2026 Ontario Fall Economic Statement: Highlights and Takeaways for CPAs

October 30, 2026

The government’s 2026 Fall Economic Outlook and Fiscal Review: A Plan to Protect Ontario, released 29 October 2026, demonstrates that the province has not escaped the trade dispute with the United States unscathed.

The overall U.S. tariff rate for Ontario is lower than the global average at just over 5 per cent. But, as the economic data demonstrates, Ontario’s economy is uniquely exposed to these tariffs, especially the section 232 tariffs targeting steel, aluminum and automotives, given our reliance on the U.S. as an export market. In the first eight months of 2026, steel exports to the United States from Ontario were cut in half, and the export of automotives fell by over 13 per cent.

The impact can be seen in the hard numbers, including the real GDP growth projection of 0.5 per cent, down from the projected 1.0 per cent in Budget 2026. The government’s fiscal position has also deteriorated, with the deficit rising to $16.9 billion, over $3 billion higher than what was projected in the last provincial budget.

A Plan to Protect Ontario includes reference to the steps the provincial government has taken, in concert with the federal government, to support businesses and workers directly impacted by tariffs, as well as measures designed to improve the province’s economic competitiveness. Both of these impact the Province's finances. The government has spent nearly $30 billion since April 2025 to provide targeted support to businesses and workers. At the same time, the newly announced Ontario Competitiveness Tax Cut, the provincial component of the federal government’s Productivity Mega Deduction, is projected to provide up to $8 billion in additional tax relief for business over the next five years and make the province a more attractive destination for investment.

The province is weathering the storm of economic uncertainty, missing the “worst case scenarios” laid out in the last budget, if only barely. The Fall Economic Statement is exactly that: an update of the province’s current position. Setting the competitiveness tax cut aside, the government will need to do more in the upcoming Budget to put the province on a path to higher growth, given the headwinds Ontario is facing.

By the Numbers

Ontario’s Real GDP is projected to grow 0.5 per cent in 2026-27, coming in below the 1.0 per cent projected growth rate in Budget 2026. This new number is closer to the “Slower Growth Scenario” noted in Budget 2026 (0.3 per cent). Looking ahead, GDP is expected to grow by 1.5 per cent in 2027, 1.8 per cent in 2028 and 2.0 per cent in 2029.

The deficit is projected to be $16.9 billion, significantly higher than the previous $13.8 billion projection in Budget 2026. Looking ahead to 2027-28, the projected deficit falls to $12.7 billion, in line with the “Slower Growth” scenario projected in Budget 2026.

Program expenses are projected to increase by $4.3 billion this year, primarily due to the top up of the province’s contingency fund. The extension of the Ontario New Home Affordability Payment, is a principal driver of projected expense increases until 2029 as well. Over the longer-term, program expenses are projected to increase nearly $10 billion over three years from $220.9 billion in 2025-26 to $230.3 billion in 2028-29.

The outlook for Interest and Other Debt Servicing Charges, the government’s fourth-largest expense, sits at $17.4 billion in 2026–27, up from the $15.5 billion projected in Budget 2026, and will continue rising to $18.9 billion in 2027–28 and $20.4 billion in 2028–29.

On the upside, the government is forecasting a $2.0 billion increase in total revenue in 2026-27, primarily driven by higher-than-expected federal transfers, net income from Government Business Enterprises and taxation revenue.

Together, these numbers underscore the toll that U.S. tariffs, trade uncertainty and rising energy prices are taking on Ontario’s economy. Budget 2026 assumed oil at US$59 per barrel, compared with US$83 per barrel in the 2026 Fall Economic Statement. In the first eight months of 2026, steel exports to the United States fell 50.6 per cent from the same period in 2024, to $4.1 billion, and automobile exports declined 13.7 per cent, to $34.5 billion. At the same time, total exports from Ontario grew by 1 per cent, demonstrating that the tariffs are only impacting a select number of industries, and the province’s diversification strategy is having some positive effect. As noted in the Fall Economic Statement, in 2026-27 the province will lead more than 60 targeted export missions across 27 countries.

With projected real GDP growth at only 0.5 per cent and the deficit rising by more than $3 billion to $16.9 billion, the numbers highlight Ontario’s deep dependence on U.S. trade and the risk that prolonged uncertainty will keep costs high and growth low.

Business Support Programs

Just over a week ago, the provincial government announced a nearly $9 billion package of supports for tariff-affected sectors and workers in conjunction with the federal government, which is further outlined in the Fall Economic Statement. The suite of new initiatives is designed to support the Ontario steel industry, the automotive industry and to build out the critical mineral supply chain. Measures include a new funding commitment of over $5 billion for a Joint Steel Action Fund to diversify production to defence, advanced manufacturing, energy and trade.  An additional $2.5 billion over two years will also be provided to automative manufacturers (up to $1.5 billion from the federal government and up to $1 billion from the Government of Ontario) and $1 billion from the federal government over three years for Ring of Fire infrastructure. The province and the federal government also announced that they are establishing industry task forces to help the sectors navigate this complex economic environment.

Since April 2025, the Ontario government has invested nearly $30 billion in supports and programs for sectors, businesses and workers impacted by the U.S. tariffs. Examples of support programs include six-month interest and penalty free deferrals for selected provincially administered taxes, the Ontario Together Trade Fund and the Trade-Impacted Communities Program, which helps businesses diversify trade markets, and the Protect Ontario Financing Program, which provides up to $1 billion in working capital loans to Ontario-based businesses. The government is expanding access to these programs in response to new U.S. tariffs and product bans. The 2026 Fall Economic Statement also includes reference to an upcoming Protect Ontario Account Investment Fund with further information expected in the next Ontario budget.

Economic Competitiveness and Affordability

In addition to targeted supports designed to support the industries most impacted by tariffs, the 2026 Fall Economic Statement introduces and re-introduces select measures to address overall affordability and economic competitiveness in the province. 

The central pillar of the 2026 Fall Economic Statement is the Ontario Competitiveness Tax Cut. Branded as part of the province’s multi-year Tax Action Plan and the provincial extension of the federal Productivity Mega Deduction, the tax cut lowers the cost of capital investments for Ontario businesses and provides over $8 billion in additional relief over the next five years. When combined with the accelerated write-off measures, the Ontario Competitiveness Tax Cut brings the total Ontario tax relief for capital investments to more than $12 billion over the next five years.

This measure is a welcome one. As laid out by CPA Ontario in Tax Reform for Growth in Canada, accelerated write-offs will make the province more attractive for investment. The inclusion of patents and software in the list of assets will be of particular benefit to tech start-ups looking to commercialize their innovation and scale up their enterprises.

CPA Ontario encourages the government to continue moving forward with its Tax Action Plan, to look for opportunities to flatten tax brackets and to work with the federal government to reduce personal and corporate taxes in the next budget.

The government also has a focus on ensuring cost management across the provincial agency sector. In addition to an ongoing provincial agency hiring freeze, the government is undertaking reviews of nine key public agencies, including Metrolinx, Workplace Safety and Insurance Board and the LCBO, to assess operational efficiency, financial performance and long-term sustainability.

The Province commits to further extending the temporary 13 per cent relief on the Harmonized Sales Tax (HST) for the purchase of new homes up to $1 million dollars, as well as removing the full 8 per cent provincial portion of the HST for first-time buyers.

Finally, the government is capping the monthly credit of the Ontario Electricity Rebate at 1,200 kilowatt-hours for residential customers, effective May 1, 2027.  

Legislative Changes

Ontario's Beneficial Ownership Registry

As CPA Ontario has highlighted previously to members, and has helped to shape through our engagement with government, Ontario is implementing a Beneficial Ownership Registry for privately held business corporations that will take effect in 2027.

Today, privately held corporations must maintain information about individuals with significant control, but this information is not filed through a centralized provincial registry. Through the FES, the province is introducing amendments to the Business Corporations Act that will require these businesses to collect additional identifying information about individuals with significant control, including citizenship and, in certain instances, an address for service. The amendments also extend reporting exemptions to include certain wholly-owned subsidiaries whose parent entities are already subject to transparency and reporting requirements. Through regulation, the exemptions can be expanded as necessary.

Through amendments to the Corporations Information Act, privately held business corporations will be required to submit information about individuals with significant control to Ontario's Beneficial Ownership Registry. The public will be allowed limited access to this information and authorized entities, like law enforcement and regulatory bodies, will have full access to the Registry. The amendments will also contain safeguards to protect privacy.

Property Taxation and Assessment Legislative Changes

The FES introduces amendments to the Education Act, Municipal Act, 2001, City of Toronto Act, 2006 and the Assessment Act to streamline the process for education property tax remittances for municipalities and school boards, starting in 2028, which will lessen administrative burden and costs.

Amendments to the Assessment Act are also forthcoming to enable the Municipal Property Assessment Corporation to deliver a centralized electronic platform for public access to select property assessment information online.

Also, the FES clarifies that the province-wide reassessment of properties will continue to be deferred. No date is provided for when this reassessment will take place.

Improving the Presentation of the Taxation Transparency Report

The Ontario government produces an annual report setting out the estimated annual cost of expenditures delivered through the tax system (a requirement under the Fiscal Sustainability, Transparency and Accountability Act, 2019). Starting with the 2026 edition, the report will now present the estimate for the current year and provide the revised estimates for the three previous years, which will reflect the latest taxation and economic data. This change in reporting will better enable analysis of expenditures made through the tax system over time and will better align with the time periods presented in the Budget and the Fall Economic Statement documents.

Conclusion

The 2026 Ontario Fall Economic Statement is the story of a government focused on resilience and stability: keeping the province afloat under the weight of U.S. tariffs and economic uncertainty. While the government is taking steps to address some of the province’s longer-standing challenges, including the tax system and the efficiency of public services, the challenge of the current moment is also an opportunity to be more ambitious. With no signs the tariff storm will blow over anytime soon, reaching a higher growth trajectory will require further action in the near term.