Ontario Fall Economic Statement 2026

The 2026 Ontario Economic Outlook and Fiscal Review: A Plan to Protect Ontario doesn’t introduce major changes to personal and business tax measures. However, it confirms Ontario’s plans to align with federal changes to the scientific research and experimental development (SR&ED) program and recent proposals for immediate write-offs and accelerated deductions for eligible depreciable property. The province will also proceed with changes to the provincial portion of the HST rebates available on new homes, previously announced in their 2026 budget. In addition, Ontario is also introducing changes to its beneficial ownership registry, which will increase reporting requirements for privately held corporations. 

The ON FES 2026 estimates a $16.9 billion deficit for the 2026-27 fiscal year, a significant increase from the $13.8 billion deficit projected in the 2026 budget, citing the ongoing trade and geopolitical uncertainties. 

Estimated surplus (deficits)

The government expects to return to a balanced budget in the 2029–30 fiscal year. 

Business tax measures  

Ontario competitiveness tax cut 

The Statement parallels the proposed federal Productivity Mega Deduction to provide 100% immediate write-off for the cost of most depreciable property purchased on or after September 15, 2026, subject to certain exceptions. These exceptions include a building, an improvement to a building, most intangible assets, most vehicles (used vehicles or any vehicles assembled outside of Canada), natural gas pipelines and related equipment, qualified liquefaction equipment, timber limits and timber rights, and mineral mines and mineral rights.  

In addition, the government also confirms their plan to harmonize the proposed federal immediate expensing for M&P buildings, temporary immediate expensing for eligible zero-emission vehicles, and additional allowances for liquefaction equipment used in liquefied natural gas facilities. 

This measure will have the same effective date as the federal measures once the federal legislation is enacted. 
 

Broadening availability to research and development tax credits 

ON FES 2026 restores eligibility for certain capital expenditures under the Ontario research and development tax credit and Ontario innovation tax credit. This measure allows eligible businesses to claim qualifying capital expenditures, such as software and hardware testing tools, high-performance computing, prototyping equipment, and certain property and lease costs, consistent with recent changes to the federal SR&ED program. This will apply to eligible property acquired on or after December 16, 2024. 

Sales tax and excise measures 

Temporarily enhance HST relief for new homes  

Ontario will provide the following temporary harmonized sales tax (HST) relief measures, up to $130,000 for eligible buyers of new or substantially renovated homes, which were previously announced: 

• The Ontario enhanced new housing rebate and enhanced new residential rental property rebate for eligible new homes purchased from a builder between April 1, 2026 and March 31, 2027. These measures, combined with the existing new housing rebate and new residential rental property rebate, provide up to $80,000 on the 8% HST. See our Ontario Budget 2026 summary for more details on eligibility. Applications for these measures can be made through the CRA. 
• The Ontario new home affordability payment—providing top-up relief of up to $50,000, equivalent to up to 100% of the 5% federal portion of the HST—will be made available to all recipients of the enhanced new housing rebate and enhanced new residential rental property rebate, with no separate application required. The new home affordability payment is reduced by any federal rebate available, including the federal HST first-time home buyers’ rebate. The new home affordability payments are expected to begin in early 2027.

Elimination of new housing rebate and new residential rental property rebate

Ontario will eliminate the new housing rebate and new residential property rebates on new purchases and transactions that begin on or after April 1, 2027, which will phase out at the same period as the enhanced versions of the rebates.

The new housing rebate and the new residential rental property rebate will continue to apply if the relevant agreement of purchase and sale is entered into on or before March 31, 2027, or the construction or substantial renovation of the property begins on or before March 31, 2027. In addition, the HST on the new property must become payable no later than December 31, 2035.

For assignment sales, the new housing rebate and new residential rental property rebate will only be available if both the original agreement of purchase and sale and the assignment agreement were entered into on or before March 31, 2027, and all other eligibility criteria of these rebates are met. 

Other notable measures  

Ontario proposes amendments to existing programs and tax measures, including:

• Ontario’s beneficial ownership registry – Ontario proposes to require corporations to collect and submit identifying information about individuals with significant control, such as citizenship and an address for service, under the Business Corporations Act and the Corporations Information Act. Ontario also proposes to expand reporting exemptions to certain wholly-owned subsidiaries whose parent entities are already subject to transparency and reporting requirements. Limited access to information will be available to the public, with full access granted to authorized entities such as law enforcement and regulatory bodies. The registry for privately held corporations is expected to be implemented in 2027.
• Centralized online property assessment roll - Ontario plans to introduce a centralized electronic platform for public access to certain property assessment information, enabled by the Municipal Property Assessment Corporation (MPAC). The new electronic platform is expected to become available in mid-2027.  
• Canada-Ontario Action Plan - Ontario plans to invest $8.7 billion into the province’s automobile, steel, and critical minerals sectors. This is intended to protect workers and businesses affected by U.S. tariffs, support the modernization of key industries, and expand opportunities in critical mineral development.
• Gasoline tax and fuel tax rates - Ontario plans to permanently reduce the gasoline tax and fuel tax rates to 9 cents per litre (a reduction of 5.7 cents per litre and 5.3 cents per litre, respectively). The tax cuts were first introduced on a temporary basis on July 1, 2022.
• Ontario computer animation and special effects (OCASE) tax credit - Ontario plans to limit the eligibility of the OCASE tax credit to film and television producers only. Currently, the OCASE tax credit is an 18% refundable corporate income tax credit.  

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Visit our Budget 2026 hub to learn more about all federal and provincial budgets.

Disclaimer

_{The information contained herein is general in nature and is based on proposals that are subject to change. It is not, and should not be construed as, accounting, legal, or tax advice or an opinion provided by Doane Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, specific circumstances or needs and may require consideration of other factors not described herein.}