Navigating Ontario's Budget 2025

Economic Outlook: Sluggish Growth, Rising Pressure

The province is entering a challenging fiscal environment:

• Projected GDP growth: 0.8% in 2025 and 1% in 2026

• Inflation: 2.3% in 2025, easing slightly to 2% in 2026

• Unemployment: Expected to rise to 7.6% in 2025

• Deficit: $14.6 billion in 2025–26, narrowing to $7.8 billion by 2026–27

Despite these headwinds, Ontario is doubling down on strategic investments.

Key Funding Programs and Incentives

Tax Incentives for Industry and Recovery

• Ontario Made Manufacturing Investment Tax Credit increased from 10% to 15% for CCPCs, with temporary expansion to public corporations — expected to save businesses $1.3 billion over three years.

• Ontario Shortline Railway Investment Tax Credit: New 50% refundable credit for eligible rail infrastructure ($23M).

• Tax Deferral Program: Six-month deferral of provincially administered taxes (April–October 2025).

• $4B in WSIB rebates and premium reductions to ease operational costs for employers.

Grants & Loan Programs to Drive Innovation and Resilience

Industry and Innovation

• $500M Critical Minerals Processing Fund to boost domestic capacity.

• $200M Ontario Shipbuilding Grant Program for growth and NATO support.

• $30M Hydrogen Innovation Fund for clean tech pilots.

• $85M to extend O-AMP and OVIN to modernize auto manufacturing and accelerate vehicle innovation.

• $90M through Venture Ontario to boost AI, cybersecurity, and defence tech startups.

Workforce and Research

• $2.5B Skills Development Fund (additional $1B over three years) to expand training centres and programs.

• $207M Ontario Research Fund for infrastructure in colleges, universities, and research hospitals.

Trade and Business Support

• $5B Protecting Ontario Account to provide $9B in business cash flow support.

• $50M Ontario Trade Together Fund to help businesses compete across provinces and globally.

• $40M Trade-Impacted Communities Program to diversify supply chains and support affected industries.

Agri-Food and Wine

• $175M Ontario Grape Support Program for grape growers and wineries.

• $240M VQA Wine Support Program extended with $84M in annual backing.

Capital Investments and Municipal Infrastructure

• $200B Capital Plan over 10 years for roads, transit, health, and education infrastructure.

• $400M for the Municipal Housing Infrastructure Program and Housing-Enabling Water Systems Fund to address the growing demand in municipalities.

Support for Indigenous Economic Development

• $3B in Indigenous Opportunities Financing (tripled from current levels) and expanded eligibility to pipelines, critical minerals, and more.

• $70M Indigenous Participation Fund to support engagement in high-mineral-activity areas.

What This Means for Ontario Businesses and Communities

The Ontario Budget 2025 reflects a clear strategy: buffer the economic shock while planting the seeds for long-term competitiveness and sustainability. Sectors like manufacturing, clean energy, life sciences, AI, and advanced auto tech are receiving targeted support. The expansion of trade-related support and Indigenous financing also reflects a broader approach to economic development.

Businesses, nonprofits, municipalities, and research institutions should begin identifying relevant funding streams and prepare strong applications now, particularly for competitive programs like the Skills Development Fund, Venture Ontario, and the Trade-Impacted Communities initiative.

Need help navigating Ontario's 2025 funding landscape?
Our team at GrantMatch can help you identify the right opportunities, prepare compelling applications, and unlock the support you need to grow.

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