Ontario's fall economic statement, released on Thursday, has revealed a larger-than-expected deficit of $16.9 billion for the 2026-27 fiscal year. This marks the largest deficit the Ford government has ever faced, prompting mixed reactions from economists and taxpayer advocates. Finance Minister Peter Bethlenfalvy attributed the shortfall to a 'double whammy' of challenges, including the ongoing Canada-U.S. trade war and the U.S.-Iran conflict, which have driven up prices for many goods. Despite these headwinds, Bethlenfalvy emphasized that the province's economy continues to grow.
Laura Gu, a senior economist at Desjardins, downplayed concerns about the deficit, stating that the province's response to the economic challenges is appropriate. She noted that the larger deficit means the government will need to borrow more, increasing the cost of servicing its debt. Gu also highlighted that the province's plans to balance the budget have been delayed by a year, now aiming for the 2029-30 fiscal year instead of 2028-29. She suggested that hard spending decisions will be necessary to achieve this goal, though she does not expect cuts in sectors like healthcare.
Noah Jarvis, Ontario director of the Canadian Taxpayer's Federation, offered a contrasting view, describing the projected deficit as 'bad news for taxpayers.' He argued that Ontarians are not benefiting from increased government spending and urged Premier Doug Ford to reverse course and cut wasteful expenditures. Jarvis suggested reducing spending on areas like advertising and infrastructure projects, such as the Finch West LRT and Eglinton Crosstown LRT, which he claimed have ballooned out of control.
The Ontario Liberals have called for a public inquiry into the Eglinton Crosstown LRT construction delays, while Ontario's Big City Mayors organization praised the province's continued investment in industries impacted by tariffs. The group also called for greater investment in supportive housing, HART hubs, and recovery-based treatment programs to improve the lives of vulnerable Ontarians.