Ontario’s $200 billion budget for 2025 promises to protect jobs and businesses from economic headwinds, including ongoing U.S. tariffs, while increasing investments in infrastructure, manufacturing and workforce training.
Finance Minister Peter Bethlenfalvy tabled the budget at Queen’s Park Thursday, saying the plan is designed to build a more self-reliant provincial economy. The government says it will invest in industries hit hard by foreign trade disruptions while keeping a long-term path to balance by 2027–28.
$5 Billion Contingency Fund for Tariff-Affected Businesses
The province is creating a new “Protecting Ontario Account” worth up to $5 billion. It is designed to provide financial support to businesses struggling with disruptions linked to international tariffs, particularly from the United States. The fund would offer emergency liquidity to companies that have exhausted other funding sources.
Ontario plans to expand its tax credit for manufacturers. The government is proposing to raise the Ontario Made Manufacturing Investment Tax Credit rate from 10 to 15 percent for Canadian-controlled private corporations. For the first time, the province would also make public companies eligible for a 15 percent non-refundable version of the credit.
This change is expected to cost $1.3 billion over three years but aims to encourage more companies to invest in factories, machinery and production capacity within the province.
Another $500 million will be allocated to a new Critical Minerals Processing Fund. The fund will target Ontario’s mining sector, with the goal of ensuring that more raw minerals are processed locally rather than being shipped abroad.
The budget triples the amount of loan guarantees available to Indigenous communities through what’s now called the Indigenous Opportunities Financing Program. The total fund will rise from $1 billion to $3 billion, with expanded eligibility beyond electricity projects to include mining, pipelines and other sectors.
An additional $70 million over four years is earmarked to help Indigenous communities take part in regulatory processes tied to mining and exploration. Another $10 million will go toward scholarships for First Nations postsecondary students pursuing careers in resource development.
Ontario will add $1 billion over three years to its Skills Development Fund, bringing the total to $2.5 billion. The money will help build and upgrade training centres for skilled trades across the province.
Drivers are also expected to see permanent fuel savings. The government plans to make temporary gasoline and fuel tax cuts permanent, saving households an average of $115 per year. Tolls will be removed from Highway 407 East, which could save regular commuters up to $7,200 annually, according to provincial estimates.
The budget outlines more than $200 billion in infrastructure spending over the next decade. In 2025–26 alone, the province plans to spend $33 billion.
Breakdowns include nearly $30 billion for highways, $61 billion for public transit, $56 billion for health facilities, and over $30 billion to build new schools and child care spaces. If delivered, it would mark one of the most extensive capital buildouts in the province’s history.
The projected deficit for 2024–25 is $6 billion, which is $3.8 billion lower than expected in last year’s budget. However, deeper deficits are expected over the next two years, with the government forecasting a $14.6 billion shortfall in 2025–26 and $7.8 billion in 2026–27. A small surplus of $200 million is forecast for 2027–28.
Ontario’s economy grew by 1.5 percent in 2024. Growth is expected to slow to 0.8 percent in 2025, and rise to 1.0 percent in 2026. The net debt-to-GDP ratio is projected to hit 37.9 percent in 2025–26, remaining under 39 percent through 2028.
The 2025 Ontario Budget comes at a time when businesses across sectors are dealing with global supply chain instability, inflation, and cross-border trade pressures. The scale of investment in manufacturing, minerals, and worker training could shift how Ontario responds to future economic challenges.
While the government says the plan is both ambitious and cautious, the coming years will test whether these investments can deliver jobs and economic stability without adding long-term financial pressure to the province.
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