Against the backdrop of U.S. tariffs and global market volatility, Ontario has revealed its 2026 budget which it says will make it the “most competitive, resilient and self-reliant” economy in the G7.
Building off last year’s spending measures aimed at combatting U.S. President Donald Trump’s trade war, the budget released Thursday touts lower costs for Ontario businesses, while keeping costs down for families and individuals.
“Ontario continues to navigate a period of global economic and geopolitical uncertainty. The year ahead could bring the potential of new challenges. This is why our government is ready with a plan to protect Ontario – for today and for generations to come,” Finance Minister Peter Bethlenfalvy wrote in the budget’s foreword.
The provincial deficit for 2025-26 is projected to be $12.3 billion, $2.3 billion less than what was predicted in the 2025 budget.
Ontario is projected to run a deficit of $13.8 billion in 2026-27, $6 billion more than what was forecast in 2025. Ontario will stay in the red in 2027-28 with a deficit of $6.1 billion (initially predicted to be a surplus of $200 million in last year’s budget), before getting into the black with a surplus of $600 million in 2029.
CTV News Toronto reviewed the 231-page document, dubbed “A Plan to Protect Ontario,” to find all the elements that might affect your personal and small business finances.
Here are some of the highlights:
HST relief for new home buyers
Starting April 1, the province will provide a temporary rebate of up to $130,000 on the Harmonized Sales Tax (HST) for eligible buyers of new homes valued at up to $1.5 million.
The rebate would decrease proportionally for homes valued at $1.85 million and above, which would qualify for $24,000.
The measure was announced earlier this week and included in the budget documents. It is subject to the passage of federal legislation. The province said that legislation would cover Ottawa’s five per cent portion of the HST, while it picks up the eight per cent balance.
It’s estimated that the move would provide almost $2.2 billion in total joint tax relief for housing in Ontario. The program is expected to spur 8,000 housing starts, for a sector desperately in need of a boost.
The enhanced rebate would be available until March 31, 2027. The homes purchased must begin construction on or before Dec. 31, 2028 and must be “substantially” completed on or before Dec. 31, 2031.
Extending the One Fare Program
Announced late last year, the province is extending its One Fare Program by two years.
The program allows riders to pay once when they transfer between the TTC, GO Transit, Mississauga’s MiWay, and other regional transit networks.
Since launching in 2024, the province says the program has saved Ontarians a total of nearly $233 million and individual commuters up to $1,600 each year.
Proposed small business income tax cut
One of a handful of new measures announced Thursday, the province is proposing cutting the small business corporate income tax (CIT) from 3.2 per cent to 2.2 per cent.
“By cutting the rate by more than 30 per cent, over 375,000 Ontario small businesses would benefit from an additional $1.1 billion in CIT relief over the next three years,” the province said.
It’s estimated that the measure would provide $5,000 in annual tax relief to small businesses. The proposed tax rate would take effect on July 1, 2026.
Income tax deduction acceleration for businesses
The province is also pitching accelerating the income tax deduction process for the cost of depreciable assets.
For example, a manufacturing and processing business could purchase machinery and equipment and be eligible for an immediate 100 per cent tax write off, instead of spreading out those deductions over time.
The plan, which is contingent on the passage of federal legislation, would provide over $3.5 billion in Ontario income tax relief for qualifying businesses over four years.
The $750 Classroom Supplies Card
Announced earlier this month, the province is investing $66 million per school year to create the Classroom Supplies Fund for elementary school homeroom teachers.
The fund will give those teachers $750 by way of a “Classroom Supplies Card,” which they can use to order supplies directly through a new provincial website.
The materials, including grade-specific tools like pens and pencils, paper and notebooks, calculators and chalk, will then be delivered to their school.
Previously teachers would often use their own money to help cover the cost of classroom supplies, or rely on parental donations.
“Improving student achievement and preparing students for the future requires that teachers have consistent and adequate resources, including classroom supplies,” the budget notes.
“This investment makes it easier for elementary teachers to order what they need, giving them flexibility to choose material that fit their teaching plans, and further supports student success by putting funding directly into the classroom.
Outlawing ticket resales for more than face value
The days of exorbitantly-price resale tickets to concerts and sporting events may be numbered.
The province announced last week that it would make it illegal for tickets to those events and others like them to be resold for more than their original cost.
In the budget, the province said the change is designed to address “longstanding concerns about unfair resale practices.”
“Recent high-demand events have highlighted how quickly tickets can be purchased and relisted at significantly higher prices,” it says.
The province scrapped a law in 2019 that would have limited resale prices at 50 per cent above face value, calling it “unenforceable” at the time. But the sky-high resale prices for Blue Jays’ World Series tickets (some of which were in the tens of thousands of dollars per ticket) and other popular events in Ontario prompted the government to revisit the issue.
Because the legislation is included in the budget, it means it will take effect prior to the FIFA World Cup in Toronto later this summer, potentially putting a cap on resale tickets which have been listed in the thousands of dollars.
