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Yahoo
16-05-2025
- Business
- Yahoo
Ontario budget aims to 'tariff-proof' economy as U.S. trade uncertainty weighs
-- Ontario's 2025 budget marks one of its most ambitious efforts to shield the province from growing cross-border trade uncertainty, laying out over $30 billion in tariff-related measures while projecting a widened deficit of $14.6 billion. Released Thursday, the budget, titled 'A Plan to Protect Ontario,' focuses extensively on strategic capital investment, business support, and industrial self-reliance in response to the economic threat posed by U.S. tariffs. With real GDP growth projected to slow to just 0.8% this year, down from robust expansion in 2024, the government under Premier Doug Ford has prioritized stimulus in the form of industrial policy, tax credits, and emergency funds for affected companies. 'This spending is needed to weather the storm,' Finance Minister Peter Bethlenfalvy said, referring to the U.S. tariffs, adding the goal is to make Ontario's economy 'more resilient and self-reliant.' At the center of the budget is a sweeping suite of manufacturing and business programs, including a $5 billion Protecting Ontario Account for distressed sectors and an enhanced Ontario Made Manufacturing Investment Tax Credit worth $1.3 billion over three years. Another key component defers select provincial taxes for six months starting April 2025, unlocking up to $9 billion in liquidity for 80,000 businesses expected to face trade-related disruptions. CIBC (TSX:CM) economist Andre Grantham highlighted the fiscal consequences of this proactive stance, noting, 'Ontario's budget deficit is projected to widen to $14.6 billion in the current fiscal year (1.2% of GDP)… due in part to an expected tariff-led slowdown in economic growth as well as measures to help support households and businesses.' He added that contingencies embedded in the budget reflect 'the uncertain economic outlook,' with downside risks tied closely to the trajectory of U.S. trade policy. The capital side of the budget is anchored by over $200 billion in infrastructure projects over ten years, including $61 billion for public transit, $30 billion for highways, and $56 billion in healthcare facility upgrades. Uniquely, the government aims to promote domestic industry by requiring made-in-Ontario materials for publicly funded builds, including cement, steel, and forestry goods, as a further buffer against foreign supply chain volatility. In a rare bipartisan consensus on the challenge ahead, opposition leaders acknowledged the need to respond to tariff-related pressures while questioning the budget's priorities. Ontario NDP Leader Marit Stiles said, 'This budget is a test of whether this government will choose to strengthen Ontario and build a tariff-proof future over vanity projects and delaying critical infrastructure.' Liberal Leader Bonnie Crombie added, 'Will Doug Ford invest in your family—or in his friends?' Ontario's financing strategy reflects its evolving fiscal profile, with $59.8 billion in total funding requirements this year, including $42.8 billion in long-term borrowing. While that is down from the $49.5 billion issued in 2024, padded by pre-borrowing, net debt is expected to increase by $33 billion this year, pushing the net debt-to-GDP ratio to 37.9%, though still under the government's 40% ceiling. Economists warn that investor sentiment could sour if tariffs persist or deepen, disproportionately affecting trade-dependent provinces like Ontario. Creating a backstop through expanded contingency funds and industrial incentives, the 2025 budget attempts to signal resolve, but the ultimate success may depend less on Queen's Park... and more on Washington. Related articles Ontario budget aims to 'tariff-proof' economy as U.S. trade uncertainty weighs Foreign investors retreat from Canadian securities as traders bet on U.S. bonds What are the key similarities and differences between 2025 and 2000
Toronto Star
15-05-2025
- Business
- Toronto Star
Doug Ford's bad news budget reveals why he called an early election
Now you know why Doug Ford called an early election. He got out ahead of a bad news budget Officially, belatedly, Thursday's budget is an echo of the premier's February campaign slogan: 'A Plan to Protect Ontario.' A more fitting title: The 'Blame Trump Budget.' Fair enough. No question that the U.S. president messed up our economic outlook (and bolstered Ford's re-election outcome). The unanswered question is whether Ontario's premier can clean up that mess — or make matters worse. ARTICLE CONTINUES BELOW Ford has a penchant for cheering people up in dark times by promising the moon. It's how he wins elections. Despite his reputation for heartlessly slashing spending, the numbers tell different stories for Ontario's Tories. Forget Ford's press lines, look at the bottom lines. In this year's budget, as per previous budgets, his Progressive Conservatives have boosted spending to unprecedented heights: When he took over from the supposedly fiscally reckless Liberals, expenditures totalled a paltry $155 billion; after seven years of fiscally feckless Tories, the government plans to spend $232.5 billion. That's an increase of $77.5 billion — 50 per cent — on Ford's watch. That's how a people-pleasing populist premier boosts the economy ahead of elections in tough times. Now, post-election, the times are destined to get tougher in Ontario than just about anywhere else in Canada. The government now acknowledges that growth in the economy will crater to 0.8 per cent this year — less than half of what it predicted in its previous budget before the election. The outlook remains almost as bad in 2026, when economic growth will hobble along at barely one per cent — again less than half of the rosy 2.2 per cent the government previously projected. The numbers behind that number are even worse. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Housing starts are declining relentlessly and repeatedly: A pre-election prediction of 87,900 new homes last year has now revised downward to 74,600; what was supposed to be a banner year of 92,300 homes in 2025 is shrinking to 71,800 homes — even less than the year before, with more of the same bad news beyond. The unemployment rate will average 7.6 per cent this year, (not the optimistic 6.6 per cent predicted). But even that seems optimistic and outdated given the latest trend line from Statistics Canada showing that Ontario's rate jumped to 7.8 per cent in April (the highest in the country after Newfoundland and Labrador). Unemployment is now even higher in Toronto at 8.6 per cent, and Ontario lost 33,000 manufacturing jobs last month — the largest drop of any province. You can blame Trump all you want for that bad news, but the unemployment rate was a relatively healthy 5.9 per cent when Ford took power from Kathleen Wynne's Liberals in 2018. It could be worse — we could be under the thumb of Ford 1.0, the first iteration of the premier who came to power in 2018 swaggering and slashing and cutting. Ford 2.0 has changed his tune, promising $11 billion in tariff relief and support. On the eve of Thursday's budget, appearing at a cheery news conference alongside Manitoba's NDP premier, Wab Kinew, Ford mused about his new-found philosophy of stimulus and solidarity. 'What scares me are governments that go in there and start slashing and burning,' he began. 'We've never done that, we never will,' he added (apparently repressing the memory of his early budget proposals upon winning power). ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW In fact, this year's budget boasts a chunky deficit of $14.6 billion, pushing Ontario's accumulated debt to a daunting $489.8 billion (more than 51 per cent higher than what he inherited from Wynne's Liberals). No problem, the premier says: 'We can always balance in a year or two.' While his recent deficit spending reflects his free-spending ways, it's also a function of his old fashioned tax-fighting instincts. In good times and bad, and always at election time, this premier squanders every revenue opportunity because he never saw a tax or toll he didn't want to terminate. For four years, Ford fetishized his temporary gas tax holiday by extending it annually, costing the treasury $1.7 billion in foregone revenues. That money could have helped provide stable funding for cash-starved colleges and universities, where government spending is set to drop from $14.2 billion last year to $12.8 billion by 2027-28 — downward disinvestment. Ostensibly, originally, the gas tax holiday was a way to compensate Ontarians for the effects of the federal carbon levy. Now that Ottawa has axed that tax, Ford still wants to keep provincial fuel taxes capped. And so when Ford talks of stimulus, he doesn't just invest in infrastructure, he also allocates money to voter appreciation: 'You have to put money into the economy to keep things going — and when I say into the economy, into people's pockets, into businesses.' Buried in the bowels of the budget is a single line revealing Ontario's biggest fiscal sleight of hand — $6.46 billion in annual 'electricity cost relief programs' by which all taxpayers are compelled to subsidize the unlimited consumption of hydro ratepayers. Rather than letting us see the true cost of hydro on monthly electricity bills, the government keeps the numbers out of sight. ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Apart from that recurring coverup, this budget is brimming with optimism in bad times, cataloguing the government's greatest hits within its 232 fulsome pages. Maintaining the tradition of the last 15 Ontario budgets, this one boasts that we are once again on the cusp of cashing in on the Ring of Fire, a repository of rare minerals in the far north that has always been in our distant future. Repeating the aspirations of budgets going back to the 1980s, Ontario vows to lead the charge in dismantling internal trade barriers between provinces as an antidote to America erecting a tariff wall. Still, times change. Back in 2018, the Ford government came out of the gate slashing its support of artificial intelligence at Ontario's Vector Institute. Now, thanks to the premier's perspicacity and sagacity, the government has had a change of heart — and mind: The budget will bankroll 'flagship investments of up to $27 million in the Vector Institute.' Call it the miracle of machine learning for Ford 2.0 versus Ford 1.0. The lingering question is whether the premier who knew enough to call an early election ahead of a bad budget — and who belatedly learned his lesson on AI — can now steer Ontario through the turbulent times of Trump. Politics Headlines Newsletter Get the latest news and unmatched insights in your inbox every evening Error! Sorry, there was an error processing your request. There was a problem with the recaptcha. Please try again. Please enter a valid email address. Sign Up Yes, I'd also like to receive customized content suggestions and promotional messages from the Star. You may unsubscribe at any time. By signing up, you agree to our terms of use and privacy policy. 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Global News
15-05-2025
- Business
- Global News
Ontario 2025 budget: Highlights from bike lanes to alcohol revenue and housing
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. Story continues below advertisement 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. Get breaking National news For news impacting Canada and around the world, sign up for breaking news alerts delivered directly to you when they happen. Sign up for breaking National newsletter Sign Up By providing your email address, you have read and agree to Global News' Terms and Conditions and Privacy Policy Last year, the province said it would remove bike lanes from Bloor Street, Yonge Street and University Avenue. Story continues below advertisement 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. Story continues below advertisement 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. Story continues below advertisement 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. Story continues below advertisement 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.
