Ontario Releases 2025 Budget With New Spending on Minerals, Indigenous Financing, Tax Credits, and Infrastructure

Ontario’s Minister of Finance, Peter Bethlenfalvy, released the province’s 2025 Budget on May 15. The budget includes new spending for mineral processing, Indigenous financing, manufacturing, job training, infrastructure, as well as proposals to make gasoline and fuel tax cuts permanent and remove tolls from Highway 407 East.

These budget decisions, according to the Ministry of Finance, are intended to address recent U.S. tariffs and ongoing economic uncertainty in Ontario. The measures focus on supporting workers, businesses, and key community infrastructure.

According to the Ministry, the 2025 Budget allocates $500 million to a Critical Minerals Processing Fund meant to attract investment and keep mineral processing in Ontario. The Ministry also states that the Indigenous Opportunities Financing Program’s total loan guarantees will be increased to $3 billion, with expanded eligibility to include projects beyond the electricity sector, such as energy, pipelines, mining, critical minerals, and other resource development. According to the Ministry, the Indigenous Participation Fund will receive an additional $70 million over four years to support Indigenous participation in mineral exploration and regulatory processes. The Ministry also notes the introduction of $10 million in scholarships over three years for First Nations postsecondary students interested in resource development careers.

The Ministry states that the budget proposes to enhance and expand the Ontario Made Manufacturing Investment Tax Credit. According to the budget, the proposal includes a temporary increase in the tax credit rate for Canadian-controlled private corporations from 10% to 15%. Under the proposal, a non-refundable 15% version would also be temporarily available to certain public corporations. The Ministry estimates these changes would provide $1.3 billion in additional support over three years.

The Ministry reports that a Protecting Ontario Account will be created with up to $5 billion. According to the Ministry, this fund is intended to provide emergency liquidity relief for Ontario businesses affected by tariff-related disruptions and who have exhausted other funding sources.

According to the Ministry, funding for the Skills Development Fund will increase by $1 billion over three years, bringing the total to $2.5 billion to support training programs and to build or upgrade training centres across Ontario. Gasoline and fuel tax cuts are proposed to become permanent, which the Ministry estimates would save households an average of $115 per year.

According to the Ministry, tolls are expected to be permanently removed from the provincially owned Highway 407 East, with an estimated savings of $7,200 annually for daily commuters at current rates.

The Ministry’s capital plan includes more than $200 billion in spending over the next 10 years, including more than $33 billion in 2025–26. Planned investments, according to the Ministry, are nearly $30 billion for highway expansion and rehabilitation, approximately $61 billion for public transit, about $56 billion for health infrastructure, and over $30 billion for building schools and child care spaces.

Financial projections from the Ministry indicate a provincial deficit of $6.0 billion for 2024–25. The Ministry projects deficits of $14.6 billion for 2025–26 and $7.8 billion for 2026–27, with a projected surplus of $0.2 billion in 2027–28. Ontario’s real GDP is projected by the Ministry to rise by 0.8% in 2025, 1.0% in 2026, and 1.9% in both 2027 and 2028. The Ministry forecasts a net debt-to-GDP ratio of 37.9% in 2025–26.