How the Ontario budget could impact your pocketbook

Finance Minister Peter Bethlenfalvy discusses how the uncertainty created by the U.S. tariffs heavily influenced the fiscally responsible Ont. budget.

Ontario has tabled its 2025 budget, with much of the spending plans focused on combatting U.S. President Donald Trump’s tariffs.

Premier Doug Ford had said his government may be forced to spend billions of dollars on stimulus amid the trade war and won a third straight majority government in February on a pledge to safeguard the provincial economy.

FULL STORY: Ontario reveals 2025 budget

Thursday’s budget, dubbed “A Plan to Protect Ontario,” aims to make good on that promise, with new, and previously announced, measures to bolster businesses, workers, and their families in the uncertain financial times.

The government says that as a result of the investments, its projecting a deficit of $14.6 billion in 2025-2026, which will shrink to $7.8 billion in 2026-2027, before reaching a $200 million surplus in 2027-2028. In the 2024 budget, the province had forecasted a deficit of $4.6 billion in 2025-2026 (which improved to a shortfall of $1.5 billion in the fall economic statement) and a balanced budget for 2026-2027, before Trump’s tariffs were announced.

Here are some of the highlights and how the budget could impact your pocketbook:

Gas and fuel tax rates permanently reduced

The government will make its gas and fuel tax rate cuts permanent, which will save the average household, on average, $115 annually, it said. Back in 2022, the government cut its gasoline tax by 5.7 cents per litre and the fuel (diesel) tax rate by 5.3 cents per litre. The cut was extended four times and was set to expire on June 30.

Removing Highway 407 East Tolls

Starting June 1, tolls from the provincially owned portion of Highway 407 East from Pickering to Clarington will be removed. The government said the move is expected to save drivers $94 million annually and reduce gridlock.

Deferral of select provincially administered taxes

The province is deferring select provincially administered taxes for eligible businesses from April 1 to Oct.1 2025. Ontario estimates the move could provide up to $9 billion in cash support to some 80,000 businesses and job creators in the province. Penalties and interest will not be applied if a business chooses to defer.

Investing an additional $1 billion into the Skills Development Fund

The province will invest an additional $1 billion into the Skills Development Fund, which supports hiring, training and upskilling programs in Ontario. The investment brings the total funding over the next three years to $2.5 billion and will help protect the province’s “competitive advantage” in the midst of the tariffs.

$2 billion WSIB rebate

Through the Workplace Safety and Insurance Board (WSIB), the province will issue a further $2 billion rebate for safe employers to support businesses and help keep workers on the job, in addition to the previous $2 billion rebate distributed in March.

$5 billion Protecting Ontario Account

The government says the $5-billion fund is designed to provide businesses with critical support to protect jobs, transform businesses, and grow strategic sectors of the economy that are facing “tariff-related” impacts.

$1.3-billion investment to protect manufacturing workers and jobs

Businesses that invest in buildings, machinery, and equipment used for manufacturing or processing in Ontario will be given $1.3 billion in support over the next three years by way of the Ontario Made Manufacturing Investment Tax Credit.

$20 million to mobilize new training and support centres

An investment of $20 million will be made in 2025-2026 to mobilize new training and support centers for laid-off workers, including those impacted by the tariffs. The centers will provide resources for affected workers, such as referrals to in-demand training, job search assistance, and upskilling.

Fertility treatment tax credit

Announced last year, the Ontario Fertility Treatment Tax Credit will cover 25 per cent of eligible fertility treatment plans up to $20,000 for a maximum credit of $5,000.

Lowering costs for businesses selling alcohol

Ontario will increase the LCBO wholesale discount rate from 10 per cent to 15 per cent on beer, wine, cider, spirits, and ready-to-drink beverages wholesaled by the LCBO to bars, restaurants, and convenience stores from spring 2025 to the end of the year. The province estimates the estimated savings will total approximately $56 million for eligible businesses in 2025.