By Graham MacInnis
TORONTO — Ontario now expects a $16.9 billion deficit for the 2026-27 fiscal year, the largest the Ford government has projected, and has pushed its target for a balanced budget back to 2029-30, according to the province’s fall economic statement and reporting by CBC News.
It is the fourth time the province has delayed its balanced-budget date. The previous target was 2028-29.
“Double whammy”
Finance Minister Peter Bethlenfalvy told CBC Radio’s Metro Morning on Friday that the economy is absorbing a “double whammy” from the Canada-U.S. trade war and the U.S.-Iran conflict, which has pushed up prices across many goods. He said the economy is still growing despite those “headwinds.”
“We come at these challenges with a strong financial position,” Bethlenfalvy said.
Economists and critics split
Laura Gu, a senior economist at Desjardins, said a larger deficit means more borrowing and higher debt-service costs, but called the government’s response appropriate.
“There’s not tricks or treats in Ontario’s fall economic statement,” Gu told CBC. “Larger deficits [are] widely expected in today’s environment, where spending pressure is high and the economy is stuck in low gear.”
She called the 2029-30 balance target “ambitious,” saying hard spending decisions will follow, though she does not expect health care to be cut.
Noah Jarvis, Ontario director of the Canadian Taxpayers Federation, called the forecast “bad news for taxpayers.”
“Premier Ford needs to immediately reverse course and cut wasteful government spending,” Jarvis said, pointing to the advertising budget and to transit projects such as the Finch West and Eglinton Crosstown LRTs.
Ontario’s Big City Mayors praised continued support for tariff-hit industries but asked for more investment in supportive housing, HART hubs and recovery-based treatment.
What a deficit this size means
Larger deficits mean more provincial borrowing, and Gu noted that debt-service costs will rise with them. The delayed balance date leaves the government three more fiscal years of projected shortfalls, and how quickly it closes the gap will depend on whether the trade dispute with Washington eases and whether growth holds.
CBC’s Queen’s Park bureau described the shortfall as the largest in almost two decades, and said the government attributes it mainly to tariffs and the trade war with the United States. The province’s revenue picture is closely tied to manufacturing and auto exports, sectors that have been squeezed on both sides of the border.
Gu said she did not expect cuts to land on health care, but did not say where else savings might come from. Jarvis argued infrastructure spending had “ballooned” out of control on several transit projects.
Opposition critics in Ottawa’s region also said the mini-budget overlooked projects there, CBC Ottawa reported separately.
The cross-border angle
Ontario is Western New York’s largest trading partner across the Niagara and Peace Bridge crossings. Bethlenfalvy’s statement attributes much of the shortfall to tariffs; the Trump administration has said its tariffs are intended to protect American workers and rebalance trade. How the dispute resolves will shape both Ontario’s books and the volume of trucks crossing into Erie and Niagara counties.
This story credits reporting by CBC News.
Photo: DXR, CC BY-SA 4.0, via Wikimedia Commons. Ontario Legislative Building, Toronto.
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