U.S. President Donald Trump’s tariffs cast a pall over Ontario’s budget Thursday, dragging down GDP growth and knocking the province off its path to balance, with a $14.6-billion deficit projected this year.
Finance Minister Peter Bethlenfalvy says now is the time to invest in infrastructure and job creation in Ontario so the province can come out stronger on the other side.
The province had previously eyed a balanced budget for 2026-27, but that came before the election of Trump and the implementation of tariffs and now Ontario is set to inch into the black in 2027-28 with a small surplus.
In the meantime, Bethlenfalvy’s budget is forecasting a $14.6-billion deficit this fiscal year up from a projection of $4.6 billion in last year’s budget and a deficit of $7.8 billion next year.
Much of the increased deficit comes from spending to stimulate the economy in the face of tariffs, including a $5-billion fund to give businesses relief, adding $5 billion to an infrastructure financing fund, and implementing a new $500-million Critical Minerals Processing Fund.
Real GDP is projected to rise by just 0.8 per cent next year, as the government says Ontario is among the jurisdictions most exposed to U.S. trade policy.
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Ontario plans to spend hundreds of millions of dollars boosting the province’s alcohol sector, including programs to support grape farmers, wineries, distilleries and craft breweries.
The province will spend $175 million over five years as part of a new program to boost the number of Ontario grapes in blended wine.
The province says the program will eventually double the percentage of Ontario grapes in wine.
The government is also making changes to help support the recently liberalized alcohol marketplace with more than $250 million in measures over two years.
Last year the province liberalized rules on alcohol sales, allowing it to be sold in convenience and grocery stores.
Finance Minister Peter Bethlenfalvy says alcohol modernization has gone “amazing.”
