Ontario Budget Summary May 2025

Budget Overview

The Budget is set against the backdrop of the economy uncertainty created by US tariffs. The budget includes new measures to help Ontario workers and businesses mitigate the impact of tariffs and boost the province’s economy. This includes investing in infrastructure, critical mineral and resource development and interprovincial trade capacity.

The Budget also details the province’s economic outlook. In 2024–25, Ontario is projecting a deficit of $6.0 billion. Over the medium term, the government is projecting deficits of $14.6 billion in 2025–26 and $7.8 billion in 2026–27, before returning to a surplus of $0.2 billion in 2027–28. This is driven by increased investments to support affordability, critical public services such as health care, education and infrastructure, and a package of measures to protect and support Ontario’s economy in response to U.S. tariffs. Ontario’s revenue projections have also been revised lower than in the 2024 Ontario Economic Outlook and Fiscal Review, in part because of a weaker tariff-induced economic outlook.

The budget is divided into two sections: Helping Workers and Businesses Weather the Storm and Protect Ontario. Below is a selection of new measures that may interest CHG clients.

For the full Budget: Ontario Budget 2025 (PDF)

Helping Workers and Businesses Weather the Storm

Helping Businesses Through the Deferral of Select Provincially Administered Taxes
- Supporting businesses impacted by U.S. tariffs by providing a six-month interest and penalty-free period, during which penalties and interest will not apply to any Ontario businesses that choose to defer payment under select provincially administered taxes.
- From April 1, 2025, to October 1, 2025, all businesses who pay taxes under 10 of Ontario’s business focused tax programs can defer payments for taxes owed, without incurring interest and penalties. Ontario businesses are required to continue to file their tax returns on time during this period.
Creating the Protecting Ontario Account (POA), a fund of up to $5 billion designed to provide businesses with critical support to protect jobs, transform businesses, and grow strategic sectors of the economy. POA will work in tandem with federal government supports to provide up to $1 billion in immediate liquidity relief aimed at protecting Ontario businesses and workers facing significant tariff-related business disruptions. This liquidity relief will augment the existing supports and serves as an emergency backstop for Ontario businesses that have exhausted available funding.
Supporting Laid Off Workers by investing $20 million in 2025−26 to mobilize new training and support centres, providing immediate transition supports for laid-off workers, including those impacted by U.S. tariffs.
Creating the Trade-Impacted Communities Program (TICP) which will help communities and local industries in Ontario navigate significant economic challenges caused by U.S. trade disruptions. Provide up to $40 million in grants, starting in 2025–26, to support projects that help communities respond to trade disruptions and pivot to procurement from domestic and local suppliers where possible.
Standing By Ontario’s Investments in the Auto and Electric Vehicle Battery Sector
- Extending investment in the Ontario Automotive Modernization Program (O-AMP) and the Ontario Vehicle Innovation Network (OVIN), through a total investment of $85 million.
- Additional funding to continue the OVIN program delivered by the Ontario Centre of Innovation through an investment of $73 million over the next four years, starting in 2025–26. The funding will support regional technology development sites, research and development (R&D) partnerships, and incubator projects for automotive and mobility small and medium-sized enterprises (SMEs).
- Investing $12 million over the next three years, starting in 2025–26, to continue O-AMP. The program is designed to support Ontario’s automotive parts suppliers by helping these SMEs upgrade outdated equipment and adopt new tools and technologies to innovate their product lines and continue to modernize their processes.

Protect Ontario

Enhancing and expanding the Ontario Made Manufacturing Investment Tax Credit. The proposed changes would temporarily increase the tax credit rate for Canadian-controlled private corporations (CCPCs) from 10 per cent to 15 per cent, and temporarily expand eligibility for a 15 per cent non-refundable version of the credit to non-CCPCs, including public corporations, that make eligible investments in the province.
Allocating an additional $600 million to the Invest Ontario Fund to provide the agency greater stability in executing its mandate of job creation and investment attraction.
Investing over $200 million to support the shipbuilding industry and the broader marine sector, starting with the new Ontario Shipbuilding Grant Program. The program will provide non-repayable grants to Ontario shipbuilders for projects that support the shipbuilding industry’s competitiveness, business growth and long-term capacity

Critical Minerals

Investing $500 million to create a new Critical Minerals Processing Fund that will help unleash the potential of the province’s mineral sector by attracting investments in critical mineral processing capacity here at home, to help ensure that minerals mined in Ontario will be processed in Ontario, by Ontario workers.
Investing $10 million more in 2025–26 to extend the Ontario Junior Exploration Program (OJEP), which helps junior mining companies cover eligible costs for critical and precious mineral exploration and development.
Investing an additional $5 million over two years in the CMIF starting in 2025–26, to encourage innovation in the critical minerals sector and reduce reliance on foreign sources of critical minerals and their processing.
Relaunching the existing Aboriginal Loan Guarantee Program (ALGP) as the new $3 billion Indigenous Opportunities Financing Program (IOFP) to support Indigenous participation in more sectors, including electricity, critical minerals, resource development and related infrastructure components, offering generational economic opportunities for Indigenous Peoples in Ontario.
Investing $70 million over four years in the Indigenous Participation Fund, starting in 2025–26. This investment will support Indigenous communities and organizations in areas of high mineral activity to improve capacity for participation in regulatory processes related to mineral exploration and mine development.

Innovation

Launching a new round of the Hydrogen Innovation Fund, investing $30 million to unlock hydrogen’s potential to drive economic growth, broadening eligibility criteria to include electricity grid-focused initiatives, as well as applications across other sectors, such as transportation.
Investing $10.9 billion over 12 years in energy efficiency programs. Through new programs, like the Home Renovation Savings Program, the government is putting money back in people’s pockets, including rebates for upgrades like new windows, doors, heat pumps, smart thermostats and other energy saving initiatives.
Investing an additional $15 million to renew the Life Sciences Innovation Fund (LSIF) program for three years beginning in 2025–26.
To continue supporting the growth of early-stage Ontario companies, the government is providing an additional $90 million in VC funding through Venture Ontario, which includes $50 million to Ontario-based VC funds focused on technologies that support national defence and related technologies such as AI and cybersecurity, and $40 million to VC funds that will help life sciences companies and biomanufacturers innovate and grow.
Investing an additional $207 million over three years through the Ontario Research Fund – Research Infrastructure (ORF-RI), starting in 2025–26, to provide Ontario institutions with funding to acquire infrastructure and engage in global R&D.

Economic Development

Replaced its previous Rural Economic Development (RED) program with the new Rural Ontario Development (ROD) program and is doubling its funding to $10 million annually over the next two years, starting in 2025–26, for a total of $20 million. The program provides cost-share funding aimed at creating strong rural communities in Ontario and opening doors to rural economic development, by funding projects that support communities, rural businesses and entrepreneurs in addressing barriers to business development and growth.
Investing another $1 billion in Skills Development Fund which can be used to help offer training programs and skills development in partnership with unions, businesses, and other associations.
Investing an additional $50 million into the program in 2025−26 to support vocational and skills training that will enable more people to transition into in-demand jobs and support key labour market needs.
Provide an additional $10 million in funding in 2025−26 to provide targeted support to eligible Northern and rural colleges and Northern universities based on need.

Exploring the use of digital twins to improve public infrastructure project delivery. Digital twins include virtual models of physical objects or systems, which are updated with data from multiple sources. Ontario is exploring the use of digital twins by integrating data from a variety of project delivery partners for specific infrastructure projects, as well as installing sensors for the purpose of collecting and using close to real-time information.
Committing $50 million over five years through Invest Ontario to grow the province’s industrial capacity in modular construction and other innovative options to accelerate development, improve affordability and nurture home-grown industries that support quality jobs in Ontario.

Proposing to make the province’s gasoline and fuel tax cuts permanent. This measure would save households, on average, about $115 per year.

Healthcare

Exploring opportunities to expand Ontario’s Primary Care Teaching Clinics capacity to support the Primary Care Action Plan, including making available up to $300 million over the next four years, including $60 million in 2025–26.
Investing $159.6 million over three years, beginning in 2026–27, to expand the Ontario Learn and Stay Grant to a total of four cohorts of medical school students to help improve access to primary care across the province.
Making available up to $1.1 billion in additional hospital funding for 2025–26, which includes up to 4 per cent in base and targeted funding, and one-time funding for the surgical system.
Investing up to $280 million over two years to support the expansion of Integrated Community Health Service Centres. These centres will deliver magnetic resonance imaging (MRI) and Computerized Tomograph (CT) scans, endoscopy procedures and orthopedic surgeries in the community setting.