Ontario's 2025-26 Deficit Lands at $13 Billion, Beating Budget Projection but Marking a Sharp Year-Over-Year Swing

What happened

Ontario closed fiscal 2025-26 with a $13-billion deficit, according to the province's public accounts report released Thursday, Sept. 24, 2026. The result came in below the $14.6 billion projected in the 2025 budget, a beat of $1.6 billion against the government's own forecast. Canadian Press reporter Liam Casey filed the account from Toronto, and the figures were carried by The Globe and Mail.

The better-than-projected headline sits against a starker comparison: the province ran only a $1.1-billion deficit in 2024-25, meaning the 2025-26 shortfall represents a year-over-year deterioration of roughly $11.9 billion even as it beat projections. Per the Globe and Mail's report of the public accounts, the Ford government has said the shortfall was largely driven by a $10-billion increase in program expenses in health and education. Health-care spending rose by $6.2 billion to $97.5 billion in total for 2025-26, while education spending increased by $2.3 billion to $40.1 billion.

On the revenue side, the province attributes part of the better-than-projected result to greater-than-projected revenue from government business enterprises, such as the Liquor Control Board of Ontario and the Ontario Lottery and Gaming Corp. The public accounts were released as the province's fiscal watchdog warns of spending gaps, a framing that appeared in the Sudbury Star's headline on the same report as relayed in the ground.news story summary. Provincial finance coverage carried in the same cycle includes related fiscal context from across the country: the federal government posted a $370-million deficit between April and June, British Columbia added $450 million to a record deficit after a math error and an expensive wildfire season, and Nova Scotia's government spent nearly $2 billion outside of budget.

The $13-billion figure for 2025-26 is the audited actual from the public accounts rather than a mid-year estimate, and the $14.6-billion projection it beat was the figure set out in the 2025 budget. Provincial outlet The Trillium headlined the release as the government revealing a $13-billion spending deficit for 2025-26; that page returned an HTTP 403 error at the time of review and could not be read directly, so its framing is noted here as a headline only, with the underlying figures attributed to the Globe and Mail's report of the public accounts and to the ground.news story summary.

Why it matters

The $13-billion result is a two-sided number. Against the 2025 budget projection of $14.6 billion, the province outperformed its own plan by $1.6 billion, which the government ties in part to stronger revenue from government business enterprises such as the LCBO and the Ontario Lottery and Gaming Corp. Against the prior year, the picture reverses: a $1.1-billion deficit in 2024-25 became a $13-billion deficit in 2025-26, a swing of roughly $11.9 billion in a single fiscal year.

The composition of the deterioration matters as much as its size. The Ford government attributes the shortfall largely to a $10-billion increase in program expenses concentrated in health and education, the two largest files in the provincial budget. Health-care spending rose $6.2 billion to $97.5 billion, and education spending rose $2.3 billion to $40.1 billion, together accounting for the bulk of the program expense growth the government cites. That means the beat against projection came alongside a substantial expansion of spending rather than a narrowing of the province's underlying fiscal position.

The timing of the release adds a political dimension. Per the Sudbury Star's headline on the report, as relayed in the ground.news summary, the public accounts were published as the province's fiscal watchdog warns of spending gaps, placing the audited deficit figures in the same news cycle as independent warnings about the province's fiscal trajectory. The public accounts are the definitive record of the fiscal year, and the $13-billion figure will serve as the baseline against which future budgets and forecasts are measured. The broader Canadian fiscal backdrop in the same coverage, including the federal government's $370-million deficit for April to June, British Columbia's $450-million addition to a record deficit, and Nova Scotia's nearly $2 billion in spending outside of budget, situates Ontario's result within a wider pattern of shortfalls.

How it is being covered

According to ground.news, the story is carried by 20 sources with a left/centre/right split of 68/27/5 per cent, and factuality ratings are strong at 19 of 19 rated outlets, 10 high and 9 very high. The coverage shows a clear blindspot on the right, with only 5 per cent of rated coverage coming from right-leaning outlets, meaning the Sudbury Star's framing of the release alongside the fiscal watchdog's spending-gap warnings is the kind of angle underrepresented in the overall mix.

What to watch

Watch how the $13-billion audited deficit is reconciled with the fiscal watchdog's warnings about spending gaps in upcoming commentary and legislative committee appearances. Watch for any restatement or refinement of the health and education expense figures, since the $10-billion program expense increase is the government's stated driver of the shortfall. Watch the revenue side as well: the contribution from government business enterprises such as the LCBO and the Ontario Lottery and Gaming Corp. was cited as a reason for the beat against projection, and the durability of that revenue line will shape whether future projections hold. Watch the 2026 budget cycle for the baseline the province sets against this $13-billion result, and watch whether the year-over-year swing from $1.1 billion to $13 billion draws further scrutiny given the watchdog's spending-gap warnings.

By the numbers

Source snapshot