OPINION: Ford government failed to keep fiscal powder dry — now Ontarians will pay the price

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The Ford government last week released its 2025 budget — it’s first since getting re-elected for a third term — and once again failed to balance the books, resulting in more borrowing and more debt on the backs of Ontarians.

Premier Ford is quick to blame Trump’s tariffs for Ontario’s fiscal woes, but in reality, his government dug its own hole long before the trade war began.

The government will blow the budget this year with a projected $14.6 billion deficit for 2025/26 — $13.1 billion larger than the $1.5 billion deficit the government projected in its fiscal update prior to the provincial election in February. The budget also projects an additional deficit of $7.8 billion in 2026/27 — again, in stark contrast to the government’s previous projection of a $0.9 billion surplus for that year — before running a slim $0.2 billion surplus in 2027/28.

Consequently, this year provincial debt will reach a projected $460.8 billion or $28,184 per person, the second-largest per-person debt of any province (except Newfoundland and Labrador). And debt interest payments will reach a projected $16.2 billion this year, which is more than the government plans to spend on post-secondary education.

In other words, the government is drowning in red ink and Ontarians will pay the price. But it didn’t have to be this way.

Of course, the tariff war has taken its toll. According to a recent report by Ontario’s Financial Accountability Office, due to U.S. tariffs, the province could enter a “modest recession” this year and see lower economic growth in 2026 and beyond. As a result, government revenues may wane and spending on social assistance programs (such as Ontario Works) will increase.

But had the Ford government, which was first elected in 2018, been more responsible with Ontario’s finances, it would have been in a much better position to absorb the fiscal effects of U.S. tariffs or any other economic shock. Remember, the Ford government has missed multiple opportunities over the years to balance the budget, which would have improved provincial finances and increased its ability to manage the costs of an economic downturn. (For example, in 2024, due to an unexpected surge in revenue and an unexpected decline in debt interest costs, the government could have implemented a small spending reduction to balance the budget.) However, in each case, Premier Ford chose to increase spending and borrowing, and run deficits during six of his seven years in office while racking up approximately $105.1 billion in new debt.

Simply put, provincial finances were already in bad shape due to the Ford government’s failure to control spending during its first two terms. Rather than being the root cause of today’s red ink, the tariff war is simply making a bad situation worse. In his budget speech last week, Finance Minister Peter Bethlenfalvy claimed the government has practised “fiscal prudence” in recent years. But by squandering multiple opportunities to balance the budget and choosing to spend beyond its means, the Ford government has left Ontario vulnerable. Now, with the province staring down Trump’s tariffs, Ontarians will ultimately pay for the Ford government’s lack of preparation and poor fiscal management.

Jake Fuss and Grady Munro are analysts at the Fraser Institute.