What to know about Ontario's 2026 budget
· Toronto Sun
Doug Ford’s Progressive Conservative government released their eighth budget on Thursday — a $244.2 billion document centred around small business tax cuts, increased funding to health care and schools, and a tax break for new home buyers.
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Here are the highlights in this year’s budget:
Higher deficit, but a path to a surplus
While last year’s deficit was $2.3 billion less than forecast in the 2025 budget, this year’s deficit projections were set at a whopping $13.8 billion.
That’s also 77% higher than what last year’s budget predicted for this year’s deficit.
During his budget speech on Thursday, Finance Minister Peter Bethlenfalvy said Ontario’s was one of the lowest rates in the country, and said the province’s new fiscal plan places the province on a road to balancing the books in three years — forecasting a $6.1-billion deficit for the 2027-28 fiscal year, and a $600-million surplus for 2028-29.
Bethlenfalvy cited slowing economic growth, tax relief measures, and increased spending for the deficit.
What small businesses can expect
Among the hardest-hit sectors in Ontario — from the pandemic to today’s tariff terror — small businesses can expect some breathing room in the new budget.
Ontario plans to cut the small business corporate income tax (CIT) rate by more than 30%, from 3.2% to 2.2%, a move the Canadian Federation of Independent Business (CFIB) said will benefit 375,000 small businesses in the province — 72% of which are being impacted by U.S. President Donald Trump’s tariffs.
Owners of eligible businesses could see up to $5,000 in annual savings on their CIT payments, with the move expected to provide around $1.1 billion in relief over the next three years.
The changes are set to go into effect on Canada Day.
New home HST tax cut expanded
On the eve of budget day, Ford gave the province an early look at his government’s latest attempt to make home ownership attainable.
Last fall, Queen’s Park unveiled a plan to offer first-time homebuyers a break on the provincial 8% portion of the HST for new homes up to $1 million — but on Wednesday, Ford announced that program would not only be expanded to all buyers of new homes, but thanks to federal funding would now rebate the full 13% HST.
The program would rebate to a maximum of $130,000.
Health-care funding
This year has the province spending $101.2 billion on health care — the largest line item in the 2026 budget.
That includes $1.1 billion set aside in new hospital funding, and the same amount earmarked over three years to grow the province’s home-based health-care delivery system — increasing home care investments to $6 billion and aims to reduce homecare wait lists by 94%.
As well, Budget 2026 plans to increase annual funding for the Ontario Autism Program by $1 billion.
The province will also spend $64 billion over the next 10 years on improving and expanding health infrastructure, a figure which includes $50 billion in capital grants over 50 separate hospital projects — with an aim to open 3,000 new hospital beds across Ontario.
Protect Ontario Account Investment Fund
In an effort to attract investment, the province will spend $4 billion to establish the “Protect Ontario Account Investment Fund” — a means to encourage investors to buy-in to vital sectors in Ontario’s economy, including critical minerals, defence, artificial intelligence, and energy.
“Our strategy is setting the stage for Ontario’s continued economic success in the midst of a changing world,” Bethlenfalvy said during his budget speech.
“And in this changing world, Ontario must change as well.”
The goal is attract “crowd-in” investment from private equity and pension funds to amplify provincial government investment into key areas.
The fund, a key pillar in this year’s budget, is meant to shore up Ontario’s economy to outside influences, and to help lessen the blow to Ontario businesses from U.S. tariffs.