Minister of Finance Peter Bethlenfalvy presented Ontario’s budget for 2025 at Queen’s Park on Thursday afternoon, predictably putting a strong emphasis on ongoing trade tensions with the US in his remarks. With tariffs turning the economy on its head and unemployment on the uptrend, this year’s $232.5-billion budget accounts for a $14.6-billion deficit over the 2025-2026 fiscal year. A “path to balance” isn’t anticipated until the 2027-2028 fiscal year.
The release of the 2025 budget also comes as the Province faces grim realities on the homebuilding front, with housing starts projected to slow to 71,800 this year and 74,800 in 2026. With Ontario’s goal of 1.5 million new homes by 2031 looming, those projections don’t bode well, so, fittingly, this year’s budget includes billions earmarked for initiatives to bolster and support new housing development.
For instance, $2 billion over four years has been set aside for the Housing-Enabling Water Systems Fund (HEWSF) and the Municipal Housing Infrastructure Program (MHIP). That breaks down to $1.3 billion through the HEWSF to expand drinking water, wastewater, and stormwater infrastructure to enable approximately 600,000 new homes; $400 million through the MHIP − Housing-Enabling Core Servicing Stream to enable 58 projects and 160,000 new homes; and $175 million through the MHIP − Health and Safety Water Stream to ensure communities have access to safe drinking water, reliable wastewater services, and are protected during extreme weather events.
The Province is also investing an additional $400 million towards the MHIP and HEWSF in the near-term, in response to “strong interest from municipalities.” Meanwhile, up to $35 million will go to the Regional Municipality of Peel to expand the G.E. Booth Water Resource Recovery Facility as part of the HEWSF’s first intake. The investment is anticipated to unlock up to 46,784 new housing units in the Region of Peel.
Also on the infrastructure front is a $5-billion top-up to the Building Ontario Fund, with a portion of those funds set to go towards affordable housing infrastructure to be developed in partnership with institutional investors.
In line with federal intentions to up the ante on prefab housing construction, the budget commits $50 million to prop up industrial capacity in modular construction. The funds are set to be delivered over five years through Invest Ontario, which will put the funds towards the expansion and improvement of existing production-line machinery and development of new and innovative technologies that accelerate output.
As announced earlier this year, the 2025 budget reiterates a $975-million investment in Waterfront Toronto’s revitalization plan, which is a tri-government initiative that is expected to bring over 14,000 new homes, including affordable rental homes, Quayside and Ookwemin Minising — formerly known as Villiers Island. Beyond including a sizeable housing component, the project is anticipated to create around 100,000 skilled trades jobs on Toronto’s waterfront, while contributing $13.2 billion to the economy.