Ontario Premier Doug Ford, bottom right, shakes hands with Finance Minister Peter Bethlenfalvy, left, after he provided an economic update, which serves as a mini budget at Queen's Park in Toronto, on Oct. 30, 2024.Nathan Denette/The Canadian Press
Ontario Premier Doug Ford says the budget his government is unveiling on Thursday will boost spending on infrastructure to stimulate the economy in the face of U.S. tariffs, instead of cutting expenses to balance the books.
His Finance Minister, Peter Bethlenfalvy, will reveal the state of the province’s finances for the first time since the winter election campaign that saw the Progressive Conservatives pledge billions in economic relief for businesses affected by the tariffs.
Mr. Bethlenfalvy said this week that the spending plan will tackle the immediate threat to jobs and businesses from the tariffs that have hit Ontario’s auto, steel and aluminum producers. But he also said it will lay out longer-term plans to boost growth and the province’s self-sufficiency.
Ontario’s budget will land amid uncertain predictions about the ultimate impact of U.S. President Donald Trump’s trade war on the economy − and its effects on provincial tax revenues.
“We can always balance in a year or two,” Mr. Ford said on Wednesday, referring to his province’s budget deficit.
“What scares me are governments that go in there and start slashing and burning. We’ve never done that, we never will.” (His government’s first budget, in 2019, was criticized for spending cuts to public health and other areas, some of which Mr. Ford later reversed.)
Speaking to reporters, Mr. Ford also said he believes that Mr. Trump, who recently announced a pause on the U.S. trade war with China and a deal on tariffs with Britain, could make an agreement with Canada “hopefully within the next month.”
Mr. Ford’s government has already rolled out some of its budget moves in recent days, including expanding a tax credit for manufacturers, and fulfilling election promises to make an existing cut to gas taxes permanent and to scrap tolls on the publicly owned portion of Highway 407.
In making his appeal to Ontario voters earlier this year, Mr. Ford pledged $11-billion in tariff-related relief for businesses, most of it made up of six months of deferrals on certain provincial taxes. He enacted that move in April after his re-election, with Mr. Trump’s tariffs taking effect.
A senior government source confirmed Wednesday that the budget will also expand the Premier’s push to rip out Toronto bike lanes over city objections, adding those on Queen’s Park Crescent and Avenue Road to the ones Mr. Ford has already vowed to erase. A temporary court injunction pending a ruling in a constitutional challenge launched by a cycling group has delayed his plan to remove bike lanes on Bloor Street, Yonge Street and University Avenue.
The Globe and Mail is not identifying the source who is not authorized to speak publicly about the budget.
Ontario’s spring budget, which was supposed to be unveiled before March 31, is being released later than usual this year because of Mr. Ford’s snap election on Feb. 27. The campaign saw his PCs re-elected with a third majority government on a slogan to “protect Ontario,” in the shadow of Mr. Trump’s threatened across-the-board tariffs.
Other provinces issued budgets earlier this year, when the impact of Mr. Trump’s tariff threats was harder to gauge.
In March, B.C. projected a record deficit of $10.9-billion based on pre-tariff economic predictions, while warning of anemic growth that would further slash its revenues and worsen that bottom line. Still, the province’s NDP government pledged to boost sending on social programs, health care and education.
Alberta said in February that it expected a $5.2-billion deficit, instead of a $5.8-billion surplus, as it faces the trade war and sagging oil prices. But its United Conservative Party government still pledged a tax cut.
Quebec, hard-hit by tariffs on its large aluminum sector, tabled a budget in March predicting a record $13.6-billion deficit but pledging billions in new infrastructure spending. The plan, which prompted a credit-rating downgrade from ratings agency S&P Global, doesn’t project balanced books until 2029-30.
In its fall economic statement in November, Ontario had expected a relatively small $1.5-billion deficit in fiscal 2025-26, and a surplus of $900-million in 2026-27. But these numbers were based on estimates of economic growth before Mr. Trump’s tariffs were imposed on Canada.
Meanwhile, unemployment in Ontario hit 7.8 per cent last month, the highest rate since the pandemic and second among Canada’s provinces only to Newfoundland and Labrador.
Former Ontario chief economist Brian Lewis says a weakened economy could have a large impact on the government’s spending plans and its projections for balanced books.
“The economic growth forecast has come down, which means slower growth and employment and jobs and incomes and business profits − which means lower revenues,” he said in an interview. “People will be spending less than they would have thought.”
Opposition leaders called for more spending on hospitals and schools. Liberal Leader Bonnie Crombie pushed for a tax cut. NDP Leader Marit Stiles said Mr. Ford needs to drop “vanity projects” such as his Highway 401 tunnel concept and his plan to put a foreign-owned spa on Toronto’s waterfront.
Lana Payne, national president of Unifor, Canada’s largest private-sector union, called on the government to provide capital and operational funding for companies in the face of auto-job losses and recent word that Japanese carmaker Honda was pausing plans for new Ontario plants.