Ontario budget 2025: Tariff relief, alcohol provisions and more red ink

The Ford government tabled its 2025 budget called “A Plan to Protect Ontario,” aimed at softening the blow from U.S. tariffs. It’s a financial blueprint big on spending, alcohol provisions and red ink.

The deficit is growing by $8.6 billion, up from $6 billion last year to $14.6 billion this year, though the government lays out a path to balance the budget by 2027-28.

There is $5 billion for Ontario businesses struggling with the tariffs, $20 billion to help laid-off workers, and money for two new police helicopters.

There are measures to make beer, cider and ready-to-drink cocktails cheaper at the LCBO, and figures that show LCBO and alcohol tax revenue tumbling. The budget also sets out changes in the way cannabis stores operate.

There are no income tax cuts or hikes.

TARIFF HELP

The government is earmarking $5 billion for what it calls the “Protecting Ontario Account” a fund designed to provide businesses with “support to protect jobs, transform businesses and grow strategic sectors of the economy that are facing significant tariff-related business disruptions.”  The government says the fund will provide immediate liquidity relief as an emergency backstop for Ontario businesses that have exhausted available funding, but provides no details on how exactly it will work.

Twenty million dollars is being set aside for “action centres” for workers who may lose their jobs due to the trade threat. “The centres provide temporary places for affected workers to receive services, including referrals to in-demand training, job search assistance, upskilling and Employment Ontario programs.

ALCOHOL

The beer, cider, and premixed cocktails you buy at the LCBO could be a lot cheaper as of August 1, with the government cutting the markup rates the LCBO charges for those products. So long as manufacturers don’t increase their prices, the cost of beer, cider and ready-to-drink beverages could drop between 21 per cent to 50 per cent. For example, the government is slashing the markup on Ontario craft beer by 50 per cent

It’s a move that is going to further impact already falling revenues. LCBO revenues are down sharply since the Ford government started allowing the sale of alcohol in convenience stores. Total revenue at the LCBO fell by more than $300 million, from $2.16 billion in 2024-25 to $1.85 billion in 2025-26

But even beer, wine and spirit tax revenue fell despite alcohol being much more readily available. It dropped by $174 million, from $562 million in 2024-25 to $388 million in 2025-26

The government explains the drop in revenue by pointing to the impact of taking U.S. products off the shelves, and the overall decline in consumption as Ontarians are drinking less than they used to.

ONTARIO WINE

The government is introducing what it calls “The Ontario Grape Support Program,” which it says, “Will help grape farmers and wineries by increasing the number of Ontario grapes in wine bottles. The program will provide up to $35 million in annual support to eligible wineries.”

CANNABIS

The government will allow cannabis stores to take down coverings on their windows. It says the intent is to “Support legitimate local businesses by enhancing transparency and fostering a more welcoming environment for consumers, while still protecting youth from exposure to cannabis.” While the window coverings can come down, the cannabis itself must remain out of view from the street.

The government is also creating a new “Ontario Grown Cannabis” badge that will indicate which products are produced in Canada

GAMBLERS GAMBLING

Revenue from iGaming continues to grow, up $22 million year over year. OLG revenues were steady at $2.4 billion.

HEALTH

Health spending is up 4 per cent year on year. There are $103 million in new planning grants and support for over 50 major hospital projects that the government says will deliver approximately 3,000 new hospital beds.

HELICOPTERS

A total of $57 million is being set aside for two new H-135 helicopters to support the Niagara Regional Police Service and the Windsor Police Service “with increased patrols, security and enforcement at key entry points at the U.S. border.”

INFRASTRUCTURE

The budget lays out a 10-year capital plan that includes nearly $30 billion to support the planning and construction of highway expansion and rehabilitation projects, approximately $61 billion for public transit, approximately $56 billion in health infrastructure, and investments of over $30 billion “to build more schools and child care spaces.”

CRITICAL MINERALS

The government is investing $500 million to create the new Critical Minerals Processing Fund, which “will help unleash the potential of the province’s mineral sector by attracting investments in critical mineral processing capacity here at home.”