Ontario announces $8 billion tax cut and industrial plan to counter tariffs

What was announced

Ontario's Finance Minister Peter Bethlenfalvy released the 2026 Fall Economic and Fiscal Review on October 29, outlining measures to address U.S. tariffs, global economic uncertainty and competitive pressures. The economic statement includes an $8 billion competitiveness tax cut, an $8.7 billion joint Canada-Ontario industrial action plan, and continued infrastructure investments under the province's $210 billion capital plan.

The $8 billion competitiveness tax cut

The Ontario Competitiveness Tax Cut is designed to encourage businesses to invest in equipment, technology and productive assets. The measure provides $8 billion in provincial tax relief through immediate write-offs covering 100 per cent of the value of a broad range of eligible business assets.

The government estimates the initiative could attract at least $11 billion in additional capital investment, create 30,000 jobs and contribute $6 billion to Ontario's gross domestic product. When combined with accelerated write-off measures announced in the 2026 Budget, provincial tax relief supporting business investment would exceed $12 billion over five years.

Industrial strategy and sector support

Ontario is advancing an $8.7 billion joint action plan with the federal government to strengthen the automotive, steel and critical minerals sectors. The initiative focuses on protecting tariff-affected businesses, modernizing industrial operations and developing domestic supply chains.

Priority industries include advanced manufacturing, electric vehicles, defence, energy and critical minerals processing. The province has announced nearly $30 billion in tariff-related relief and business support measures since April 2025, including a temporary provincial tax deferral that made up to $9 billion in liquidity relief available to approximately 80,000 businesses.

Regulatory reform and sector-specific programs

Ontario is reviewing 375 business-facing permits, targeting the elimination, simplification or transformation of 35 to 50 per cent by the end of 2028. Regulatory reforms are eliminating nearly 220,000 days of cumulative permit processing time.

The province plans to restore capital expenditures as eligible costs under two provincial research and development tax credits, expected to provide more than $50 million in additional tax support over three years to approximately 700 businesses. Ontario is also supporting forestry through more than $90 million in competitiveness and innovation investments and over $86 million for forest biomass projects.

Next steps for businesses

The government will begin consultations in November to help shape its 2027 Budget. Businesses seeking information about the Ontario Competitiveness Tax Cut, the Canada-Ontario industrial action plan, or existing programs such as the Ontario Together Trade Fund and Protect Ontario Financing Program should check the official Ontario government website or contact the Ministry of Finance for eligibility details and application timelines, which have not been announced in this statement.