TORONTO – August 13, 2025 — Ontario’s fiscal course remains unchanged as the province released its 2025–26 First Quarter Finances on Wednesday, reaffirming projections from this spring’s budget and underscoring a commitment to maintain one of the strongest financial positions in over a decade.
The update — the first economic and fiscal outlook since the 2025 Ontario Budget A Plan to Protect Ontario — shows the province is on track to meet its targets despite ongoing global economic uncertainty and trade tensions.
Fiscal Prudence and Economic Resilience
“The government’s commitment to fiscal prudence has put Ontario’s finances in the strongest position they have been for over a decade,” said Peter Bethlenfalvy, Minister of Finance. “In the face of economic uncertainty, our plan will continue to protect Ontario’s workers, businesses, and jobs from the impacts of U.S. tariffs while building a more resilient and self-reliant economy to secure long-term prosperity.”
The province’s economic performance in early 2025 provided cautious optimism. In the first calendar quarter, Ontario’s real gross domestic product (GDP) rose 0.6 per cent, matching the growth rate of the previous quarter. The gains were driven by stronger exports and healthy household spending.
Deficit and Revenue on Target
Ontario’s deficit projection for 2025–26 remains at $14.6 billion, while revenue forecasts hold steady at $219.9 billion — both in line with the spring budget estimates. Program spending is projected at $216.3 billion, also unchanged.
The government is maintaining its goal of returning to a balanced budget by 2027–28. A more detailed multi-year fiscal outlook will be presented later this year in the 2025 Ontario Economic Outlook and Fiscal Review, also known as the Fall Economic Statement.
Debt and Credit Ratings Strong
Key fiscal health measures continue to rank among the best in years. The province’s net debt-to-GDP ratio is 37.9 per cent, near its lowest point since 2013–14. Net interest costs as a share of revenue remain close to the lowest levels seen since the 1980s.
Interest and Other Debt Servicing Charges are projected at $16.2 billion for 2025–26, unchanged from budget forecasts, with a forecasted cost of borrowing of 4.0 per cent.
Ontario’s prudent fiscal stance has been recognized by all four major credit rating agencies, which have reaffirmed the province’s double-A credit rating. This endorsement reflects market confidence in Ontario’s ability to meet its debt sustainability targets despite a volatile economic and geopolitical backdrop.
Reserves and Borrowing Strategy
The government has maintained a $2.0 billion reserve for 2025–26 to safeguard against unforeseen changes in revenues or expenditures. This reserve was part of the original budget plan and remains untouched in the current outlook.
Ontario’s borrowing program is ahead of schedule, with nearly half of the 2025–26 requirements already completed. Officials say this proactive approach helps manage risk in unpredictable financial markets.
Green Bonds remain a central feature of the province’s borrowing strategy. Since 2014–15, Ontario has issued $21.5 billion in Canadian dollar Green Bonds, with $16.8 billion currently outstanding. The program supports environmentally sustainable projects while diversifying the province’s investor base.
Looking Ahead
The Ministry of Finance will issue its next update no later than November 15, 2025, in the Fall Economic Statement. That document will provide fresh projections, a detailed multi-year fiscal plan, and any policy adjustments required to keep Ontario on track for a balanced budget by 2027–28.
The province’s strategy blends fiscal discipline with targeted investments aimed at maintaining competitiveness. The government continues to position Ontario as a leading G7 economy, focusing on keeping costs down for families, protecting jobs, and bolstering resilience in the face of international trade challenges.
While the broader economic outlook remains clouded by global uncertainty, today’s figures suggest the province’s fiscal foundation is solid. Strong credit ratings, stable debt metrics, and adherence to budget targets provide the government with a degree of flexibility to navigate whatever economic turbulence lies ahead.