Ontario posts $13B deficit as spending on health care, education and infrastructure reaches record levels

Ontario concluded the 2025-26 fiscal year with a $13 billion deficit, surpassing the government's budget projections. This deficit was primarily due to record spending on health care, education, and infrastructure. The province's total program spending amounted to $220.9 billion, a 4.7% increase from the previous year. Treasury Board President Kinga Surma lauded the government's efforts to create a competitive, resilient, and self-reliant economy in the G7.

The improved fiscal outcome was attributed to stronger-than-expected tax revenues, increased income from government business enterprises, and other non-tax revenue sources. Health care spending saw the largest increase, rising by $6.6 billion or 7.2% due to investments in hospitals, home care services, long-term care, and other health initiatives.

Education spending also grew by $2.3 billion, a 6.1% increase, supporting child-care initiatives, school repairs, and new constructions. Infrastructure spending increased by $1.9 billion, funding projects like hospitals, public transit, highways, and broadband expansion. Meanwhile, the province benefited from lower-than-expected debt servicing costs, with interest and debt servicing charges being $747 million lower than forecast.

Finance Minister Peter Bethlenfalvy emphasized a balanced fiscal approach during economic volatility. The government also highlighted tax relief measures, continuing to reduce the tax burden on individuals and businesses by approximately $12 billion annually. The release of the financial statements comes amid concerns about long-term spending pressures and potential economic risks such as U.S. trade actions and tariff disputes.