Ontario’s Fall Economic Statement a gift to the corporate class

Ontario’s Fall Economic Statement warns of the worst deficit projection since the 2020-21 COVID-19 pandemic shutdowns: the deficit will mushroom from $3.1 billion to $16.9 billion.

It was a very business-friendly fiscal update, with the Ontario government promising a spate of business tax relief in the face of Trump’s tariff war, which impacts the manufacturing sector of the province’s economy.

By far the most consequential item in the whole update is the province’s commitment to mirror the federal government’s unwise tax policies on capital cost allowances with the Ontario Competitiveness Tax Cut. Ontario intends to lower the cost of capital investment by allowing businesses to immediately write off 100 per cent of the value of many new assets, such as machinery, equipment, or computer software. This policy will provide more than $8 billion in tax relief over five years to businesses that qualify. Combined with a similar tax cut announced in the 2026 budget, these measures will cost Ontario coffers more than $12 billion over five years.

On top of those breaks, the province is implementing a $1.17 billion tax cut for small businesses (from 3.3 per cent to 2.2 per cent over a three-year period), which it promised in the 2026 budget. Adding it all up, it amounts to $13.17 billion in business tax cuts spread out over five years.

Support for workers who are impacted by the tariff war, in contrast, has been paltry. Nearly all the provincial government’s policies in response to tariffs have been aimed at supporting businesses owners, but it has directed very little to workers. While the Ontario government is pulling out all the stops for businesses, there was no new announcement for workers in the fall statement.

Instead, the Fall Economic Statement is a brag book of gifts to the corporate class. They brag about cutting Ontario’s business marginal effective tax rate by 75 per cent, from 14.4 per cent to just 3.6 per cent, compared to the OECD average rate of 19 per cent. They also brag about their business-first policies over the course of their tenure, giving businesses $10.2 billion in “savings and support” in 2026 alone, with policies such as:

• Delaying the 2018 minimum wage increase from $14 to $15, crowing that wages are lower today than they would have been had that wage increase gone ahead as the previous Liberal government had promised.
• Further reducing employer premium rates for the Workplace Safety and Insurance Board (WSIB), the main government body responsible for providing support to injured and ill workers and their families. Employers have saved billions in WSIB contributions since 2018, meaning there is less available to workers when they need it the most.
• Cutting employer payroll taxes meant to fund health care and education. The 2020 Ontario budget raised exemptions to the Employer Health Tax and cut the Business Education Tax Rate, saving businesses hundreds of millions annually, while education and health care are chronically underfunded. 

A business-friendly statement, not a worker-friendly one

The news hasn’t been good for workers. Ontario’s industry association, Canadian Manufacturers and Exporters, says about 50,000 jobs have been impacted by the tariff war so far. Statistics Canada says 27,200 manufacturing jobs in Ontario were lost between December 2024 and December 2025.

We know more losses may be underway this year. Last year, the Financial Accountability Office of Ontario (FAO) predicted “57,700 (-6.8 per cent) fewer jobs in 2026” in manufacturing compared to 2025.

We have already seen 1,000 workers laid off by Algoma Steel, jobs lost to Stellantis’ decision to move Jeep production from Brampton to the U.S., and the loss of more than 700 jobs due to layoffs at GM’s Oshawa plant.

Job casualties are piling up in Ontario—but you wouldn’t know it from the province’s economic statement.

Funding corporations with public service cuts

While the provincial government is giving businesses all the love, it is neglecting public services. The chart below shows just how lopsided Ontario government investments are as the province weathers the tariff storm.

Base funding amounts for education, health care, and post-secondary education remain unchanged from the 2026 provincial budget. They were underfunded then and are still underfunded now.  

The FAO estimates Ontario would need to increase education spending by an average annual rate of 2.1 per cent over the next three years just to maintain current service levels. But that’s not what’s happening.

In the 2026 provincial budget, the province projects Ministry of Education spending will only increase at an average annual rate of 0.6 per cent between 2025-26 and 2028-29. Compared to the FAO’s cost driver projection, this results in a funding shortfall of $0.7 billion in 2026-27, $1.2 billion in 2027-28 and $2 billion in 2028-29. The FAO also predicts school board operating funding to decline by about $365 per student (2026-27 constant dollars) between 2025-26 and 2028-2029. The CCPA has estimated the accumulated school budget shortfall since 2018 reached a whooping $6.5 billion this year.

Those are, effectively, public service cuts.

It’s a similar story for health care services. In the 2026 provincial budget, the Ontario government projected health care spending will increase at an average annual rate of 3.2 per cent between 2024-25 and 2028-29. The FAO says it will result in a $2 billion funding shortfall in 2027-28 and a $3.8 billion shortfall in 2028-29. The FAO predicts the rate (per 100K people) of hospital beds, long-term care beds, and funded nurses will decline between 2025-26 and 2028-29.

Again, more public service cuts.

Same thing with post-secondary education, where the FAO projects a funding shortfall of $1.7 billion in 2027-28 and $2.2 billion in 2028-29—at a time when universities and colleges are reeling from the loss of international students due to new federal rules.

If we add up the funding shortfall amounts for these programs—based on FAO estimates—between 2026-27 and 2028-29, we get a total shortfall of $13.3 billion over three years for vital public services. Bear in mind, that amount would be required to maintain current service levels, to say nothing of solving the crises currently afflicting Ontario’s public services.

There’s also a list of other funding shortfalls that are getting swept under the rug, including (but not limited to) real ODSP spending per case is declining over time, the province is failing to meet its commitment to lowering child care fees to $10-a-day, and post-secondary education students are worse off thanks to OSAP cuts.

Businesses aren’t the only entities impacted by the tariff war and the rising cost of living—real people are struggling to pay the bills. They’re getting a pittance from the Ontario government.

About the authors

Ryan Romard

Ryan Romard (he/him) is a researcher with the Canadian Centre for Policy Alternatives’ National Office. A sociologist and research analyst, he uses data to explore issues related to labour, public services, education, and the economy. He has several years of experience conducting survey research in Ontario’s public school system and was the CCPA’s 2022 Progressive Economics Fellow.

Trish Hennessy

Trish is the Director of the Think Upstream project and a senior communications strategist with the CCPA National Office. She is focused on social determinants health, sustainable development goals, income inequality, decent work, an inclusive economy, and wellbeing budgeting. Trish was the founding director of the CCPA Ontario and co-founded the Ontario Living Wage Network. She was the founding director of the CCPA National Office’s growing gap project, which began in 2006. Trish was a former newspaper journalist, originally from Saskatchewan but she now lives in Ottawa. She has a B.A. Sociology from Queen’s University, a B.S.W. from Carleton University, and an M.A. in Sociology from OISE/University of Toronto.