TORONTO — The Ontario government has outlined a new economic strategy aimed at protecting workers, attracting investment and strengthening key industries, while projecting a return to a balanced provincial budget by 2029–30.
Finance Minister Peter Bethlenfalvy released the 2026 Ontario Economic and Fiscal Review: A Plan to Protect Ontario on October 29, detailing measures to address U.S. tariffs, global economic uncertainty and growing competitive pressures.
The fall economic statement includes $8 billion in proposed provincial business tax relief, an $8.7 billion Canada-Ontario industrial action plan and continued infrastructure investments under the province’s $210 billion capital plan.
Ontario Introduces $8 Billion Competitiveness Tax Cut
A central component of the economic statement is the proposed Ontario Competitiveness Tax Cut, designed to encourage businesses to invest in equipment, technology and other productive assets.
The measure would provide $8 billion in provincial tax relief through immediate write-offs covering 100 per cent of the value of a broad range of eligible business assets.
Subject to federal legislation, the government estimates the initiative could attract at least $11 billion in additional capital investment, create 30,000 jobs and contribute $6 billion to Ontario’s gross domestic product.
Combined with accelerated write-off measures announced in the 2026 Budget, provincial tax relief supporting business investment would exceed $12 billion over five years.
Government Targets Manufacturing and Emerging Industries
Ontario is also advancing an $8.7 billion joint action plan with the federal government to strengthen the automotive, steel and critical minerals sectors.
The initiative focuses on protecting tariff-affected businesses, modernizing industrial operations and developing domestic supply chains.
Priority industries include advanced manufacturing, electric vehicles, defence, energy and critical minerals processing.
“Ontario continues to face significant economic uncertainty driven by U.S. tariffs on Canada, but our government has a plan to protect workers, businesses and communities while building a stronger economy for the future,” said Minister Bethlenfalvy. “Through responsible fiscal stewardship we are fortifying key provincial industries as we attract the jobs of the future, protecting key public services and ensuring our province remains competitive in an increasingly uncertain global economy.”
Ontario Expands Tariff Relief and Reduces Business Regulations
The province says it has announced nearly $30 billion in tariff-related relief and business support measures since April 2025.
These initiatives include a temporary provincial tax deferral that made up to $9 billion in liquidity relief available to approximately 80,000 businesses.
Expanded eligibility for the Ontario Together Trade Fund and Protect Ontario Financing Program is intended to help businesses maintain employment and strengthen Canadian supply chains.
The government is also reviewing 375 business-facing permits, targeting the elimination, simplification or transformation of 35 to 50 per cent by the end of 2028.
Officials say regulatory reforms are eliminating nearly 220,000 days of cumulative permit processing time.
Research, Forestry and Film Industries Receive Attention
Ontario plans to restore capital expenditures as eligible costs under two provincial research and development tax credits.
The changes are expected to provide more than $50 million in additional tax support over three years, benefiting approximately 700 businesses.
The province is also supporting forestry through more than $90 million in competitiveness and innovation investments and over $86 million for forest biomass projects.
In the entertainment sector, proposed changes to the Ontario Computer Animation and Special Effects Tax Credit would restrict eligibility to film and television producers while maintaining the 18 per cent refundable credit.
Ontario Projects Budget Balance by 2029–30
Despite its investment commitments, Ontario faces continuing fiscal pressures.
The government forecasts real GDP growth of 0.5 per cent in 2026 and 1.5 per cent in 2027.
Projected provincial budget deficits
Source: Ontario 2026 Fall Economic Statement. Figures are government projections.
The province expects its net debt-to-GDP ratio to remain below 40 per cent throughout the forecast period.
Meanwhile, more than $12.5 billion in affordability supports is planned for 2026–27, covering housing, education, transportation, energy, child care and assistance for vulnerable residents.
Economic Outlook and Next Steps
The government will begin consultations in November to help shape its 2027 Budget, including further measures supporting economic growth, infrastructure development and public services.
Ontario’s latest fiscal plan reflects an effort to balance industrial competitiveness and job creation with financial sustainability. Its success will depend partly on trade conditions, private-sector investment and whether projected economic growth materializes over the coming years.
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