Ontario is investing $500 million in critical minerals processing and bolstering manufacturing incentives as part of a broader strategy to shield workers and businesses from U.S. tariffs, according to the province’s 2025 budget released Thursday.
Finance Minister Peter Bethlenfalvy unveiled the budget titled “A Plan to Protect Ontario,” which aims to fortify the province’s economy while maintaining a path to balance the budget by 2027-28.
“Our government is delivering on our mandate to protect Ontario and help workers and businesses weather the storm, while creating the long-term foundations for a strong, resilient and competitive economy,” said Bethlenfalvy.
The budget comes as Ontario faces economic headwinds from U.S. trade actions, with the province projecting modest real GDP growth of 0.8 per cent in 2025, followed by 1.0 per cent in 2026.
Manufacturing sector support
The government is enhancing the Ontario Made Manufacturing Investment Tax Credit (OMMITC), temporarily increasing the rate from 10 per cent to 15 per cent for Canadian-controlled private corporations and expanding eligibility to non-CCPCs. This measure will provide an additional $1.3 billion in support over three years.
“These proposed changes would help businesses lower their costs by providing an additional $1.3 billion in support over the next three years,” the budget document stated.
The government is also creating a $5 billion Protecting Ontario Account to support businesses facing tariff-related disruptions, with up to $1 billion available for immediate liquidity relief.
Skills training and worker support
The budget allocates an additional $1 billion over three years to the Skills Development Fund, bringing the total commitment to $2.5 billion. These investments aim to help organizations deliver better training programs and build new training facilities for skilled workers.
For workers impacted by trade disruptions, the government is investing $20 million to establish new training and support centres, while providing $50 million for the Better Jobs Ontario program, which includes a fast-track stream for job seekers in trade-impacted sectors.
The province is also investing $750 million over five years to fund up to 20,500 Science, Technology, Engineering and Mathematics (STEM) seats annually at colleges and universities.
Critical minerals and Indigenous partnerships
To strengthen domestic supply chains, the government is creating a $500 million Critical Minerals Processing Fund to ensure minerals mined in Ontario are processed within the province.
The budget also triples support for Indigenous equity partnerships to $3 billion through the renamed Indigenous Opportunities Financing Program, expanding eligibility beyond electricity to include energy, pipelines, mining, and other sectors.
Tax relief measures
For consumers and businesses, the budget proposes to make permanent the current gasoline and fuel tax cuts, which were set to expire on June 30, 2025. This would save households about $115 annually on average.
The government is also removing tolls from Highway 407 East, which it estimates will save daily commuters about $7,200 annually.
Infrastructure investments
The budget outlines a 10-year capital plan totaling over $200 billion, including approximately $61 billion for public transit, nearly $30 billion for highway projects, and approximately $56 billion for health infrastructure.
Ontario’s deficit for 2024-25 is projected to be $6.0 billion, $3.8 billion lower than previously forecast. The government projects 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.
“Today, with the 2025 Budget: A Plan to Protect Ontario, we put forward a plan that reflects the government’s vision and the mandate we received from the people of this great province to do whatever is necessary to protect Ontario workers, businesses and communities,” said Bethlenfalvy.
