TORONTO — Ontario’s fall economic statement projects a $16.9-billion deficit for the current fiscal year, up from the $13.8 billion forecast in the March budget, as Finance Minister Peter Bethlenfalvy pointed to U.S. tariffs and higher oil prices.The update, tabled Thursday, also shows the return to a balanced budget has been pushed back once more. The province now expects a $12.7-billion deficit in 2027-28 and a $6.7-billion shortfall in 2028-29, the year the March budget had projected a $600-million surplus. A small surplus is now forecast for 2029-30 — the fourth time since 2024 the government has delayed the date it expects to stop running deficits.Bethlenfalvy described the moment as “the most consequential time in our country’s recent history” and said Ontario is “living in a post free-trade, protectionist world.” He said that he does not like deficits and that they are “not desirable in the long term,” but added, “I’m also a realist of the world we’re in.”.The government attributed the weaker outlook to U.S. tariffs that have cut steel exports to the United States by more than 50% so far this year and auto exports by nearly 14%. Higher oil prices linked to the U.S.-Iran war were also cited. Together the pressures have reduced expected real GDP growth this year to 0.5%, roughly half the rate projected in the spring budget.Part of the larger deficit figure comes from an increase in the province’s contingency fund. The government is adding $3.8 billion to the reserve, bringing the total to $4.9 billion. Officials said the extra money provides flexibility to protect the economy and key services amid uncertainty.Canadian Taxpayer Federation Ontario director Noah Jarvis called the statement “bad news for taxpayers,” noting it raises spending by $3.1 billion above the 2026 budget plan. He said the province is borrowing nearly $29 billion this year, pushing total debt to about $483 billion, and warned that rising interest charges will fall on taxpayers..The statement also confirms Ontario will match the federal government’s “productivity mega deduction,” a tax measure allowing businesses to write off capital investments more quickly. The provincial cost is estimated at about $8 billion over five years.Opposition members criticized the update. NDP Leader Marit Stiles called it an “admission of failure” and said Premier Doug Ford has “sold out.” Interim Liberal Leader John Fraser said the figures represented “the worst fiscal management by any government in the history of Ontario.”The fall statement contains no major new program announcements beyond previously signalled measures. The government has framed the larger deficits as a response to external shocks rather than a change in its overall approach to spending.Official documents for the 2026 Ontario Economic Outlook and Fiscal Review are available on the provincial budget website. The next full budget is expected in the spring.
