To the Point for the Week of September 20, 2026

To the Point for the Week of September 20, 2026

We assess the impact of the Ford government’s policies to protect Ontario’s economy. The Prime Minister contemplates the risk of US invasion.

ONTARIO

Ontario’s Economy Continues to Hobble Along

It was a mixed bag of news this week for Ontario’s fiscal and economic position amid ongoing, and seemingly never-ending, economic uncertainty stemming from U.S. tariffs. While the government’s books look better than last year, its overall fiscal position has worsened. On top of that, Volkswagen’s subsidiary, PowerCo, announced plans to delay the opening of its massive $7-billion St. Thomas factory until 2029, citing evolving electric-vehicle demand as a core reason for the decision.

All this prompted Premier Doug Ford to convene cabinet yesterday to assess the progress of the various tariff measures the province has implemented to protect Ontario’s economy, which include the $1-billion Protect Ontario Financing Program, the $150 million over three years Ontario Together Trade Fund, $1.3 billion in total capitalization for Invest Ontario, and $40 million for the Trade-Impacted Communities Program. Ministers Fedeli, Bethlenfalvy, Surma, Sarkaria and Lecce were sent out to face the microphones, cameras and media questions and assure everyone that the government’s plan to protect Ontario is working as planned.

The government has consistently outlined what these measures are intended to do: protect jobs, reshore and fortify supply chains, and diversify export markets beyond the United States. But are these multibillion-dollar measures working as planned?

The answer is we simply don’t know yet. While the economic angst produced by the tariffs has felt like an eternity, the reality is that the policy responses implemented by the Ford government are relatively new. There is limited short-term data, and it is too early to confer success or failure without supportive evidence on their impact on exports, productivity, job retention, business survival or supply-chain adjustments.

At his press conference yesterday, alongside Brian Patterson, Ontario’s Representative in Washington, D.C., Minister Vic Fedeli provided some figures to suggest that the supports are working. For example, Fedeli said that 89 companies have received funding through the $150-million Ontario Together Trade Fund, invested a total of $1 billion, and created or saved 10,000 jobs. He added that, over the course of the year, 750 companies invested $35 billion and created 64,000 jobs.

Beyond the numbers highlighted by Fedeli, project-level commitments to companies include $72 million for Tenaris, $90 million for Convertus and $5 million for Massilly, all of which have various job, productivity or expansion outcomes promised. There are no results as of late, and when those outcomes will materialize is not exactly clear.

There are bigger questions to ask about these programs for which the data is not available. Would the supported investments have proceeded without provincial funding? How much funding across all programs has been approved and disbursed? Did recipients increase non-U.S. or interprovincial sales, or reduce U.S. supply-chain dependence? And, if so, by how much?

To be perfectly clear, we’re not implying that these supports are ineffective or useless. It’s all part of the game of incentives jurisdictions play to land investments, and it would be naive to believe we could attract major investments without sweetening the deal a little bit.

At the same press conference, Minister Fedeli said this was all part of a broader play to make Ontario the most competitive economy in the G7. However, these supports were principally designed to address shocks from U.S. tariffs and do not, on their own, alter the province’s competitive environment in any meaningful way. Tax structures, approval timelines, despite recent best efforts, productivity, and the province’s ability to transition research, inventions and intellectual property into globally competitive Canadian businesses producing high-quality products and services are largely missing from the government’s economic toolbox.

The narrow design parameters of the government’s tariff-relief programs are not properly aligned with economic realities. They may soften specific blows from tariffs, like in the automotive sector, but even alongside rises in residential investment and investment linked to data centres, they do not offset the province’s deeper exposure to trade uncertainty and a suboptimal investment environment.

TD Bank’s Provincial Economic Forecast released this week makes it clear that Ontario’s economy remains weakened despite the policy response. The report’s 2026 real GDP growth forecast is now 0.6%. This is revised up from 0.4% due to second-quarter momentum and is now in line with the Ministry of Finance’s survey of private forecasters, who downgraded their forecast from 1.1% to 0.6%. The province’s own budget projected 1.0% growth this year. It is expected to be Ontario’s weakest non-pandemic growth rate outside the 2008 global financial crisis.

TD does call for a relatively modest rebound of 1.5% in 2027, but the province will remain at the whims of President Trump because of Ontario’s manufacturing-heavy economy. Essentially, the economy is hobbling along on pockets of resilience while deeper structural problems persist.

Consequently, this complicates the government’s overall fiscal position as laid out by Finance Minister Peter Bethlenfalvy. The government can happily hang its hat on the fact that the 2025–26 deficit came in at $13 billion compared to the projected $14.6 billion in last year’s budget, but it blows out the $1.1-billion deficit in 2024–25, leaving the government with limited fiscal room to continue expanding these programs without taking on more debt, finding savings or increasing revenues, like taxes, Premier Ford’s kryptonite.

The government can’t fund these tariff supports indefinitely, but it can’t prematurely sunset them either. What it can do, while these programs are active, is advance a more comprehensive competitiveness agenda with broadly agreed-upon policy proposals. For example, it can launch a comprehensive review of provincial taxes, business supports and the regulatory environment to attract more investment, as recommended by the Ontario Chamber of Commerce in its 2026 budget submission. Alternatively, or complementarily, the government can broaden One Project, One Process beyond mining contexts: a single, coordinated approvals window for major projects, as proposed by Ontario 360. The Fraser Institute’s broader corporate and personal tax reforms, which would reduce Ontario’s tax burden on investment and highly skilled workers, are another viable route to improving competitiveness.

These policy proposals don’t reinvent the wheel. But they can help address the conditions that tariff supports cannot: the cost of investing, the time it takes to get approvals and the ability of Ontario businesses to grow without needing a government program every time the economic weather turns.

FEDERAL

War Games

The United States Civil War was the deadliest war in that nation’s history. Fierce, brutal fighting between the Union Army and the Confederacy, which culminated in the end of chattel slavery in America, cost the lives of nearly 700,000 Americans, roughly 2% of the entire U.S. population at the time. Americans experienced widespread and persistent fear of death, conscription, occupation and economic collapse.

Americans were not the only ones experiencing anxieties created by the war. British North Americans genuinely feared that a battle-hardened, one-million-man Union army could pick up its guns and march north. Historically speaking, those fears were not unfounded.

In a February 1776 letter, future American founding father John Adams wrote to a fellow Massachusetts rebel that “the unanimous voice of the continent is Canada must be ours, Quebec must be taken.” Many do not know that an American colonial army occupied Montreal and Trois-Rivières and laid siege to Quebec City. Quebec City was considered the seat of British colonial power in the New World and key to controlling the continent. And who can forget the U.S. invasion of Upper and Lower Canada in 1812? We all know how that turned out.

Even as nineteenth-century great-power wars faded into history, U.S. military planners developed War Plan Red in the interwar period, a contingency for a hypothetical future war against the British Empire with Canada as the North American front. The formal plan was completed in 1930, despite the United States, Britain and Canada having fought alongside one another in the First World War.

The more things change, the more they stay the same. At least, that is what Prime Minister Mark Carney may want Canadians to believe following his New York Times interview, in which he said he had assessed the risk of U.S.-led military action against Canada. The Prime Minister described it as an “extreme tail risk”: remote, but worth preparing for.

We try our darndest not to make light of current events and to approach political and economic developments with objective rigor. Yet it is hard not to view the Prime Minister’s emphasis on such a remote U.S. military scenario as a deliberate political exercise to ensure Canadians’ fear of President Trump is cranked to eleven.

Where to even begin? In simple practical terms, the United States could likely seize key Canadian territory quickly. Occupying and governing an enormous landmass, however, would be an exceptionally tall order, even for a military the size of America’s. More obviously, the United States has larger strategic considerations vis-à-vis Iran, Russia and China. Sorry, Mr. Prime Minister. They’re just not that into us.

Carney may have made these statements as a leader considering an improbable scenario. But their political value is impossible to miss. They keep Canadians’ attention fixed on a persistent and politically useful boogeyman. We are not implying that President Trump’s tariffs are not a threat to Canada. But it risks turning a rational concern about economic coercion into an exaggerated fear of military catastrophe.

Perhaps that is the frame of mind the government would like Canadians to be in when it comes to Canada-U.S. relations. If those fears become persistent, they may give the Prime Minister greater leeway to act as he sees necessary.

A political-media environment primed to see Trump as uniquely dangerous helps solidify this frame. Who can forget the mass-produced op-eds and “analyses” that claimed President Trump would militarily annex Greenland? That never materialized. Instead, the Americans, Danes and Greenlanders reached a negotiated agreement expanding U.S. defence access and military operations on the island while preserving Danish sovereignty. No 82nd Airborne needed.

As a financial-industry veteran and former Bank of Canada and Bank of England governor, Prime Minister Carney understands the concept of diminishing marginal returns. Yet he may be under the impression that it is a concept exclusive to economics. It is not. Repeatedly playing this card will, maybe not today, tomorrow or next week, weaken its effectiveness. All that will be left is his record of results, which, on some policy files, is to be determined.

The British Columbia election triggered this week by NDP Premier David Eby is a cautionary tale for the Prime Minister. Eby, like every other premier, recalibrated his political identity around, essentially, bashing and reacting to Trump. His calculation in calling an election was that an interim-leader-led B.C. Conservative Party would be easy to cast as pro-MAGA, Trumpian and, consequently, too dangerous to lead the province’s fight against U.S. tariffs. The first week of the NDP campaign was all about how the B.C. Conservatives were just MAGA draped in the maple leaf.

It turns out you cannot keep playing the Trump card and expect the same result. Eventually, voters assess their own stations in life and determine whether political leaders have used their agency to enact policies that improve conditions in the province. Early polling suggests that may be where B.C. voters are right now. If those numbers hold, Eby’s Trump-centred election gambit may prove a serious misread of what voters want from their provincial government.

So, while the Prime Minister will get a week or two of headlines about his judicious examination of the low-probability scenario of the 160th SOAR flying helicopters full of Navy SEALs over Rideau Cottage, he would be wise to keep working toward addressing affordability and the day-to-day economic pain points Canadians are experiencing.

Christopher Mourtos, writing on behalf of ONpoint Strategy Group

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