Ontario's 2026 Provincial Budget Delays The Path to Balance, Says RBC

11:18 AM EDT, 03/30/2026 (MT Newswires) -- In RBC's economic outlook, Ontario's real gross domestic product growth is at the bottom of the Canadian provincial table this year, given its acute exposure to both the United States trade and population growth shocks.

While the population shock is temporary and manufacturing shows signs of stabilization under current tariffs, ongoing trade recalibrations leave its economy more vulnerable than many others, noted the bank.

As a consequence, there is particular urgency to advance the themes important for all provinces; address health/affordability pressures while making fiscal room to support growth-oriented spending, tap into federal spending priorities, and leverage non-budgetary policy for growth, stated RBC.

Improved financial metrics in recent years have freed up more fiscal space in Canada's largest province, which Budget 2026 puts to some use. But with a relatively high debt load and abundant pressures, Ontario will need to plan carefully, added the bank.

Last week's provincial budget 2026 expects a marginally lower deficit for the 2025-26 year that is about to end, versus the fall update and prior budget -- $12.3 billion, or 1.0% of gross domestic product.

However, deficits for the next two years have been marked up to $13.8 billion in 2026-27, or 1.1% of GDP, and $6.1 billion in 2027-28, or 0.5% of GDP, while the path to balance has been delayed by a year to 2028-29.

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