Ontario Raises Deficit Projection to $16.9 Billion Amid U.S. Tariffs
Finance Minister Peter Bethlenfalvy raised Ontario's deficit projection to $16.9 billion, citing U.S. tariffs and global instability as primary drivers of the fiscal decline.
Ontario Finance Minister Peter Bethlenfalvy tabled a Fall Economic Statement on October 29, 2026, revealing a revised deficit projection of $16.9 billion for the current fiscal year. This figure exceeds the $13.8 billion estimated in March and surpasses the province's previous pandemic-era record of $16.4 billion. The fiscal deterioration is driven by U.S. tariffs on the steel, automotive, and manufacturing sectors, as well as higher energy prices resulting from the U.S.-Iran war.
In response to these pressures, the province cut its real GDP growth forecast for the year in half to 0.5 per cent and pushed its target for a balanced budget back to 2029-30, the fourth such delay since 2024. To mitigate risks, the government added $3.8 billion to its contingency fund and announced $8 billion in tax relief for business capital investments. Additionally, the province and Prime Minister Mark Carney committed $8.7 billion to a joint action plan supporting tariff-hit industries and mining infrastructure, following investment delays from Honda, Volkswagen, and Stellantis.
Opposition leaders criticized the government's fiscal management. NDP Leader Marit Stiles described the deficit as "shameful" and urged the government to cut cabinet spending. Green Party Leader Mike Schreiner proposed a wealth tax on the province's richest citizens to fund affordability measures. Bethlenfalvy defended the spending, stating that while he does not like deficits, they are necessary in the current protectionist global environment.
