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TORONTO \u2014 Ontario\u2019s deficit projection is shrinking in its fall fiscal update, but so are the province\u2019s expectations for the\u00a0labour\u00a0market as U.S. tariffs are expected to continue hitting the economy.<\/span>\u00a0<\/span><\/p>\n The government projected in its spring budget that this year\u2019s deficit would be\u00a0$14.6 billion, but Ontario now expects to end the year\u00a0$13.5 billion\u00a0in the red.<\/span>\u00a0<\/span><\/p>\n Finance Minister Peter\u00a0Bethlenfalvy\u2019s\u00a0fall economic statement tabled Thursday still has the province planning to balance the books in 2027-28.<\/span>\u00a0<\/span><\/p>\n \u201cThese trying times\u00a0demand\u00a0we maintain a steady fiscal hand and work to restore balance,\u201d\u00a0Bethlenfalvy\u00a0said in the legislature. \u201cThey demand we protect our workers, businesses and national industries from uncertainty. They\u00a0demand\u00a0we build projects worthy of a nation whose economic strength is matched only by the strength of its people.\u201d<\/span>\u00a0<\/span><\/p>\n The fiscal update\u00a0contains\u00a0few new investments, though the province is enhancing and expanding a manufacturing investment tax credit and adding $100 million to a fund that helps small- and medium-sized businesses diversify into new markets.<\/span>\u00a0<\/span><\/p>\n The remaining\u00a0$4 billion\u00a0from a\u00a0$5-billion\u00a0Protecting Ontario Account the government\u00a0established\u00a0this year to support sectors affected by U.S. tariffs has not yet been\u00a0allocated, but the government said it is working on the next funding streams.<\/span>\u00a0<\/span><\/p>\n Economic headwinds in the near term are pushing the province\u2019s expectations for real GDP growth to 0.8 and 0.9 per cent this year and next, sharply down from last year\u2019s 1.8 per cent.<\/span>\u00a0<\/span><\/p>\n The average unemployment rate is expected to rise by\u00a0nearly a\u00a0full percentage point to 7.8 per cent this year. The rate is projected to decline in the\u00a0following\u00a0years, but\u00a0is expected to still sit higher than what was projected this spring in the budget.<\/span>\u00a0<\/span><\/p>\n \u201cSlowing economic activity and lower population growth due to changes in federal immigration policy are projected to contribute to a softening in Ontario\u00a0labour\u00a0market activity and easing employment growth,\u201d the government wrote in the fiscal update.<\/span>\u00a0<\/span><\/p>\n Employment rose 0.7 per cent in the first quarter of this year but declined by 0.5 per cent in the second quarter. It is projected to slow further to 0.4 per cent next year \u201cas economic growth continues to be impacted by ongoing trade conflicts and the effect of the associated uncertainty on investment and hiring,\u201d the government wrote.<\/span>\u00a0<\/span><\/p>\n Ontario\u2019s contingency fund will now sit at\u00a0$4.5 billion, after a $2-billion\u00a0top\u00a0up through the fall economic statement, and the reserve\u00a0is at\u00a0$2 billion.<\/span>\u00a0<\/span><\/p>\n Through the fiscal update, the government said it is exploring some changes to pensions and rideshare rules.\u202f<\/span>\u00a0<\/span><\/p>\n Ontario is developing a legislative framework for a new pension option called a variable life benefit, through which monthly pension payments would be adjusted based on the fund\u2019s investment performance and how many other living members are in the fund.<\/span>\u00a0<\/span><\/p>\n The province is also looking to consult on standardizing rideshare guidelines across Ontario, as rules such as application fees and driver screening requirements can vary by municipality.<\/span>\u00a0<\/span><\/p>\n \u00a92025 The Canadian Press<\/strong><\/p>\n<\/p><\/div>\n