Ontario sets table to balance the books ahead of possible early election

Ontario has sharply lowered its projected deficit for next year, setting the stage for the government to easily be able to present a balanced budget ahead of a possible spring election.

Earlier this year, the government had forecasted a $4.6-billion deficit for 2025-26, but in its fall economic update presented today, that is now set at $1.5 billion.

The fiscal document shows revenues and expenses for that year are actually balanced, and the entirety of the projected $1.5-billion deficit is a $1.5-billion reserve.

Finance Minister Peter Bethlenfalvy says the province maintains its projection to a surplus by 2026-27.

The province attributes the more positive outlook since the spring budget to population growth, more jobs, reduced inflation, lower interest rates and a boost from changes to capital gains taxes from the federal government.

Premier Doug Ford and Bethlenfalvy have already announced two main affordability items from the fiscal update that serves as a mini budget – a continuation of a cut to the gas tax, and a $3-billion plan to send $200 cheques to every Ontario taxpayer.

Opposition critics have suggested the cheques that are set to be mailed early next year are timed to arrive ahead of a possible spring election.

Ford has repeatedly refused to rule out an early election ahead of the next fixed date of June 2026, although he has said an election will not come this year.

Ford and Bethlenfalvy say the province can afford to mail out $3 billion in cheques because of higher-than-expected revenues due to the impact of inflation on provincial sales tax money coming into government coffers.

By Allison Jones and Liam Casey