Ontario surpasses Quebec in corporate subsidies, new report says

Ontario could have lowest corporate tax rate in North America if it replaced subsidies with cuts, MEI says

Published Jul 10, 2026  •  Last updated 19 minutes ago  •  2 minute read

A report by the Montreal Economic Institute shows corporate subsidies provided by Queen's Park skyrocketed by 209% over a decade. Photo by CYNTHIA MCLEOD /Toronto Sun

See more Toronto Sun on Google — save as a Preferred Source

Article content

OTTAWA — Ontario has replaced Quebec as Canada’s biggest spender on corporate subsidies, according to a new report.

Article content

Article content

And if Ontario replaced its corporate welfare framework with tax cuts, the province would be positioned to offer the lowest corporate tax rates in North America, said the report released Friday by the Montreal Economic Institute (MEI.)

“For the longest time, Quebec had a reputation of being the corporate welfare king,” said Renaud Brossard, MEI’s vice-president of communications.

“We noticed that since 2017, actually, Ontario has taken over that crown and is now the biggest spender on corporate welfare in the country.”

Read More

1. 

   GOLDSTEIN: Canada’s electric vehicle industry is running on subsidies

2. 

   Connecting Kingston to high-speed rail line expected to cost $3.9B: CTF

Subsidies increased by 209% in a decade

Indeed, Ontario’s spending on subsidies, Brossard told the Toronto Sun, had grown by over 200% over the past decade, even when adjusted for inflation. 

Article content

Article content

“This means more and more taxpayer dollars that are going into a handful of politically favoured projects as opposed to being left in the pockets of entrepreneurs that can better allocate those resources,” he said.

Ontario’s corporate subsidies increased from around $2.9 billion in 2014 to $11.5 billion in 2024, according to the most recent data. Adjusted for inflation, that’s a 209% increase over the time period — or $713 per Ontario resident annually.

In contrast, Quebec’s provincial government only spent $8.5 billion on subsidies.

Ontario collected $27.8 billion in corporate taxes during the 2024-25 fiscal year.

If Ontario did away with business subsidies and instead put that money toward broad corporate tax cuts, the provincial tax rate could drop from 11.5% to 4.75%.

RECOMMENDED VIDEO

Cutting tax rate ‘helps everybody’

When combined with federal corporate taxes, Ontario businesses would see a tax rate of only 19.75%.

“Even when we account for federal taxes, that would make Ontario the lowest corporate tax jurisdiction in all of North America,” Brossard said.

Article content

“There would be a potential for Ontario to be so much more attractive to businesses of all sorts if it wasn’t just trying to pick and choose a couple of businesses to subsidize.”

This would benefit every corporate sector in the province, he said.

“A subsidy is often a one-off,” Brossard explained, saying that after Year 1 subsidized businesses still face high corporate tax rates.

“That helps the big automakers like GM or Stellantis, but also the mom-and-pop shops — it helps everybody with making sure they have a little bit more money in their pockets at the end of the year, which means more money to invest in growing their presence in Ontario.”

[email protected]

Article content