Ontario’s finance minister says the province is not immune to trade disruptions after putting forward a budget that would expand the deficit.
Peter Bethlenfalvy presented Ontario’s latest budget Thursday following the Ford government’s re-election in March. The deficit is expected to rise by another $10 billion in 2025-26 as the province spends billions on initiatives to spur economic growth and support workers amid downside risks from U.S. tariffs. Bethlenfalvy said in an interview with BNN Bloomberg Friday that the larger deficit will occur alongside a “much bigger economy.”
“To put that in perspective, our path to balance is only delayed by one year, so instead of next year it’s in 2027. But we’ve got to meet the moment…tariffs are impacting economies around the world, the world economies are slowing down,” he said.
“Ontario is not immune from those forces, but we’ve got a plan and a vision to deal with both short-term relief, $30 billion of relief in the short term and we have a vision for the future, which involves the ring of fire and critical minerals (and) involves our energy strengths. It involves our advanced manufacturing and technology strengths that we have in this province to build even a more prosperous and competitive economy, the best in the G7.”
Growing Ontario’s economy will require providing tools and incentives for investment, Bethlenfalvy said. He pointed specifically to the recently expanded Ontario Made Manufacturing Investment Tax Credit, aimed at bolstering manufacturing in the province.
Bethlenfalvy also highlighted the nuclear industry, with Ontario Power Generation Inc. winning approval to build the first of four total approved small modular reactors, Bloomberg News reported last week.
Interprovincial trade
Ontario is also positioning itself as a leader of free trade within Canada, Bethlenfalvy said.
On Wednesday, Ontario Premier Doug Ford and Manitoba Premier Wab Kinew signed an agreement to increase the movement of goods and labour between the two provinces.
“Ontario is opening up our market, we’re leading the way. Other provinces are coming on board that could unleash some $200 billion of trade. And I’ve always said Canada’s best trading partner is Canada, so those are things that we can do right now,” he said.
Ontario’s debt
To fund its larger deficit, Ontario is planning to borrow $59.8 billion, with a large portion coming from foreign currency bond sales, Bloomberg News reported Thursday.
Bethlenfalvy said he thinks investors around the world would be buyers of the province’s debt.
“We’ve had a terrific, robust, access to capital markets, and in fact through our measures of reducing the debt relative to our economy, reducing the interest costs relative to the revenue, some of the best metrics we’ve seen in a decade. We (Ontario) got two credit rating upgrades last year from S&P and DBRS, we’re on positive watch with Moody’s,” he said.
