Host (The Rundown): Today was a big day at Queen's Park as Finance Minister, Peter Bethlenfalvy, delivered Ontario's 2026 budget. It's a big document with some even bigger numbers, billions in spending, all at a time when the economic outlook is uncertain. We're going to look at what the budget tells us about the province's finances, about the government's priorities and what it could all mean for you. Welcome to The Rundown.

John Michael McGrath: So the biggest number coming out of this year's budget has to be the deficit. The government had been projecting a smaller deficit this year than they've ended up with. We are now looking at a $13.8 billion deficit for this year. That is not just larger than they were projecting — they were projecting like a $7 billion deficit — but it's also larger than last year's. They are now projecting a $6.1 billion deficit for next year. We might be balanced by the following year. That would be the 2028-29 fiscal year. If the government accomplishes that, it might sound kind of churlish, but it would be the first time that the PCs have presented a balanced budget since they won in 2018.

John Michael McGrath: Interest on debt is one of the big drivers of the deficit. The government says that they've accumulated a lot of deficits — some of that was COVID related, some of that has been the result of tax cuts and other spending priorities. But overwhelmingly, the biggest driver of new spending has been health care. We've got an aging population in Ontario. The spending on health care just in the last two years has increased by $10 billion. This year will be over $100 billion just in health care spending alone.

Host: Budgets are financial documents and they're obviously political ones too. How healthy are our finances as we head into a period of even greater economic uncertainty? What does this budget tell us about the government's priorities? ... The government is embracing deficits for another year. It's $2.3 billion higher for '25-26 increases to... Kicking a balanced budget down the line a little bit further. They're trying to keep up with inflation pressure and population growth on some files. They're going for a prudent middle ground.

John Michael McGrath: It's the Protect Ontario Account Investment Fund. Previously, the government had announced the Protect Ontario Fund, a $5 billion fund to assist businesses and employers in response to Trump's tariffs. Only $1 billion of that $5 billion got used. So they're now announcing this investment fund that will use the remaining $4 billion as seed capital. They want to try and encourage private capital to come in. They're going to look around for more future-facing investment opportunities. They want to work on supply chain resilience. You could probably think of like AI and other more sort of advanced industries. That $4 billion will be the seed capital with which they will do that.

Host: One of the big announcements yesterday was the expanded HST rebate for new home construction. They're hoping to resuscitate the province's housing numbers. The government's estimate is that this HST rebate, expanded from last year's measure, they expect that to lead to the construction of 8,000 new homes between now and 2031. ... The estimates for new housing starts for this year in this budget were revised downwards by 10,000 units, and a further 20,000 units were lost in downward revisions for next year and the year after that.

Ricardo Tranjan: I'm not thinking of a least effective way to improve housing security. Because we're spending $1.4 billion to provide a tax rebate to folks buying newly built homes. And it can be anyone — it can be your first house, it can be your second house, it can be your 10th house. If we were to focus on social housing and tenancy regulation, we could do a lot with those two areas. With $1.4 million we could build a significant number of social housing units. With $0 we could tighten rent controls and improve affordability for a third of Ontarians. We're providing a tax base that likely will fail on its own alleged goal, which is to improve supply. The previous measure didn't achieve that goal, and we're not sure it even achieved its stated goal. It's an awful policy in housing. This is not housing policy. This is simply corporate welfare.

Rosalie W: I think it's intended to stimulate new builds more than it is really around housing affordability. So if it's going to be effective around the total supply of housing, then that will take some years to show up. But also those that are currently going to planning to buy a new house — it will make it more affordable for them. Whether they needed that affordability break or not, it does make it cheaper. Some developer groups are much more positive about this outlook. They welcome these changes. They say it could help the housing sector turn the corner. They may know better than me. I'm kind of pessimistic on it so far.

Host: Ontario plans to cut the tax rate for small business to 2.2% from 3.2% on par with... If we look at other provinces across the country, how significant is that to a small business? Will it help them hire new staff, expand?

Ricardo Tranjan: One of the main things you see across all small businesses and the surveys across provinces is that they're continually cash poor, as in they're strapped for additional resources. So giving them some tax relief, particularly when their costs are increasing in ways that they can't manage the same way that big businesses do — I think relief for small businesses, what they will spend that on will be investing in their businesses and keeping themselves afloat. Hopefully they'll be able to grow and expand and hire new people, but it will help if they're facing tough times to make sure that they don't have to reduce their business or reduce their staff.

Host: The government says there will be $64 billion over the next ten years for health care infrastructure. That includes about 50 hospitals to increase their beds. The Financial Accountability Office of Ontario has warned about health care staffing levels at the current funding model. What could the government have done to address that?

Rosalie W: It matters more what kind of beds they are, because there is the risk that we have high volumes of alternate level of care patients. Those are patients that could be better cared for in long-term care in the community, but they're in hospital beds. Depending on the hospital, those rates could be 10% up to 40% of the beds are currently occupied by those types of patients. ... If we could increase home care services, we could likely delay people requiring LTC. Investing in home care is absolutely a good place to do it and that we still have an aging population. So I would agree that going back down is actually more of a concern. But the investment this year is welcome.

Ricardo Tranjan: My main concern here is that when you adjust the current figures for inflation, for population growth and for aging, which is really important in health, we have only a 0.5% increase in the real allocation this year, and that drops next year. Next year, we have a 1.6% cut in real health spending as forecast right now. So we're not investing nearly enough. The second piece of this, it also matters where this funding is going. We are starting to pay more and more for or subsidize in different ways for profit care. That's a slippery slope. We know that funding private care won't buy us as much health in return.

Host: In education, the only thing driving investment up is the childcare program — a federal initiative. We haven't seen the same level of investment at K to 12 schools or in post-secondary training. Post-secondary education is becoming more expensive, and a lot of the professionals who could be the potential professionals, the workers who could be looking at training — the right investment here would have been post-secondary education, college training of all sorts.

Ricardo Tranjan: This government has recently made some very draconian changes to OSAP. We also have seen that this government has not come through for post-secondary institutions, including colleges, since the cap on international students. So overall, we have a system where post-secondary education is becoming more expensive, be it university, be it college, their class assistance for students to go through. A lot of them right now are second guessing. Should I invest? Can I afford how much debt will I have to take in order to become a nurse or to become a health professional? The right investment here would have been on post-secondary education.

Host: There are over 400 municipalities in this province. They've had their eyes on this budget as well. What did municipalities get in this budget this year? ... On my quick scan, there wasn't anything in particular that jumped out at me, but I think given, shall we say, local Toronto issues, intergovernmental issues around how Toronto and the province are interacting over various things, I think it might not be a spending item, but there will probably be more on that file to come.

Host: You've got two articles on the website, Steve Scott, another article you will break down the budget all on OnPolitics tomorrow. And we'll have the Finance Minister Peter Bethlenfalvy on the podcast tomorrow. ... Before we go, we here at "The Rundown" wanted to take a moment to send our thanks and best wishes to someone who's been a huge part of our team. John Ferri. He's retiring this week as Vice President of Programming and Content after ten years with TVO. We'll miss you, John. We wish you all the best in this new chapter.