The Agenda with Steve Paikin (Audio) - Will Ontario's Budget Meet the Moment?

Episode Date: March 27, 2026

Hundreds of pages and billions of dollars, Ontario's 2026 budget will shape daily life across the province, yet its true priorities are not always obvious at first glance. TVO Today's John Michael McGrath breaks down what's in the budget and why it matters, before a deeper examination of what the numbers reveal about this government's values and fiscal health. Then, as economic uncertainty grows, we ask whether Ontario is prepared for what lies ahead, with analysis from Ricardo Tranjan of the Canadian Centre for Policy Alternatives and Rosalie Wyonch of the C.D. Howe Institute.See omnystudio.com/listener for privacy information.

Hi, I'm Nam Kiwanuka, host and producer of mistreated, a podcast on women's health. There just hasn't been a lot of money put into researching women's health issues. If women are in pain, it's hysteria, it's an emotional issue. And this is what you see consistently. Women's health is not taken seriously. How did we get here? Find us wherever you get your podcasts, and be sure to check out the video version of the show on the TVO Today YouTube channel. Hope to see you then. When TVO first went on air in 1970, the idea that public television could have a positive impact on learning was visionary. From beloved kid shows that sparked the joy of learning, pioneering must-see favorites exploring society and culture,

and series that made navigating life in Ontario a little easier, TVO's commitment to lifelong learning has stood the test of time. Renew your support now and help preserve this legacy. Visit TVO.com.me slash 2026 renewal to make your donation today. Today was a big day at Queens Park as finance minister Peter Bethenvolvey delivered Ontario's 2026 budget and it's a big document with some even bigger numbers, billions in spending all at a time when the economic outlook is uncertain to say the least. We're going to look at what the budget tells us about the province's finances, about the government's priorities and what it could all mean for you. Welcome to the run-down.

Hundreds of pages, billions of dollars, the province's 2026 budget will shape the lives of Ontarians, but it's not something that makes for quick or easy reading. So, TVO today's John Michael McGrath is here to break down the key numbers and why they matter. Hello, sir. How are you? Good. How you doing? Not too bad. You have been quite busy. Since 930 this morning, you have been up close and personal with the budget. There we go. A plan to protect Ontario. Yes. Let's start with the basics here. What are the big headline numbers from this year's budget? So the biggest number coming out of this year's budget has to be the deficit.

The government had been projecting a smaller deficit this year than they've ended up with. We are now looking at a $13.8 billion deficit for this year. That is not just larger than they were projecting. They were projecting like a $7 billion deficit, but it's also larger than last years. So we have got some data right there. You can see. We're comparing. the projections from last year's budget versus the projections from this year's budget.

So the deficit was projected to shrink hopefully by next year. In last year's budget, they were projecting to be balanced by next year. They are now projecting a $6.1 billion deficit for next year. We might be balanced by the following year. That would be the 2028-29 fiscal year. If the government accomplishes that, this might sound kind of churlish, but it would be the first time that the PCs have presented a balanced budget since they won in 2018. All right.

Some other big numbers that we should keep our eyes on. Right. So a few things here. Interest on debt is one of the big drivers of the deficit. The government says that they've accumulated a lot of deficits. Some of that was COVID-related. Some of that has been the result of tax cuts and other spending priorities. But overwhelmingly, the biggest driver of new spending has been health care.

So we have an aging population in Ontario. This is not a secret. We've known for decades that that was going to drive increases in health care spending. And to put it one way, that bill is coming due. Just to give you some examples here, the spending on health care just in the last two years has increased by $10 billion. It is now, this year will be over $100 billion just in health care spending alone. And this is usually the biggest expense. Yeah, healthcare is always the biggest expense in the budget, but it has grown rapidly.

I'm not the oldest member of the Queens Park Press Gallery, but when I first started covering, like the first budget I covered in 2014, all Ontario spending. The total government expenditure was, I believe, $130 billion. Okay. So healthcare is now almost as much as the total budget was like 12 years ago. So obviously that's a big driver. The government also has a big capital spending plan. Obviously, the Premier's been quite proud and public about wanting to build bridges and roads and highways and transit, all of those things. But even a large chunk of that capital spending plan is also health care.

It's hospitals, right, and long-term care homes. So these are costs that, you know, any government would, almost certainly any government would have to bear. But as I say, we have an aging population. This is part of what that means. but it is one of the primary drivers of increased expenditures. By contrast, education spending is going up maybe one or two billion over the next several years. Post-secondary education spending is actually projected to fall, despite some of the commitments this government has made.

So, yeah, healthcare overwhelmingly the driver of more spending. All right. I want to know if there was any surprises, because in recent years, big elements of the budget usually announced maybe a week in advance of the budget. Was there anything this year that was? was sort of kept in the wraps that took you for a surprise. Well, so I guess one surprise, you know, journalists periodically, we have, like, you know, betting pools.

I know that some of my colleagues in the press gallery were betting on what the title of the budget would be this year. And I just want to say, they reused the title. Ah, okay. The 2025 budget was also a plan to protect Ontario. The 26 budget is a plan to protect Ontario. That's the first time I've seen that in 12 years, that they just decided to reuse the title. but no, one of the biggest items that was not previously announced in the, you know,

they always spent like two weeks before the budget announcing some of their bigger items. The one that they did not announce previously was, and pardon me, I'm just going to confirm the title with my notes, it's the Protect Ontario Account Investment Fund. Previously, the government had announced the Protect Ontario Fund, or sorry, Protect Ontario Account. that was a $5 billion fund to assist businesses and employers in response to Trump's tariffs. Only $1 billion of that $5 billion got used. So they're now announcing this investment fund that will use the remaining $4 billion as seed capital.

And they want to try and encourage private capital to come in. And they're going to look around for more sort of future-facing investment opportunities. They want to work on supply chain resilience. They want to try and find ways to invest in in some industries that maybe haven't traditionally been part of Ontario's industrial makeup. You can probably think of like AI and other more sort of advanced industries.

They want to try and lure them here to Ontario and that $4 billion will be the seed capital with which they will do that. One of the big announcements that happened yesterday was the expanded HST rebrand. for new home construction. That was yesterday morning in Mississauga. What's the government hoping with that? So they're hoping to resuscitate the province's housing numbers. They've been quite dismal and unfortunately the numbers in the budget have been revised downward yet again.

Just to give you a scale of the context here, the government's estimate is that this HST rebate, which is being expanded from one that was announced last year, they expect that to lead to the construction of 8,000 new homes between now and 2031. Not a lot of homes. Not a lot, not enough to get us out of the hole we're in. By contrast, just the estimates for the new housing starts for this year in this budget were revised downwards by 10,000 units. And a further 20,000 units were lost in downward revisions for next year and the year after that. So I write about this for our website. The housing sector, no, I will say fairly. to the government. Some developer groups are much more positive about this outlook. They welcome

these changes. They say it could help the housing sector turn the corner. They may know better than me. I'm kind of pessimistic on it so far. People can read about that at the website. But we should also add that on the same day that the government did announce the budget that's earlier today, the federal government did also announce $1.7 billion in new funding. That appears to be aimed at helping municipalities get rid of development charges. This has been something that both the provincial and federal government have been very serious about, have been very serious about, pardon me. It's primarily an Ontario and BC problem.

Most other provinces don't rely on development charges as much as we do here. And so some of that money will presumably be coming to Ontario, but we don't know too many details about that yet. All right, John Michael, we are going to have to leave it there. Appreciate your time on the program. Now, you've got two articles on the website. Steve Scott, another article. You will break down the budget all on On Polly tomorrow.

Yes, and we'll have the finance minister, Peter Bethan Falby, on the podcast tomorrow. There we go. John Michael, really appreciate it. Thank you so much. Budgets are financial documents, and they're obviously political ones too. So how healthy are our finances as we head into a period of even greater economic uncertainty. And what does this budget tell us about the government's priorities? Ricardo Trenjin is Ontario Research Director at the Canadian Center for Policy Alternatives.

Rosalie Wanch is Associate Director of Research at the CD-How Institute. Great to have you both in our studios. How are you doing? Great. It's always an exciting day on Budget Day. Budget day. Absolutely. All right. Ricardo, I'm going to start with you. The government is embracing deficits for another year. It's $2.3 billion higher for 2526, increases to $6 billion in 2627, kicking a balanced budget down the line a little bit further. Help us understand what's pushing the spending a little higher in this budget. There's not that much spending pushing the deficit. Yes, we are trying to keep up with inflation pressure. We're trying to keep up with population growth on some files. Mostly, we're not. Not in the key.

not in health, not in education, not in community and social services. But a lot of the problem that we have right now is that we have not been able to increase our fiscal capacity. We're not being able to increase how much we generate in taxes revenues so that we can not just keep up with the pressures that we have right now to maintain the services, but ideally to improve the services that we're providing to Ontario as well. Rosalie? Well, I'd mostly agree with that. there wasn't a ton of new spending in the budget, but that the government has committed to

a balanced fiscal path, and the deficit is lower than it was projected to be last year. So they are clearly committed to that. And really, I think that it's about the economic challenge and maintaining possibly some fiscal firepower for some non-vegetary emergency response things that may or may not happen over the next year. So I think that they're sort of going for a prudent middle ground, but the fact that the deficit is lower than it was. What do you mean by that? Help us explain it. What do you mean by that? Sorry, yeah. In the fall economic statement or in budget 2024, the budget was projected to be bigger in this coming year than it was. And as you said, we've kicked that deficit is going to grow a little bit further into the future, but they're

more or less continuing on the same fiscal path that they were before, but it looks a little bit better. With that being said, that means that maybe they could have put some of that money into program spending, but I think given the uncertainty of the global and economic situation, it's probably best to keep your powder dry. Okay. Let's talk affordability. Ricardo, was there any measures in the budget that were targeting affordability that you saw? Mostly we haven't seen anything that would make a substantive impact for families. Yes, there are macroeconomic factors that are constantly changed. Yes, uncertainty has become the new normal, but for a lot of families, for a lot of Ontario families,

the crisis is already here. For people trying to have access to a family doctor, for kids in classes that are completely oversized with 30, 35 kids, for people relying on social. resistance rates that have been frozen since 2018 for people trying to pay rent. The crisis is already here. So the moment to invest was now, actually, it was a few years ago, but now we do. And we haven't seen that. So from an affordable perspective, there is very little, if anything, in this budget.

Rosalie, was there anything in the budget that would help Ontario's were struggling with the higher cost of living right now? I think it's one of those things that involves so many different aspects of life, that it is difficult to have, say, a single budget item or program that would drastically affect affordability. But I do think that, you know, expanding some tax relief on new home purchases is a specific one just around affordability. Housing has been a major concern for people. And I would also say that part of the affordability challenge right now is around just the spike in oil prices, making everything more expensive. And so I, I'd have a lot of the affordability challenge right now.

And so I would maybe say that the tax relief for small businesses actually will really help the businesses that are the most likely to be disrupted and have the hardest time managing trade disruption. And then also if that, if we get strong growth in the small business sector, then hopefully that will generate those government revenues that can help us get a little ahead of this curve. Okay, well, you bring up housing, so let's talk about it. HST break for buyers of new homes.

Does this move the needle in terms of stoking demand, potentially more construction? I cannot think of a least effective way to improve housing security. Why do you say that? Because we're spending $1.4 billion to provide a tax rebate to folks buying newly built homes. And it can be anyone. It can be your first house. It can be your second house. it can be your 10th house if you are an investor,

as the Premier emphasized yesterday. The provincial government has the authority over tenancy regulation. It has authority over social housing. If we were to focus on those two areas, we could do a lot. With $1.4 million, we could build a significant number of social housing. With $0, we could tighten rent controls and improve affordability

for a third of Ontario the rent. And yet, we're not doing that. We're providing a tax break that likely will fail on its own allegedly goal, which is to improve supply. The previous measure, very similar measure, didn't achieve that goal. And we are not sure that it will even achieve its stated goal. It's an awful, awful policy in housing.

I studied a lot of housing. This is not housing policy. This is simply corporate welfare. I want your take on that. We're talking about 8,000. homes, I believe is what the number was in terms of what that HST break would allow for. But what do your thoughts on that? Well, and whether it's actually 8,000, I think it is doubling down on their previous policy.

And it is intended to stimulate new builds more than it is really around housing affordability. So if it's going to be effective around the total supply of housing, then that will take some years to show up. but also those that are currently planning to buy a new house, it will make it more affordable for them. Whether they needed that affordability break or not, it does make it cheaper. Okay. Let's move over to small business,

as you were talking earlier. Ontario plans to cut the tax rate for small business to 2.2% from 3.2% on par with, if we look at other provinces across the country, how significant is that to a small business? What does that look like? Would this help? them, hire new staff, expand? I think that one of the main things that you see across all

small businesses and the surveys across provinces is that they're continually cash poor, as in they're strapped for additional resources. And so giving them some tax relief, particularly when their costs are increasing in ways that they can't manage the same way that big businesses do. Here I'm talking about trade policy and reorienting supply chains and similar things. I think relief for small businesses, what they will spend that on will be investing in their businesses and keeping themselves afloat. Hopefully they'll be able to grow and expand and hire new people, but it will help if they're facing tough times to make sure that they don't have to reduce their business or reduce their staff. And particularly because they're extra vulnerable,

I think that this relief in this economic situation is a good move. All right. Ricardo, you're taking on small business, tax? I don't have much to add, but I agree that if we're going to have a tax break that is probably one of the best ways to put it. All right. Let's talk about what takes up the biggest chunk of the budget. Let's talk healthcare. Specifically, the government's doubling spending for home and community care to $2.2 billion over three years. What do Ontarians get for that investment, Ricardo? The sector is desperate in need of more funding, right? So every new funding that comes in, will make a positive impact and is much welcomed.

Could be this particular sector, could be other aspects of health care. My main concern here is that when you adjust the current figures for inflation, for population growth, and for aging, which is really important in health, we have only a 0.5% increase in the real allocation this year, and that drops next year. Next year we have a 1.6% cut in real health space. as forecasted right now. So we're not investing nearly enough.

And the second piece of this, it also merits where this funding is going. We have seen with this government, and my institute has documented this well, we are starting to pay more and more for or subsidize in different ways for-profit care. And that's a slippery slope, and we know that funding private care won't buy us as much health in return. Rosalie? I would fully agree that the home care sector in Ontario is in need of resources. It's very obvious that there are unmet needs. And also that if we could increase home care services,

we could likely delay people requiring LTC. You can prevent some unnecessary hospitalizations. And so really, if there's a place in the healthcare sector that can have really positive benefits further along the sort of care continuum, that investing in home care is absolutely a good place to do it, and that we still have an aging population. So I would agree that it going back down is actually more of a concern, but the investment this year is welcome.

And I would say we should likely continue to expand in that space, particularly because that population and that need continues to expand. And last I checked, the long-term care wait list hadn't gone below 40,000 in at least a year. And so, really, there is quite a lot of need. And so will this be enough to fully address that? Likely, no, but it's a step in the right direction. All right, let's stay in healthcare.

The government says there will be $64 billion over the next 10 years for health care infrastructure. That includes about 50 hospitals to increase their beds. Is that the right move? Considering that if you've followed the headlines in Ontario, you know that a lot of hospitals are struggling to stay afloat, many are shedding staff. Is that the right move, Rosalie? Well, I would say that it matters more what kind of beds they are because there is the risk

that we have high volumes of alternate-level care patients. Those are patients that could be better cared for in long-term care in the community, but they're in hospital beds. And depending on the hospital, those rates could be 10% up to 40% up to 40. percent of the beds are currently occupied by those types of patients. So more beds can be beneficial, but not if it's really just to warehouse ALC patients where it's expensive and they could get better care. But that being said, most hospitals or quite a few hospitals in Ontario are in a deficit position and are in need of infrastructure upgrades some additional flexibility so that they

can manage those staff shortages. And so spending money in our hospitals is very much also needed. I'll get your take on this, but I want to add the Financial Accountability Office of Ontario has warned about health care staffing levels at the current funding. What could the government have done to address that? I agree that what kind of beds we're going to get in matters a lot. And to reiterate my earlier point, I'm also concerned that this will be public. run hospitals and clinics and not yet more privately run clinics. We announced four last December for orthopedic surgery,

and I hope not to see more of those because our money will go farther. I'm sorry, I forgot the second part of the question. Financial Accountability Office of Ontario is one of that healthcare staffing levels under the current funding model are not, it's understaffed. What could the government have done in this

budget to address those numbers. One of the key things here that we haven't had a chance to talk about it, it's post-secondary training, right? This government has recently made some very draconian changes to the OSAP, which is the Ontario Student Assistance Program that helps students to get through post-secondary education. We also have seen that this government has not come through it for post-secondary institutions, including colleges, since the cap on international. national students. So overall, we have a system where post-secondary education is becoming more

expensive, be at university, be at college, their class assistance for students to go through. And so a lot of the professionals that could be, the potential professionals of other workers who could be looking at training that it's long, that is difficult, but that eventually pays off and that delivers the services that we need. A lot of them right now are second guessing. Should I invest, can I afford how much debt will I have to take in order to become a nurse, in order to become a health professional? So I think, you know, the right investment here on this case would have been on post-secondary education, college training of all sorts, but we haven't seen that either, unfortunately. Was there anything that the province got right

in the budget in the education portfolio, in your eyes? In the educational portfolio, when you look at education right now, the only thing, that is driving investment up is the child care program that has been a federal initiative. We haven't seen the same level of investment at either K-12 schools, and we also have not seen the same level of investment in post-secondary training. All right, Rosalie. I might bring it back to health care a little bit and say that the government didn't necessarily have new initiatives in this budget, but there are initiatives that help with, that are directly related to health labor force and the volume of care providers that are available.

So they've opened slots for nursing training, and there's grants to potentially cover all of the educational costs for physicians that agree to practice family medicine in the province. And one thing where I think we should give credit is that the Ontario government last year, and they did add a couple hundred million to it in this budget, made, as far as we can tell, the largest investment in the history of the country in specifically primary care, and that though primary care attachment is still very much a challenge in this province,

particularly with an increase in population and other things. Looking across the country, Ontario has the best results. They've actually matched more people with primary care, and they're, I would say, at least keeping pace with population growth. And so it is still a lot of people that need access, but we've made real headway on that in the last year. And that was because of a historic investment in the last budget. Okay, noted on there. One thing that stuck out to me in the budget, a new program called the Protect Ontario Account Investment Fund.

The government has allocated $4 billion for that. Can you help us understand what it is and how it will work? Well, really, I think it's another one of those things that's in line with, if you're wanting to invest in capital and you're running a business and you need new buildings, new equipment, new machinery, that can lead to more jobs, more production, as we mentioned before, that small businesses might not have that cash on hand and that creating, basically creating programs where you can get low interest, government loans, grants, and whatnot to make investments is realistically a good relief.

What type of industries are we talking about here? I'm going to admit I have not actually gotten through the entire 292 pages, so I have, I don't have the details on that one at this exact moment. All right, Ricardo, can I get you in on the investment fund? There is not a lot of information on this one yet. I'm relieved. I think it could be a good thing, and I hope it will turn out to be a good thing, you know, to use a cliche, you know, the devils are in the detail. What kind of industry are we going to be supporting?

What's the process to assess those fundings? Are we going to be invest mostly in infrastructure and other kinds of production that tend to be Mayo-dominated jobs, or are we going to keep in mind also other types of industries and other sectors that generate really, create really good jobs, not only for a particular population group, but a broader sector of society. So it could be a good thing, and I hope it will be, but we need to watch this one closely. All right, I've got less than a minute left, but I do want to know, you know, there are over 400 municipalities in this province. They've had their eyes on this budget as well. What did municipalities?

get in this budget this year. Do we know anything, Ricardo? I don't. That's the part that I, the one who have not had time to look at that closely. That's fair enough. Yeah, and I will say on my quick scan, there wasn't anything in particular that jumped out at me, but I think that it's likely that given, shall we say, local Toronto issue, intergovernmental issues around sort of how Toronto and the province are interacting over various things. I think there might not be a spending

item, but there will be probably more on that file to come. All right. All right. We're going to have to leave it there. Ricardo, Rosalie, really appreciate your insights on this. There's a lot of reading to be done on all of our parts. And we are looking forward to seeing how this budget unfolds as well. Appreciate your insights on this one. Thank you so much.

Thank you. Before we go, we here at the rundown wanted to take a moment to send our thanks and best wishes to someone who's been a huge part of our team. John Ferry. He's retiring this week as vice president of programming and content after 10 years with TVO. The agenda, the rundown, big if true, and so much more, he's been the guiding force behind what we do and championed our journalism. We'll miss you, John. We wish you all the best

in this new chapter. And for us here at The Rundown, that's all we have for this week. I will see you next week.