Ontario 2025 budget: Highlights from bike lanes to alcohol revenue and housing

Global News

15-05-2025

Ontario has tabled its 2025 budget, outlining its spending plans for the next year in an economy dominated by tariffs from the United States.
The annual document gives an indication of the health of the province's economy and includes major and minor policy announcements from the government.
Under tariffs from U.S. President Donald Trump — and the threat of more potentially to come — Ontario has announced an increase in deficit spending to respond.
The budget, titled A Plan to Protect Ontario, focuses its major announcements on the tariffs but includes a raft of new policies.
Below are a few highlights:
New tariff measures
The budget includes tens of billions of dollars in tariff-related relief and stimulus, confirming a range of measures that were previously announced or included in the Progressive Conservatives' recent election campaign.
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The creation of a new $5 billion Protect Ontario fund is at the heart of that plan. The fund will include $1 billion in relief to help businesses struggling with liquidity, and another $4 billion for other support measures.
The government will also roll out a $1.3 billion manufacturing tax credit and $11 billion in business support — largely through wage deferral.
Smaller funds in the budget relating to tariffs include $20 million for layoff coordination centres and $40 million for communities especially impacted by tariffs.
More bike lanes to be removed
The budget also includes fresh news on the Ford government's ongoing attempts to remove bike lanes in the City of Toronto.
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Last year, the province said it would remove bike lanes from Bloor Street, Yonge Street and University Avenue.
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The legislation that allowed for the removal of those bike lanes was appealed by cycling advocacy groups. While their case — alleging their removal would be unconstitutional — has not been decided, an Ontario judge granted an injunction, temporarily blocking their removal.
The government has appealed that injunction.
Meanwhile, the province used its annual budget to take away two more neighbouring bike lanes. It now plans to remove bike lanes from Queen's Park Crescent and Avenue Road.
The two streets set to be targeted are both located steps from the Ontario legislature.
Less money from alcohol
The latest budget is the first to be tabled since the Ford government rolled out its liberalization of the province's alcohol market.
Last spring, Ontario announced it was breaking an exclusivity deal with The Beer Store to allow convenience stores, grocers and big box retailers to sell beer, wine and pre-mixed drinks.
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At the same time, the government also made the LCBO the exclusive wholesaler for the entire province.
The liberalization of alcohol was also at the heart of a weeks-long LCBO strike held during the summer.
The budget shows that, despite the fact that the LCBO sells alcohol to the convenience stores, its revenues have fallen relatively significantly this year.
Income from the LCBO will drop dramatically from $2.5 billion in 2022 to a projected $1.9 billion this year. Overall tax revenue from alcohol will also fall from $600 million in 2022 to $388 million in 2025.
The budget includes measures which could lead to revenue falling further in the future.
The budget, for example, increases the discount LCBO offers to wholesalers from 10 per cent to 15.
A series of wholesale mark-up changes and tax category tweaks are also designed to lower the cost of alcohol in Ontario without cutting the money given to producers.
That means the government is telling the LCBO to reduce its markup — and therefore cutting the money it brings in.
Housing starts down, again
For another successive budget, the province's housing start projections have fallen significantly.
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The latest forecasts, which are based on private-sector analysis, show the province will see an 18 per cent decline in housing starts over the next three years compared to earlier projections.
Instead of constructing 282,000 homes between 2025 to 2027, the province is now expected to build 229,000 homes in that same period.
The Ford government promised in 2022 to build 1.5 million new homes over the next decade, to the year 2031. In order to do that, the province would need to start 150,000 new homes every year for the decade.
Ontario has never come close to that figure — and set its target for the first few years lower. The latest data, however, projects the province will be achieving roughly half of that annual target.
This year, Ontario is expected to begin building 71,800 housing units, with 74,800 next year and 82,500 in 2027.
The housing minister said his government remains committed to the goal of 1.5 million homes.
New police spending plans
The budget also includes some additional funding announcements for law enforcement.
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The government has earmarked $1 billion to renovate and expand the Ontario Police College in Aylmer, as well as a new Ontario Provincial Police Academy in Orillia.
The moves play into changes announced last year by the government, designed to drive the supply of new police officers in the province, including eliminating tuition fees.
The government will also add two new police helicopters for forces serving border towns. That builds on the procurement of helicopters for Toronto-area forces announced in the 2024 budget.