On November 6, 2025, Ontario’s Minister of Finance, Peter Bethlenfalvy, released the 2025 Fall Economic Outlook and Fiscal Review. Titled “A Plan to Protect Ontario,” this fall’s economic statement outlines the government’s response to ongoing economic uncertainty―much of it stemming from ongoing U.S. tariffs and other trade disruptions―and reaffirms the province’s commitment to fiscal responsibility while supporting affordability, competitiveness, and economic resilience.
Ontario is projecting a deficit of $13.5 billion for 2025–26, improving on the $14.6 billion forecast in its last budget. The province expects to return to surplus by 2027–28, with a projected $0.2 billion surplus.
The economic statement also highlights several significant tax measures―most of which were previously announced―as summarized below.
Ontario Made Manufacturing Investment Tax Credit Enhancements
As included in its 2025 budget, the province is proposing to temporarily increase the Ontario Made Manufacturing Investment Tax Credit rate from 10 to 15% for qualifying corporations making eligible capital investments in Ontario on or after May 15, 2025, and before January 1, 2030. This enhanced refundable credit will apply to qualifying expenditures on buildings, machinery, and equipment used in manufacturing or processing, up to a limit of $20 million in a taxation year.
A new, non-refundable 15% version of the credit will also be introduced for corporations that are not Canadian-controlled private corporations (CCPCs), temporarily expanding access to this incentive.
In addition, to provide manufacturers with greater flexibility, the government is proposing amendments to allow otherwise eligible machinery and equipment expenditures to qualify for the tax credit if incurred in the taxation year immediately preceding the taxation year in which the asset becomes available for use. Currently, eligible machinery and equipment expenditures must be incurred and become available for use in the same taxation year. This change would be retroactive, applying to expenditures incurred on or after March 23, 2023.
Harmonized Sales Tax (HST) Rebate for First-Time Home Buyers
As previously announced, Ontario will fully rebate the 8% provincial portion of the HST for first-time buyers of qualifying new homes valued at up to $1 million. Eligibility criteria will be in line with the federal proposal for a GST/HST First-Time Home Buyers Rebate, with the requirement that the home be acquired for use as a primary place of residence and reduced rebate amounts available for qualifying homes valued between $1 million and $1.5 million.
This measure, which is subject to the passage of federal legislative amendments, is expected to take effect for agreements of purchase and sale entered into on or after May 27, 2025, and before 2031, provided that construction starts before 2031, and the home is substantially completed by the end of 2035.
Permanent Gasoline and Fuel Tax Reductions
In its economic statement, the government reiterated that the reductions in the gasoline and fuel tax rates to nine cents per litre have been made permanent, effective July 1, 2025.
New Non-Resident Speculation Tax Rebate
The province intends to introduce a rebate under its Non-Resident Speculation Tax system to provide relief for the purchase of residential property that has been repurposed for industrial use, subject to certain conditions. The new rebate would be available for conveyances of property occurring on or after November 6, 2025.
Property Tax Update
The economic statement was relatively quiet on property taxation in Ontario, and a long-overdue general property reassessment was not announced. However, the government confirmed that it has received feedback on approaches to make its property assessment and taxation system more effective from a wide range of stakeholders and highlighted the following measures that have been implemented due to its ongoing review:
- Granting municipalities the authority to reduce municipal tax rates on affordable rental housing starting in 2026;
- Ensuring consistent property tax treatment for student housing operated by universities;
- Allowing municipalities access to Municipal Property Assessment Corporation (MPAC) data; and
- Enabling MPAC to digitally deliver property assessment notices.
Tax Action Plan
Ontario is developing a comprehensive “Tax Action Plan” to modernize the province’s tax system, with the focus on:
- Enhancing personal and corporate income tax competitiveness;
- Encouraging business investment; and
- Providing long-term relief for individuals and families.
Further details on the Tax Action Plan are expected to be announced in next year’s provincial budget.
If you have any questions about how these proposed changes might impact your organization, please do not hesitate to contact Ryan TaxDirect® at 1.800.667.1600 or taxdirect@ryan.com.
- Sujet
- Taxes foncières
- Ontario