIES THE DAY The centrepiece affordability measure is a temporary rebate on the full 8% provincial portion of the HST for eligible buyers of new homes valued up to $1 million. The federal government committed to matching the measure. This means eligible buyers could receive up to $130,000 in combined HST relief, with the maximum rebate available for homes valued up to $1.5 million.
Bryce McRae, Senior Consultant: The full HST cut surpasses the fall change that was limited to first-time home buyers – a decision the premier criticized at the time for falling short. It also has long been an ask for the market housing industry. On affordability beyond housing, the budget points to the government’s track record instead of introducing new measures. This is a vulnerability the opposition will undoubtedly seize upon.
Alyssa Bishop, Research Manager and Consultant: Premier Ford is playing nice as he works in tandem with Prime Minister Carney’s federal government on the housing tax cut. The cooperation between the two levels of government means maximum benefit for homebuyers and is a tangible win for the PCs.
— A BUSINESS GROWTH AGENDA WITH TEETH The government is proposing to cut the small business corporate income tax rate from 3.2% to 2.2% effective July 1, 2026. It is also establishing a $4B Protect Ontario Account Investment Fund to attract pension funds and private capital; and, introducing accelerated capital cost allowances to lower the cost of business investment.
Adam Yahn, Partner: The government is betting big on the growth of AI and defence companies in Ontario. The Protect Ontario Account Investment Fund is a massive pool of capital to seed and scale-up these critical sectors with the hopes that these investments translate into additional government revenues down the line.
Josie Sabatino, Vice-President: After spending the last fourteen months mitigating the damage caused by U.S. tariffs, the Ford government is moving beyond damage control. It has now set its sights on addressing Ontario’s softening economic outlook. Tax cuts and new funding to attract investment will be welcomed by businesses of all sizes.
— TIGHTENING THE FISCAL BELT The government is conducting a review of existing programming as part of its fiscal consolidation. It’s projecting deficits of $13.8B in 2026-27 and $6.1B in 2027-28, before returning to a $0.6B surplus in 2028-29.
Bryce McRae, Senior Consultant: This budget has Bethlenfalvy’s fiscally restrained fingerprints throughout. He’s tried to prepare the treasury for a substantial amount of infrastructure spending to come. The politics of spending cuts has rarely gone smoothly for governments trying to implement them. The Carney government is a recent example, and the Ford team likely remembers the 2018-19 days all too well.
Alyssa Bishop, Research Manager and Consultant: With ongoing cost-of-living issues, U.S. tariffs, and now the rising cost of fuel, a review of existing programming is a logical next step. The question will be whether Ford’s government will be able to frame the cuts in a way Ontarians can get behind.
— SHIELD ISSUES Health spending reaches $101B, up from $60B when the government took office. New this budget: $3.4B in primary care funding, a $1.1B increase for home and community care, a 4% hospital base funding increase, and $124M for 2,000 new RN seats and 1,000 new RPN seats. Education also funding grows from $38.5B to just shy of $41B.
Adam Yahn, Partner: The reliance on physical school construction and direct, targeted measures like the Classroom Supply Card are perfect examples of this government’s playbook. They are tangible and easy to sell politically. They are also an attempt to neutralize the inevitable criticism from opposition parties regarding education funding.
Josie Sabatino, Vice-President: Despite Minister Bethlenfalvy’s characterization of current healthcare funding as both “unprecedented” and “unsustainable,” the Ford government has strategically identified this as a high-stakes sleeper issue. Prioritizing political optics over fiscal discipline, the budget introduces targeted spending measures to neutralize anxiety among voters who consistently view healthcare as a top ballot issue.
Hidden Details
- The budget includes $300M over six years to help meet the needs of growing communities by supporting the repair, upgrade or construction of new sport and recreation facilities.
- The Ontario government announced it will introduce legislation that, if passed, will see it provide compensation for assuming provincial ownership of the City of Toronto’s lands around the Billy Bishop Airport. This will be alongside other responsibilities in a tripartite agreement with the Toronto Port Authority and the federal government.
- The province has quietly launched a competitive process to select a private-sector General Partner to manage the $4B Protect Ontario Account Investment Fund. The Province of Ontario would act as a Limited Partner. The selection is already underway with no public RFP, no disclosed timeline, and no published criteria.
- Hidden by the HST cut are ongoing discussions with the federal government regarding a fund for municipalities to access in exchange for reductions in development charges. This would effectively create a potential Housing Accelerator Fund 2.0.
- Despite the political benefit gained by the Skills Development Fund, the scandal surrounding it is inevitably to blame for its failure to receive even a single mention in Budget 2026. Added to this is a base budget cut of $47M (or 16%) at the Ministry of Labour, Immigration, Training and Skills Development.
- With the CUSMA review beginning this year, maintaining only $1.5B in reserve and an additional $1.5B in contingency against a $13.8B deficit is a thin cushion. The government is taking a calculated risk that trade negotiations won’t sour or tariff conditions deteriorate beyond the budget’s assumptions.
Strategic Roadmap
Budget policy becomes law through legislation or existing statutory spending power granted to the government. Legislative changes can be packaged together in a budget measures bill, which provides an opportunity for stakeholders to engage on the government’s flagship policies.
Ontario’s economy has a big impact on federal finances. We expect the spring economic statement to signal updates to Ottawa’s economic plan and an accounting of the country’s fiscal situation and growth picture.
Stakeholders should continue to engage with the government during the rollout of the budget bill and over the summer in the lead-up to the fall economic statement.
While the minister of finance faces a financial penalty if the Fall Economic Statement is delivered after November 15, 2026, the province is likely to wait for the federal government to deliver its own fall projections – particularly in the absence of a budget this spring – to inform Ontario’s planning.
By the Numbers
Projected Deficit
$13.8B
Program Spending
$227B
Net Debt-to-GDP Ratio
37.7%
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Click here to view the complete budget documentation.