On May 15, the Ontario government released their program and spending plans for 2025-26. We are pleased that the government included our Business Barometer® data in the budget on page 138, a further confirmation of CFIB being a trusted industry expert.
Here’s what your business needs to know about the latest Ontario budget.
More WSIB Surplus Funds on the Way in 2025!
The Ontario government will distribute another $2B in Workplace Safety and Insurance Board (WSIB) surplus funds to eligible Ontario businesses (i.e., in addition to the $2B already rebated in February and March of this year).
More information on the second 2025 surplus funds rebate, including eligibility criteria, will be available shortly.
No other organization fought for these rebates totaling $5.2B since April 2022!
Permanent Provincial Gas and Fuel Tax Cuts
The Ontario government is introducing legislation that, once passed, will make the province’s gas and fuel tax cuts permanent. The temporary 5.7-cent and 5.3-cent per litre reductions to provincial gasoline and fuel taxes have been in place since July 1, 2022. Since then, CFIB has urged the Ontario government to make them permanent, based on our survey data. An overwhelming 88% of our members support this meaningful relief measure that will help address the ever-rising costs of doing business and provide predictability now and in the future.
Provincial Tax Deferrals
The Ontario government is deferring the following 10 provincially-administered taxes for six months (April 1-October 1, 2025):
- Employer Health Tax (EHT)
- Insurance Premium Tax
- Gasoline Tax
- Fuel Tax
- Mining Tax
- Tobacco Tax
- International Fuel Tax Agreement
- Beer/Wine/Spirits Tax
- Retail Sales Tax on Insurance Contracts and Benefit Plans
- Race Tracks Tax
While no application is required to benefit from any of these deferrals, businesses must continue to file returns on time. Normal interest/penalties would start to accrue when the deferral period ends.
Improving the Ontario Made Manufacturing Investment Tax Credit
The province is planning to expand the Ontario Made Manufacturing Investment Tax Credit with an additional $1.3 billion over three years to help lower costs for businesses that invest in buildings, machinery and equipment used for manufacturing or processing in Ontario.
Under the proposed changes, the rate of this tax credit for Canadian-controlled private corporations would increase from 10%-15%, and eligibility would be expanded to non-Canadian-controlled private corporations as a non-refundable tax credit.
Once these changes are passed through legislation, a qualifying corporation could receive a tax credit of up to $3 million per year.
New Ontario Together Trade Fund
The Ontario government is investing $50 million over three years starting in 2025–26 to create the Ontario Together Trade Fund to help U.S. trade-exposed businesses serve more interprovincial customers, develop new markets, and re-shore critical supply chains in the face of U.S. tariffs. Funding will be provided through a grant or loan up to a maximum of $5 million.
Ontario businesses are required to meet specific eligibility criteria. For example, they must:
- Employ at least five full-time, active workers;
- Operate in a sector extensively targeted by U.S. tariffs (e.g., auto, steel or aluminum sectors) or face significant exposure to trade risk (e.g., 30% or higher revenue loss); and
- Invest at least $200,000 in eligible project costs.
The full list of eligibility criteria and other important details are available here.
Budget Balance Update
Despite deficits of $14.6B in 2025–26 and $7.8B in 2026–27, Ontario is on a path to balance by 2027–28.
See CFIB’s response to Ontario Budget 2025/26 here!
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