To the Point for the Week of May 31, 2026
To the Point for the Week of May 31, 2026
We go heavy assessing the Ontario government’s Spring session performance and a light on a first for Carney as Prime Minister.
ONTARIO
Springing into the Summer Break
That’s a wrap, folks.
After a twenty-nine-day sitting, the Ontario legislature has adjourned for the summer and will return after a lengthy break on October 27th. A five-month recess could be perceived as excessive, and less than a month of sitting days suggests not a lot can get done in such a short time. This leads to a basic question: what was accomplished during the spring legislative session?
The spring sitting was productive in comparison to previous sittings under the Ford government, which had fewer sitting days, but more bills passed through the legislature using time allocation. Five government bills received royal assent before the end of the session: the Supply Act, Plan to Protect Ontario Act (Budget 2026), Putting Student Achievement First Act, and the HST Relief Implementation Act. Three additional bills were passed but will receive royal assent in the fall session, including the Keeping Criminals Behind Bars Act, Building Homes and Improving Transportation Infrastructure Act, and the Building Billy Bishop Airport Act. Three more bills advanced but will conclude their legislative journey this fall: the POWER Act, Protecting Ontario’s Food Independence Act, and Protecting Ontario’s Streets and Communities Act. Procedurally speaking, that’s quite efficient.
However, when assessing the government’s accomplishments through a purely political and economic lens, productivity begins to matter less.
We thought back to previous editions of To the Point where we analyzed and assessed various provincial regulatory, legislative, and budgetary initiatives and uncovered a common throughline in each: encouraged by the effort, optimistic about the direction, but clear that much more still needs to be done. Our political assessment of the spring legislative session remains the same and focuses on key measures passed during this session related to the economy and housing.
Budget 2026, A Plan to Protect Ontario, was the linchpin of the province’s spring session and included several measures that were well received by business and stakeholder groups but failed to address what they see as specific structural economic issues. The headline item from the budget was a small business tax cut, the single most important competitiveness measure in the budget, which will decrease the rate from 3.2% to 2.2% beginning on July 1. The cut is anticipated to deliver over $1.1 billion in relief over three years for more than 375,000 small businesses. The Protect Ontario Investment Account Fund provides up to $4 billion to attract private capital and pension funds to invest in advanced manufacturing, AI, and life sciences sectors. An over $210 billion capital envelope over 10 years goes toward building hospitals, highways, transit, trade corridors, and Ring of Fire access roads. The most hyped item in the budget was the relief on qualifying new homes by removing the full 8% provincial portion of the HST – part of the full 13% HST relief when combined with the federal government’s portion – on new homes.
The above-mentioned budget items, among others, were generally well received. The Ontario Chamber of Commerce welcomed the small business tax cut but also noted that simplification of the tax code, streamlining the regulatory environment, strengthening productivity and innovation incentives, and a broader, long-term growth strategy were noticeably missing.
TD Economics echoed the OCC’s assessment. The targeted tax measures are helpful but only amount to a small tweak to the tax code. Relief on housing is welcomed but expensive and focused on the demand side and at the margins. The capital envelope for infrastructure addresses productivity and growth on the margins but requires more borrowing to get shovels in the ground.
Budget 2026 delivers some meaningful, targeted wins on competitiveness and housing supply, but leaves Ontario with a higher-for-longer deficit profile and does not resolve the underlying structural pressures on growth, productivity, and the province’s balance sheet. The Canadian Federation of Independent Businesses welcomed the corporate income tax cut but lobbied for a lower rate at 2%. It too expected more on persistent tax and regulatory cost pressures. The message from stakeholders was clear that more action was necessary.
Housing remained the government's most-legislated file, which is considered a legislative win, but these bills now face implementation hurdles. Building Homes and Improving Transportation Infrastructure Act (Bill 98) standardized land-use designations, limits site plan delays, and caps minimum lot sizes at 175 square metres, among other measures. Bill 98 was introduced alongside the announcement of the Canada-Ontario Partnership to Build, an $8.8 billion cost-matched funding program for municipalities over ten years that requires municipalities to cut development charges by 30–50% to be eligible for funding.
Better Regional Governance Act (Bill 100) aimed to speed up housing delivery by installing provincially appointed “strong chairs” in eight fast-growing regions and shrinking Niagara and Simcoe regional councils, on the theory that smaller, more centralized bodies will move housing files more quickly. It is explicitly designed to align regional decisions with provincial housing targets by reducing what the government sees as local political bottlenecks to approving growth.
For all the ink spilled on Bills 98 and 100, the real test will be implementation, and here the story mirrors the rest of the spring: directionally right for getting more homes built but falling short of a truly structural shift. Bill 98 forces municipalities to rebuild core planning documents, business processes, and IT systems around a new land-use framework and narrowed site-plan rules. At the same time, they must manage active files under overlapping old and new regimes and wait on key regulations and technical guidance that will determine how the law operates on the ground. Bill 100, meanwhile, compresses major governance changes into the run-up to the 2026 municipal elections, requiring regions to redraw councils, rewrite procedural by-laws, and reconcile new “strong chair” powers with existing local authority – a recipe for short-term friction and delay before any promised gains in speed or alignment on housing materialize.
Comparable to the sentiments from business groups concerning the budget's impact on the economy, the home building and development industry — namely BILD and OHBA — celebrated the HST relief, were broadly supportive of the direction of planning reforms, and remained wary of implementation clarity and long-term policy predictability. More action was sought on a structural fix to development charges, rather than a temporary one. Having cycled through four major planning bills since 2022, the government has not yet alleviated the sense of uncertainty for the builders it wants to activate.
The government can be credited with an efficient and productive spring session. It passed a sizable number of pieces of legislation in a short sitting. Politically, key stakeholders found the government’s spring performance to be adequate and welcomed. However, through the lens of the structural barriers to unleashing growth, improving competitiveness and attracting investment, not to mention obstacles to reducing the cost of building and buying a home, the government’s spring session left more to be desired.
Queen’s Park’s summer recess should give the government opportunity for reflection on the past session and introspection prior to the return of the legislature in late October. That task is compounded with the challenges of a pending cabinet shuffle. With Caroline Mulroney out, and others on the government front benches soon expected to announce their intent to spend more time with family, Premier Ford now must think about the right time to shuffle cabinet, who gets demoted and promoted, and what objectives those changes are intended to achieve. It will signal whether the Premier will proceed with more tinkering or if bigger moves are afoot.
FEDERAL
A Mark Carney First
Mixed economic signals as of late have contributed to an emerging sense that the Prime Minister and cabinet are no longer firmly in control of events or narratives. This is not the same as saying the government is out of control. Being out of control would imply escalation, recklessness, and turbulence. What we are seeing instead are public-facing cracks in what were perceived to be the Prime Minister’s core strengths: economic stewardship and disciplined organizational management.
Last Friday’s economic numbers showed that Canada experienced two consecutive quarters of declining GDP — Q4 2025 at -1.0 percent annualized and Q1 2026 at -0.1 percent annualized — putting Canada into what is commonly called a “technical recession.” That does not settle the broader debate about the health of the economy. There is a legitimate academic argument that two consecutive declining quarters, on their own, do not tell the full story. Economists point to the absence of the “three Ps” of an economic downturn: pronounced, pervasive, and persistent.
The political problem for the Prime Minister, like that of Premier Ford, is that the structural barriers, hindrances, and challenges continue to pose a longer-term problem for his image as a level-headed economic manager. These problems are deeper-seated and more acute than many assumed. The Prime Minister himself has acknowledged that historic increases in immigration during the Trudeau years essentially juiced the Canadian economy, helping to fuel housing and consumption uptrends. Ironically, it is Prime Minister Carney’s own immigration reduction policies that have exposed these weaknesses. Without consistently high immigration numbers, what is revealed is a weakening labour market, weak capital investment, and persistent productivity declines across the economy.
Increased immigration corresponds with increased government spending that also artificially props up the economy. Now that the Prime Minister has taken a more conservative position on immigration, he has had to double down on the spending.
The Parliamentary Budget Officer’s latest outlook makes that clear. Ottawa is now staring at a roughly $68-billion deficit for 2025-26, with the PBO warning that future shortfalls will run about $4.6 billion a year higher than even the government’s own Spring Economic Update had pencilled in. Instead of gliding back toward balance, the federal books are on track for deficits averaging in the mid-$60 billions every year for the rest of the decade, and the debt-to-GDP ratio, which Carney once promised would steadily fall, is now projected to drift back up.
What are Canadians getting for all that red ink? Not a boom. Real GDP per person has fallen in five of the last six quarters and is now back around 2017 levels, despite some of the fastest population growth in the developed world. Over the past decade, more than four-fifths of our headline GDP growth came from adding people rather than producing more per person. We used mass immigration to keep the aggregate numbers looking healthy while productivity flat-lined and business investment sagged. Now that Carney is capping inflows, the same job is being handed to federal spending.
The government got some reprieve yesterday when Statistics Canada reported 88,000 jobs created in May, defying economists’ expectations and pushing the unemployment rate down to 6.6 percent. However, this only partially makes up for the 112,000 net jobs lost in the first four months of the year, and the biggest gains were concentrated in Ontario and British Columbia, with some of the growth coming from construction and accommodation and food services. In other words, the World Cup, like the high amounts of immigration and spending over the last ten years, is masking the underlying structural issues that are knee-capping the economy.
These problems will grow more acute and will not be relegated to numbers on a balance sheet. Canadians will feel the effects of a depreciating economy faster than the numbers can reach a policymaker’s desk. If the Prime Minister wants Canadians to remain confident in the economy, and continue to see him as its only capable manager, he will need to show that he can address the underlying weaknesses, not just paper them over.
Christopher Mourtos, writing on behalf of ONpoint Strategy Group
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ONpoint Strategy Group is all about helping clients make an impact where it counts. Specializing in government relations and strategic execution, our team—Nico Fidani-Diker, Mariana Di Rezze, David Morgado, Christopher Mourtos, Ellen Gouchman, and Brandon Falcone—works closely with clients to navigate complex political landscapes and bring their goals to life. With a practical, results-driven approach, we build strong relationships, craft winning strategies, and make sure every step brings clients closer to meaningful outcomes. We’re passionate about making sure our clients are heard, supported, and positioned for success.