The Ford government’s 2026 budget contains some good news and bad news for taxpayers.
Here’s the good, the bad, and the ugly.
First, the good news.
The main piece of good news in the Ford government’s 2026 budget is a plan to reduce the small business tax rate. For years, Ontario has had the highest small business tax rate in Canada, while other provinces have been steadily reducing theirs.
In his budget speech, Finance Minister Peter Bethlenfalvy announced a more than 30 per cent cut to the small business tax rate, dropping it from 3.2 per cent to 2.2 per cent, effective July 1. According to the finance minister, this will save over 375,000 small businesses more than $1.1 billion over the next three years.
The other piece of good news was announced by Premier Doug Ford ahead of the budget, which is that the HST will be taken off newly built homes for all homebuyers for a period of one year, beginning on April 1. As of last fall, only first-time homebuyers had access to those savings. This could save a family looking to buy a $1-million home $130,000 in taxes, in concert with a mirroring tax cut from the federal government.
Next, the bad news.
In a move that surprised virtually no one, Bethlenflavy pushed back his plans to balance the budget by yet another year, to 2028-29. Ford and Bethlenfalvy have now pushed back their balanced budget target three times: the original plan was to balance the books this year. Instead, there will be a deficit exceeding $13 billion.
All of this delaying is simply placing a greater debt burden on future generations, who will have to pay the bill.
Should taxpayers believe the Ford government this time?
Like a gambler at a casino who keeps promising to place just one more bet and then quit, it’s hard to have faith in Ford and Bethlenfalvy to balance the books after delaying their plans again and again.
According to the Fraser Institute, per-person net debt in Ontario has reached record highs under the Ford government, at nearly $30,000, and has remained stubbornly high since it hit that record high back in 2020.
And during the Ford government’s first six years in office, debt increased by $104 billion, or 32.2 per cent. That’s not even counting the past two years, in which Ford and Bethlenfalvy have delivered deficit budgets.
For a premier who once claimed that he was elected to end the party with taxpayer dollars, that’s a far cry from fiscal responsibility.
Finally, the ugly.
The province is establishing the so-called Protect Ontario Investment Fund, which will see $4 billion of your tax dollars invested to “attract strategic investment from pension funds and other private capital to advance Ontario’s long-term economic and strategic priorities.”
That’s $4 billion that could have gone towards reducing corporate taxes, lowering the deficit, or cutting personal income taxes, all of which would have served to attract private capital to the province more capably than a new government fund.
This is essentially a venture capital fund, which will see the government, and potential investors, pick winners and losers, something the Progressive Conservatives once derided the former Liberal government for doing.
All in all, the budget could have been worse. The deficit number is large, but at least some of it is going to fund tax relief. Taxpayers also could have done without the $4-billion winners and losers fund, but obviously the Ford government couldn’t resist wrapping itself in the “Protect Ontario” flag. The real test will be whether Ford and Bethlenfalvy can actually stick to their balanced budget and deficit reduction timetable.
Jay Goldberg is the Canadian Affairs Manager at the Consumer Choice Center. He previously served as the Ontario Director at the Canadian Taxpayers Federation and a policy fellow at the Munk School of Public Policy and Global Affairs. Jay holds a Ph.D. in Political Science from the University of Toronto.
