2025 Ontario Fall Economic Statement: Highlights and Takeaways for CPAs

November 14, 2025

The first week of November was a landmark in Canadian politics, with the release of the 2025 federal Budget and the Ontario Fall Economic Statement (FES).

With supply chains that stretch back and forth across the border, Ontario’s economy is intertwined with the U.S. and uniquely vulnerable to changing trade policy.  A Plan to Protect Ontario, released by the Hon. Peter Bethlenfalvy on November 6, 2025, maintains the government’s focus on providing supports for sectors of the economy most directly impacted by U.S. tariffs while maintaining the government’s fiscal path to balance by 2027.

Here is what CPAs need to know about A Plan to Protect Ontario: 2025 Ontario Economic Outlook and Fiscal Review.

Ontario’s Economic Outlook

The 2025 FES forecasts lower real GDP growth, slower job creation, and higher unemployment than what was projected in the May 2025 Ontario Budget. Trade tensions with the U.S. continue to weigh on the province.

Compared to Budget 2025, the FES has revised real GDP growth down slightly and raised unemployment forecasts. Inflation, measured by the Consumer Price Index (CPI), is expected to run lower than projected in 2025 before settling at 2.0% from 2026 to 2028.

Projections around new homes have also weakened. The FES expects 7,500 fewer housing starts in 2025 than projected in the May 2025 Budget. The downward trend continues through the forecast period, with a total of 9,700 fewer housing starts projected between 2026 and 2028 compared to the Budget’s estimates.

Fiscal Review

The province is projecting a $13.5 billion deficit for 2025-2026, $1.1 billion smaller than forecast in the 2025 Budget. The deficit is expected to narrow to $7.8 billion in 2026-2027, before registering a surplus of $0.2 billion by 2027-2028, consistent with expectations from the May 2025 Budget.

Multi-Year Tax Action Plan

The 2025 FES announced a “multi-year Tax Action Plan,” focused on encouraging business investment and making Ontario “the most competitive jurisdiction in Canada.”

There are real, tangible economic benefits to reforming Ontario’s tax system to help drive competitiveness and growth. For example, CPA Ontario’s Tax Reform for Growth in Canada recommends simplifying Ontario’s personal income tax system by eliminating its two surtax brackets and indexing Ontario’s top two personal income tax thresholds to inflation.

An update on the Tax Action Plan will be included in the 2026 Ontario Budget. As the government develops this plan, the CPA profession stands ready to contribute to this effort by bringing tax expertise and evidence-based policy recommendations to the table.

Business Supports and Economic Resiliency Measures

The 2025 FES is a continuation of the policies and priorities set out by the provincial government in the 2025 Budget.

As a result,  much of the policy included in the 2025 FES are expansions and extensions of previously announced programs designed to support businesses impacted by tariffs and to build resiliency in the Ontario economy.

Protecting Ontario Account: In the 2025 Budget, the Ontario government announced the creation of a $5 billion Protecting Ontario Account to provide immediate liquidity relief to businesses impacted by tariffs. The first $1 billion was released through the Protect Ontario Financing Program for the steel, aluminum and auto sector.  The provincial portion of the joint federal-provincial $500 million in support to Algoma Steel was provided through the Protect Ontario Financing Program.

The 2025 FES announced that the government is now developing the second and third streams of the Protecting Ontario Account. These streams will focus on leveraging private capital to help businesses transition away from their overreliance on U.S. trade, and build domestic supply chains in industries like AI, defence, advanced manufacturing and critical minerals.

Ontario Together Trade Fund (OTTF): The Ontario government announced a $50 million investment in the Ontario Together Trade Fund (OTTF) in the 2025 Budget to help small and medium-sized enterprises expand into new markets and reduce their reliance on exports to the U.S. In the 2025 FES, the government announced it will be spending an additional $100 million, bringing the total funding to $150 million over three years, starting in 2025-26.

Ontario Made Manufacturing Investment Tax Credit (OMMITC): The Ontario Made Manufacturing Investment Tax Credit (OMMITC), announced in the 2023 Budget, provides Canadian-controlled private corporations (CCPC) incentives to invest in buildings, machinery and equipment for use in manufacturing or processing. Since it was first announced, the tax credit has been updated. In the 2025 Budget, the government proposed to temporarily enhance the tax credit rate from 10% to 15% and expand it as a 15% non-refundable version to corporations that are not CCPCs. Both temporary enhancements are for investments made on or after May 15, 2025, and before Jan 1, 2030.

With the 2025 FES, the government is now proposing to amend the eligibility for investments in machinery and equipment to account for the time differential between when an asset is purchased and when it’s put into use.

Rebating the Provincial Portion of the HST: Prior to the release of the federal Budget, the Ontario government called on the federal government to rebate the federal portion of the HST for first-time home buyers. With the federal government moving to remove its portion of the HST in the 2025 Budget, the 2025 FES proposes to rebate the full provincial portion of the HST for first-time home buyers of most new homes, subject to the passing of federal legislation.

Should this come into effect, Ontario’s new rebate would eliminate the full 8% provincial portion of the HST for first-time home buyers on qualifying new homes valued up to $1 million.

Leveraging Ontario’s Competitive Advantages: With a resolution to the trade conflict with the U.S. still uncertain, the Ontario government is looking to fortify the provincial economy by leveraging what it considers Ontario’s key economic advantages.  The 2025 FES reiterates the government’s focus on critical mineral exploration and processing, with partnerships with First Nation communities on all-season road projects, the government’s commitment to a “One Project, One Process” approach to resource development and the previously announced $500 million investment to create a Critical Minerals Processing Fund (CMPF).

Nuclear power is another area where the government sees a distinct advantage.  The 2025 FES includes a reiteration of the province’s plan to build Small Modular Reactors (SMRs), the first of which will be at the existing Darlington nuclear site, and study OPG’s plan to refurbish four units at the Pickering Nuclear Generating Station along with refurbishments at Darlington and Bruce Nuclear Generating Stations.

Pivoting to Defence: The government’s plan to reinforce Ontario’s economy includes pivoting its manufacturing capacity to support nation building projects, including defence. With the federal government allocating an estimated $9.5 billion in expenditures to Ontario as part of its Defence Industrial Strategy, the province is looking to help businesses participate in this Canadian defence build-up.

In the 2025 Budget, the province announced an additional $90 million in venture capital (VC) funding through Venture Ontario, which includes $50 million to Ontario-based VC funds focused on national defence and related technologies, including AI. The enhancement and expansion of the Ontario Made Manufacturing Investment Tax Credit in the 2025 Budget includes opening the tax credit up to defence, and the Ontario government has previously announced $215 million to support Ontario’s shipbuilding and marine sector.

Ontario’s Beneficial Ownership Registry

Following public consultations with law enforcement, business organizations and regulators, including CPA Ontario, the government announced it will be moving forward to implement a Beneficial Ownership Registry in 2027. A key pillar of the government’s plan to combat money laundering, the government has signaled that its registry will align “with efforts in other provinces and at the federal level.”

Conclusion

With a weaker economic outlook driven by ongoing trade tensions, the Ontario government is focused on providing targeted relief to businesses and sectors most affected the U.S. trade policy, while maintaining its path to balance.

The announcement of a multi-year Tax Action Plan signals the government’s recognition that tax reform will be essential to Ontario’s long-term competitiveness. CPA Ontario and the CPA profession stand ready to support this work, bringing tax expertise to the table and informing policy recommendations that build a stronger, more competitive and growth-oriented economy.