2026 Ontario Fall Economic Statement — Review of Key Provisions for TECHNATION Members

November 5, 2026

Ontario’s Minister of Finance, Peter Bethlenfalvy, has tabled the 2026 Fall Economic Statement (FES), formally the 2026 Ontario Economic Outlook and Fiscal Review.

Ontario continues to face heightened economic uncertainty from U.S. trade and tariff actions, geopolitical tensions and disruptions to global supply chains. In 2026-27, the province is projecting a deficit of $16.9 billion, compared to the $13.8 billion forecast in the 2026 Budget.

Measures in the FES that may be of interest to TECHNATION members include:

• AI Industrial Strategy. The government is developing an AI Industrial Strategy. It will focus on supporting investment, accelerating AI commercialization, advancing digital sovereignty and strategic supply chains, and supporting AI adoption across businesses and key sectors. It will also focus on strengthening digital, computing and energy infrastructure, equipping workers with AI-related skills, and promoting the safe, secure and responsible use of AI.
• Vector Institute. A $30 million investment in the Vector Institute, announced in September 2026, as the first recipient of the revamped Critical Technologies Initiatives (CTI) program. The funding will help Canadian companies and organizations integrate and deploy AI.
• Ontario Competitiveness Tax Cut. More than $8 billion in Ontario tax relief over five years (2026-27 to 2030-31), paralleling the federal Productivity Mega Deduction. Businesses would be permanently allowed to immediately write off 100 per cent of the value of a wide range of assets, including software, fibre-optic cable and patents. The measures take effect following passage of federal legislation. Combined with 2026 Budget measures, total Ontario tax relief for capital investment would exceed $12 billion over five years.
• R&D tax credits. Restoring capital expenditures as eligible expenditures under the Ontario Research and Development Tax Credit and the Ontario Innovation Tax Credit, in parallel with recent federal enhancements to the SR&ED program. Eligible items include high-performance computers, tools to test software or hardware, prototyping equipment, and property or lease costs. This is estimated to provide more than $50 million over three years to about 700 businesses.
• Digital Competence Centre. An additional $5 million, announced in May 2026, to expand the Digital Competence Centre delivered with the Ontario Centre of Innovation. The program will help nearly 450 small and medium-sized businesses adopt digital tools.
• Digital credentials. The government is exploring digital credentials that would offer a secure, private and optional way to store and present identification on mobile devices. Physical credentials would remain available.
• Payment integrity and fraud prevention. An enterprise-wide approach to fraud, error and improper payments, using technology-enabled detection and prevention. The FES notes that threat actors are using AI, automation and synthetic identities to target public systems. A strategic investment could prevent $500 million to $1.25 billion in losses annually within five years.
• Provincial agency reviews. Reviews of nine agencies, including Supply Ontario, focused on efficiency and governance. The reviews include optimizing digital modernization initiatives and reducing reliance on external consultants.
• Defence. Continued consultation on the Ontario Defence Industrial Strategy framework, a 10-year strategy that includes a pillar on preparing defence and dual-use firms to capture federal and allied spending. The province also intends to issue a Security and Resilience Bond to fund defence projects.
• Border security. $32.5 million in 2026-27 to expand border enforcement, including a $30 million Border Security Grant for police equipment such as drones, surveillance systems and secure intelligence technology.
• Talent. $1.7 billion to support 70,000 additional college and university seats in high-demand fields, including STEM and AI. This includes 2,515 seats at the University of Waterloo and 1,118 seats in AI programs at Collège La Cité.
• Cutting red tape. The Building Ontario Faster Act, 2026 was introduced in October 2026 as part of the Fall 2026 Red Tape Reduction Package. The review of business-facing permits is more than 50 per cent complete, with over 190 permits to be reviewed by the end of 2026.
• Capital markets. The government will continue working with regulators and industry to improve access to capital for businesses at various stages of growth, mobilize Canadian capital for Canadian technologies, and retain Ontario-developed intellectual property.

Securing Ontario’s Digital Infrastructure 

In partnership with a private-sector technology provider, Ontario will expand access to data centre capacity, high-performance computing and AI infrastructure. Data and services will remain under Ontario’s control and subject to Canadian laws and requirements. The approach uses government purchasing power, private-sector partnerships and existing provincial infrastructure. The government states it will create opportunities for government and broader public-sector partners and support business growth across the province.

The FES also references the proposed Data Centre Playbook framework, launched in August 2026. Under the Playbook, data centres would pay the full cost of the electricity they use. Proposed measures include encouraging projects to build their own power generation and creating a separate rate class for large new data centres. The government will offer only non-financial support to attract data centre investment and will prioritize projects that meet Ontario’s environmental standards, such as closed-loop systems that reduce water use.

Buy Ontario Act Update 

The Buy Ontario Act (Public Sector Procurement), 2025 requires ministries, agencies and designated broader public-sector organizations to prioritize Ontario, and then Canadian, goods and services whenever feasible. As a first step under the Act, Ontario introduced directives requiring public-sector entities to prioritize made-in-Ontario vehicles for fleet purchases, and Ontario and Canadian goods and services in capital infrastructure procurements.

The government is considering measures to monitor compliance with procurement requirements. Consequences for non-compliance could include reconsidering provincial funding made available to the public sector, as well as other measures permitted under the legislation. The government is also exploring further ways to expand domestic procurement. This includes extending the Building Ontario Businesses Initiative (BOBI) to municipalities so Ontario businesses can compete more effectively for municipal, provincial and broader public-sector opportunities.

In addition, the government is strengthening Buy Ontario policies so that infrastructure projects are planned and designed to maximize Ontario and Canadian goods and workers, while maintaining flexibility, value for money and efficient delivery. It is also advancing bulk purchasing initiatives that list Ontario and Canadian suppliers, to increase their participation in provincial procurement.