TORONTO — Ontario closed 2025-26 with a $13.0-billion deficit, $700 million worse than the $12.3 billion Finance Minister Peter Bethlenfalvy forecast in the March budget, and he told reporters the red ink will keep coming because “the world has changed” and so has the relationship with the United States.The figure is $1.6 billion better than the $14.6-billion hole in the 2025 budget. Bethlenfalvy called that “a good news story.” Pressed on the newer miss, he said spring numbers were estimates built on federal tax data, and $700 million is “less than $1 billion” in a budget approaching a quarter-trillion dollars. “I like them to be zero. But this is the world we’re in today.”Program expenditure hit $220.9 billion, up $10.0 billion, or 4.7%, from the year before. Health rose $6.6 billion. Education rose more than $2 billion. Infrastructure rose almost $2 billion. Revenue was $223.3 billion, down $1.6 billion, or 0.7%. The 2024-25 deficit was $1.1 billion. Interest and debt charges came in $747 million under the 2025 forecast. Extra cash from government business enterprises helped versus the old plan. For the year now underway, Queen’s Park still projects a $13.8-billion deficit, then $6.1 billion in 2027-28, with a surplus not planned until 2028-29. Net debt-to-GDP is projected at 37.7% in 2026-27..Bethlenfalvy put the shortfall at about 1% of GDP and framed more borrowing as the price of U.S. tariffs — a chance to spend on subways, housing, nuclear, critical minerals, pipelines, hospitals and schools. The government cites nearly $30 billion in tariff-era relief. He then billed Ottawa: the Canada Health Transfer is set to fall from 5% growth to 3%, and time-limited deals on mental health, home care, labour and housing are ending or shrinking.The Financial Accountability Office says planned health and education growth still lags what is needed to hold service levels through 2029. Bethlenfalvy called that an “unaudited” snapshot. Wait for the Fall Economic Statement, due on or before Nov. 15, and next year’s accounts, he said. Boards and hospitals, in his telling, already get record transfers and should squeeze administration.
