Ontario Budget 2024 Preview: Will Provincial Budget Season Trends Be Ontario’s Friends?

Ontario’s 2024 budget will be released on March 26, and uncertainty abounds. The full effects of interest rate hikes haven’t yet been felt and there are questions about how public sector wage increases could impact the bottom line. At the same time, the tax base has once again been adjusted higher. All of this comes after Canada’s largest province delayed its plans to balance the books just five months ago in its Fall Economic Statement (FES).

Using four possible scenarios for Ontario’s public finances, we find that putting government ledgers back in the black may take some more time. But that’s only true if a number of things—such as a persistent shock to spending, further downward revenue revisions and even a recession—go wrong. Similarly, the province’s net debt burden appears unlikely to exceed pre‑pandemic highs.

Still, Ontario will need to juggle multiple competing objectives this budget season. These include presenting a credible plan to address the new spending pressures created by population growth and aging. The province will also have to manage high debt levels amid potentially higher-for-longer interest rates.

Meeting these challenges could require difficult trade‑offs, and Budget 2024 should tell us something about how the government plans to manage these trade‑offs over time.