Ontario must prepare for ‘tougher times’ ahead, finance minister says before budget
Written by The Canadian Press on March 25, 2026
TORONTO — Ontario should be prepared for “tougher times” amid global economic disruption, but the government won’t slash public sector jobs to buttress the budget amid uncertainty, the finance minister is signalling ahead of Thursday’s fiscal update.
Other provinces have recently braced against the economic headwinds by forecasting record deficits, raising taxes and cutting front-line jobs, but that will not be Ontario’s approach, Peter Bethlenfalvy says.
“The world has changed — and Ontario must be ready for what change may bring, even if that means being prepared for tougher times,” he said in a pre-budget speech earlier this month.
“As a government, we cannot eliminate uncertainty, but we can mitigate risks with a responsible, balanced fiscal approach that supports public services and infrastructure while maintaining flexibility.”
In that speech, he twice mentioned delivering government programs “efficiently and sustainably,” words that are sometimes used by politicians to signal belt tightening.
“I think it reflects the fact that we’ve got to make sure that the money, the significant investments we’re making in social services, health care, education, gets to the workers who are providing, whether it’s a social worker or a health-care worker or a teacher, and making sure all the money just doesn’t flow to administration,” he said Wednesday in an interview.
Ontario has already tasked hospitals with coming up with a three-year plan to balance their budgets, in a bid to get a handle on growing deficits in the sector, using an assumption of getting two per cent annual funding increases. That is half of the increase they received the previous year.
Some hospitals have already started making some “lower risk” cuts under that plan, the Ontario Hospital Association has said. The province would need to add about $2.7 billion to meet the full operating needs of the hospital sector, the association has said.
The province’s deficit, in the most recent fiscal update earlier this year, stood at $13.4 billion. Bethlenfalvy has been silent on whether the path to balance remains the same as his plan in last year’s budget to get into the black in 2027-28.
Balance, however, has been a moving target. The 2027-28 goal is a year later than Bethlenfalvy projected in the 2024 budget, which itself was a year later than he projected in the 2023 budget.
Ontario’s books are in a relatively good position to be able to stay on the province’s path to balance and lower the net-debt-to-GDP ratio, as long as it doesn’t use fiscal breathing room to announce new spending commitments, according to a budget preview from Desjardins.
“When the Government of Ontario releases its 2026 budget on March 26, we think it should capitalize on this tax tailwind by resisting the temptation to materially increase spending, as the federal government and some other provinces have done,” deputy chief economist Randall Bartlett wrote.
“Instead, it should keep some fiscal powder dry to contend with potential future shocks, such as the impending Canada‑United States‑Mexico Agreement (CUSMA) joint review.”
Bethlenfalvy has already announced some new spending ahead of the budget, including an additional $325 million toward primary care and $1.4 billion to cover the province’s share of the HST for some homebuyers.
Premier Doug Ford, along with Bethlenfalvy and Municipal Affairs and Housing Minister Rob Flack, announced Wednesday that Ontario is planning to temporarily expand HST rebates on the purchase of new homes, in a bid to boost a struggling home construction sector.
The government previously introduced rebates for first-time homebuyers on new homes valued up to $1.5 million, with homes valued at $1 million or less qualifying for the maximum amount of $130,000 when combined with a federal rebate.
Ford said that in Thursday’s budget, his government is proposing to expand the rebate for one year, both in terms of qualifying home purchases and not limiting it to first-time homebuyers.
The temporary measure would see homes valued up to $1.5 million qualify for the maximum $130,000, decreasing proportionally to homes valued at $1.85 million, which would qualify for $24,000.
“My message to everyone from the building sector here today is very simple: start building,” Ford said at a press conference.
“To the great people of this province, if you’re in the position to buy a new home, no matter if it’s a condo or town home or a detached home, please get everything together. You have one year to see this $130,000 reduction in cost. Please go out there, talk to your bankers and start buying the homes.”
The province says the federal government is covering the five per cent federal portion of the HST, in a move Ontario says would provide nearly $2.2 billion in tax relief for housing in Ontario.
The Ministry of Finance estimates the measure will spark an additional 8,000 housing starts, at a time when the most recent government projections show the province building 70,000 new homes this year, far off the pace needed to meet a goal of 1.5 million homes in 10 years.
Bethlenfalvy a few months ago called that a “soft” target.
This report by The Canadian Press was first published March 25, 2026.
Allison Jones, The Canadian Press