To the Point for the Week of May 4th, 2025
ONTARIO
The State of the Economy and Ontario Budget 2025
Statistics Canada’s April 2025 Labour Force Survey paints a sobering picture of Canada’s economy, and Ontario is no exception. The national story is one of stagnation. Job growth is barely positive, unemployment is creeping upward, and core sectors like manufacturing are bleeding jobs. While the labour force continues to grow, employment is not keeping pace. The result is a declining employment rate and renewed scrutiny of Canada’s long-standing productivity challenges.
In Ontario, the numbers are worse. The province lost a significant number of jobs in April, particularly in manufacturing and retail. The unemployment rate now sits at 7.8 percent, its highest level in over two years. The fallout from U.S. tariffs is acute in regions like Windsor, where the local economy is under serious strain. Despite steady wage growth, the overall picture is of a labour market under pressure and a province staring down real economic headwinds.
That’s the backdrop as the Ford government prepares to table its 2025 budget on May 15. And the message coming from Queen’s Park is clear: this will be a budget focused on jobs, not balance. With tariffs threatening investment and hollowing out core industries, the government is reorienting its agenda to provide immediate support for vulnerable sectors while laying the groundwork for long-term economic resilience.
Here’s what we’re watching:
Tariff Relief Will Take Centre Stage
Expect up to $8 billion in direct support for businesses and workers, plus another $11 billion in broader relief measures such as tax deferrals, cash flow support, and sector-specific credits.
Manufacturing Gets a Red-Carpet Treatment
The Ontario Made Manufacturing Investment Tax Credit is expected to expand, alongside new rounds of funding for the Advanced Manufacturing and Innovation Competitiveness (AMIC) Program. These tools will backstop investment in automation, AI, and green manufacturing.
Workforce Resilience over Austerity
The province is doubling down on training. Nearly $1 billion over three years is already earmarked for upskilling and workforce transition programs to help displaced workers adjust to the new economic landscape.
Legislative Tools to “Unlock” Growth
Two major legislative changes are expected to accompany the budget next week. A revamped development charge framework will aim to improve cash flow flexibility and reduce upfront financial burdens for housing developers—removing key barriers that have delayed project starts. The province is also looking to improve transparency around how municipalities manage development charge revenues, including reserve fund use and reporting. The government will also afford the Minister of Infrastructure the power to issue a Minister’s Zoning Order (MZO) to fast-track major developments and override local zoning barriers for the purpose of increasing density around transit-oriented communities (TOC). Changes to archeology study timelines and reporting structure are also in the works but won’t be included in the legislation expected to be tabled next week. Together, these measures signal Queen’s Park’s appetite for aggressive, pro-growth intervention, even if it provokes pushback from municipalities.
Affordability Will Make the Cut
While not the centrepiece, expect some nods to affordability through support for childcare, housing, and healthcare, although likely constrained by available fiscal room.
Balanced Budget? Not This Year
Premier Ford and Finance Minister Bethlenfalvy are signaling a shift in priorities. With economic risks mounting and revenues weakening, Ontario is prepared to run higher deficits in the short term to protect jobs and sustain growth.
The Political Bottom Line
This is not a budget built to impress bond rating agencies. It’s a budget designed to reassure workers and businesses that the government is willing to intervene, spend, and legislate to keep Ontario’s economy moving. Two major legislative pillars—the Protecting Ontario by Unleashing our Economy Act and the Protect Ontario Through Free Trade Within Canada Act—underscore the government’s intent to eliminate barriers to growth and stimulate investment at scale.
The first streamlines development approvals and deals with development charges to fast-track housing and industrial projects. The second aims to knock down interprovincial trade barriers that limit Ontario businesses from accessing broader markets. Together, they reflect a governing philosophy that sees regulatory efficiency and internal trade liberalization as just as important to economic recovery as direct financial support.
The logic is straightforward. With trade shocks mounting and key industries on the brink, the province sees no alternative but to act. By pulling fiscal and legislative levers, the government is aiming to steady the economy, protect jobs, and keep Ontario competitive through a period of uncertainty.
FEDERAL
Carney’s DC Debute
The most anticipated meeting between a Canadian Prime Minister and a U.S. President in recent memory took place this week, as Prime Minister Mark Carney travelled to Washington for his first official bilateral with a foreign leader. The meeting was a marked contrast to past high-profile visits, like the 1985 Quebec City Shamrock Summit between Ronald Reagan and Brian Mulroney or Justin Trudeau’s 2016 state visit to the Obama White House. Those engagements were characterized by shared vision, warmth, and major agreements on trade and environmental cooperation. This one was defined by tension—on trade, sovereignty, and security.
While online partisans will tell you either Carney schooled the President or got schooled by him, the truth lies somewhere in between. The Prime Minister did about as well as any foreign leader could in the Oval Office with President Trump, flanked by senior White House officials and the media. Carney appeared confident and composed, though there were moments of awkwardness as he searched for appropriate openings to interject or build on the President’s remarks.
Carney flattered Trump by calling him a “transformational” leader and praising his actions on securing the border against fentanyl, as well as his approach to NATO and global security. That part raised eyebrows, particularly from critics on the left who have long lambasted Trump on both fronts. Still, many observers see this as the right tactic given the size of the President’s ego and the stakes of the meeting.
To the Prime Minister’s credit, he had some strong lines. When responding to Trump’s repeated joke about making Canada the 51st state, Carney quipped that "not all real estate is for sale" and added that he’d consulted the "owners of Canada," who have no interest in selling or surrendering sovereignty. Trump, ever the showman, replied with a smirk: “Never say never.”
The meeting remained cordial throughout. Both leaders emphasized the special relationship shared between the two nations. Trump declared that Canada was, is, and always will be a friend of the United States—and insisted America would come to Canada’s military defense if ever needed. Carney, in turn, spoke of the historical partnership and stressed that Canada and the U.S. are stronger when they work in tandem.
Still, substance was thin. Carney’s later media appearance confirmed that the meeting laid the groundwork for future talks but offered no clarity on key friction points, areas of possible compromise, or how a renewed trade relationship might impact continental security. The lack of detail likely frustrated business leaders—particularly in trade-reliant industries—who were hoping for a signal that the dispute is moving toward resolution.
There was a glimmer of optimism on Thursday, when President Trump announced a new trade agreement with the United Kingdom. The deal would cut tariffs on American-made cars and eliminate them entirely on steel and aluminum. In return, the U.K. would expand market access for U.S. products like beef. While not finalized, the agreement’s structure offers clues into how future deals could be negotiated.
The U.S.–U.K. agreement, which offers sector-specific tariff relief in exchange for targeted concessions, could serve as a blueprint for Canada. It suggests the U.S. is open to negotiation, even amid protectionist rhetoric, provided there is something meaningful on offer. For Canada, this presents a chance to re-engage on steel, aluminum, and autos, sectors under intense pressure. The move toward “managed trade,” where each side bargains for industry-specific outcomes, marks a departure from broad liberalization—and is a sign that Canada must be ready to negotiate hard.
But there’s urgency. If Canada waits too long, other countries will secure preferential access to the U.S. market. A Canada–U.S. deal would likely come with tough asks from Washington, particularly around agriculture and digital services. While politically risky, these may be necessary concessions to protect Canadian jobs and market share. The U.S.–U.K. deal proves Trump is willing to deal. Now it’s Canada’s move.
All of this leaves a lingering tension. During the campaign, Carney declared that the “old relationship with the United States, a relationship based on steadily increasing integration, is over.” Yet in Washington, he emphasized the importance of collaboration on trade and security. You can’t blame Canadians for asking whether they’ve had the wool pulled over their eyes. Was the campaign rhetoric simply designed to stoke anxiety about U.S. intentions? If so, it would mark a new low in political cynicism. The Prime Minister would be wise to reconcile the message he delivered on the trail with the reality of governing. If he doesn’t, it risks eroding public trust in the political process and the office he now holds.
The Carney–Trump meeting didn’t resolve anything, but it cracked open the door to future progress. Yesterday’s Labour Force Survey confirmed what many already feel—Canada’s economy is barely treading water. Job growth is stalling, unemployment is rising, and core sectors like manufacturing are shrinking. Meanwhile, the U.S. is cutting deals and moving on. If Carney wants to prove the critics wrong, he’ll need to move quickly—and deliver more than clever lines and diplomatic charm.
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To the Point – ONpoint Strategy Group's weekly roundup – cuts through the noise to deliver insight and analysis of key federal, provincial, and municipal stories shaping Canada's policy and political landscape. Designed for decision-makers and thought leaders, this newsletter is your go-to resource for staying ahead. Share these trusted insights with your network to spark meaningful conversations. Simply hit forward or follow ONpoint Strategy Group on X and LinkedIn to spread these valuable perspectives."
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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, Krystle Caputo, David Morgado, Christopher Mourtos, Ellen Gouchman, Brandon Falcone, and Mike Britton—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.
