March 10, 2026
The Empire Club of Canada Presents
Hon. Peter Bethlenfalvy: The Ontario Finance Minister’s Annual Pre-Budget Address
Chairman: Saurabh Popat, President, Board of Directors, Empire Club of Canada
Moderator
David Herle, Co-founder, Air Quotes Media, Host of the Curse of Politics & The Herle Burly podcasts; Partner, Rubicon Strategy
Distinguished Guest Speaker
The Honourable Peter Bethlenfalvy, Ontario’s Minister of Finance
Head Table Guests
David Lebiter, President & CEO, Hydro One
Michelle George, Senior Vice President, Chief Transition Officer, Enbridge, Inc.
Welcome Address by Saurabh Popat, President, Board of Directors, Empire Club of Canada
Good afternoon, everyone. Good afternoon. My name is Saurabh Popat. I’m the chair of the board of directors here at the Empire Club of Canada, and your hosts for today’s event.
To formally begin, I’d like to acknowledge that we are gathering on the Traditional and Treaty Lands of the Mississaugas of the Credit, and the homelands of the Anishinaabe, the Haudenosaunee, and the Wendat Peoples. I encourage you all to learn more about the Traditional Territory on which you work and live.
Now, today’s event would not be possible without the generous support of our incredible sponsors. The Empire Club is a non-profit organization, and our sponsors generously support the club and make these events possible and complimentary for our online viewers to attend. So, please join me in thanking our Lead Sponsors, Hydro One and Enbridge. Thank you. Thank you to our VIP Reception Sponsors, the Ontario Road Builders Association, Burson, formerly Hill & Knowlton, Canada Life, Echelon Insurance, Fidelity Investments, Heidi Health, Insurance Bureau of Canada, LiUNA, Ontario Association of Medical Laboratories, Toronto Port Authority, Wine Growers of Ontario, and Westinghouse. Thank you all. And to our Supporting Sponsors today, CPA Ontario, FP Canada, Labatt, Ontario Real Estate Association, Primerica, and TD Bank Group. Thank you. We’re also deeply appreciative of the ongoing support of our Lead Season Sponsors, Bruce Power, Hydro One, and National Bank Capital Markets, and our VIP Reception Season Sponsors, Ellis Don, McKinsey & Company, the Ontario Road Builders Association, and Waste Connections of Canada. Thank you all. And finally, thank you to our Media Partner, the Toronto Star, and our AV Partner, Bespoke Audio Visual. Thank you.
If you have a question for our speakers, please scan the QR code found on your program, or through the Q&A function, if you’re online.
Now, to begin the program for today, it’s a real pleasure to once again host Minister Bethlenfalvy and his pre-budget tradition of speaking here at the Empire Club of Canada. And this is especially important given the turbulent times that we are living through. I will add, as well, this is the second largest attendance for this season, just after the Premier of Ontario. So, well done, Minister.
There are over 800 leaders here from business, government, finance, labour, insurance, healthcare, and so many more gathered here at a moment where we need to be clear about Ontario’s economic path. Thank you for being here and part of this discussion today. And while we all come from different sectors and backgrounds, I bet there’s one thing we all have in common. We are united in our current sense of uncertainty, but we are all committed towards building a stronger and more resilient Ontario. Thank you.
We are very fortunate to have steady leaders here in the province such as Minister Bethlenfalvy to help us navigate through this uncertainty. The Minister has been clear that having a strong balance sheet will allow us to act quickly to protect our workers and communities, while making investments in strategic priorities to unleash our economy and make Ontario the most competitive place in the G7 to invest, create jobs, and do business.
We know that Ontario plays a central role in our country’s economic future. And we also know that decisions made in the weeks ahead will shape how we attract investment, build infrastructure, power growth, and compete within the G7. Strengthening Ontario’s competitiveness and economic resilience while protecting Ontarians from global turbulence is no easy task. That is why this year’s pre-budget address, which will provide early insights into the government’s fiscal direction before the budget is tabled, is so critical for the leaders here today.
Now, before we begin, I want to acknowledge our Lead Sponsor, Hydro One. Hydro One powers communities and industries across Ontario. Its infrastructure underpins growth, supports electrification, and enables the investment that keeps our province competitive in a rapidly evolving global economy. It’s now my great pleasure to invite David Lebiter, President and CEO at Hydro One, to offer opening remarks. David?
Opening Remarks by David Lebiter, President & CEO, Hydro One
Good afternoon. And thank you for having me up here today. And it’s sure, on behalf of Hydro One’s 9,500 employees, I want to say it’s a real honour to be the Lead Sponsor of today’s event. And you’ll notice I brought some notes up with me, but unfortunately, it’s too dark up here. I can’t read them, so we’re gonna have to wing this one. Sorry, Raul. I tried, buddy. Gotta add some levity in here, anyways. Going by memory here, let’s see what we can pull together.
So, on behalf of our Hydro One’s 9,500 employees, really a pleasure to be here today representing the team. And as was already said, what Hydro One does is foundational to this province. We invest in electrical infrastructure, which is really the backbone of our economy. And today, we’re gonna hear from Peter Bethlenfalvy, who’s gonna give us some insights into Ontario’s next budget. And that’s a budget that will also set the backbone for the economy of Ontario and investment in Ontario. And as we saw in the quote that was put up by Peter, we want Ontario to be the place that the world chooses to invest.
And in order to do that, to be that place that the world wants to invest, you have to have a solid foundation. And a solid foundation consists of infrastructure. Infrastructure such as what Hydro One owns and operates. Transmission lines, distribution lines. Infrastructure such as roads. Infrastructure such as healthcare. You need those basic foundations. And underpinning all of that, you need a strong financial system and balance sheet. And that is why at Hydro One, every dollar we spend, we take that very seriously. Because we know what we are spending is money that comes out of our customers’ pockets. And that is why our supply chain is over 90% Canadian sourced. Because by spending money in Canada, predominantly Ontario, we’re supporting jobs, well-paying jobs, and we’re supporting families, and we know that’s good for the economy.
Now, Minister Bethlenfalvy’s been the Minister of Finance since 2020, and part of his responsibility in that role is to ensure the province has a strong balance sheet. To ensure that the investments the province makes are supporting infrastructure. To support investment in this province. And I, like you, I am sure am looking forward to seeing what he’s got planned for us for 2026 through to 2027, and how we are gonna make this the best province in the G7 to invest. With that, let me introduce Minister Peter Bethlenfalvy to the stage. Thank you.
The Honourable Peter Bethlenfalvy, Ontario’s Minister of Finance
Thank you. Thank you. Thank you. That’s a real honour to get that kind of reception. Last time I got that, that was in a room that had no chairs, so they had to applaud. But you have chairs, so I’m very grateful for that. Thank you, all of you, for that great reception. Thank you, David, for those comments. Saurabh, as well, thank you for your intro. Kent Emerson and the whole Empire Club team, you do a remarkable job here. And you said I came number two, in terms of the crowd size? We’re told never talk about crowd size. And I say to myself, what a great crowd. But thank you, it’s a privilege to be here.
I do wanna also acknowledge some great colleagues who are in the room. I wanna first acknowledge our great Cabinet Minister, Jill Dunlop, MPP. Please stand up, Jill, let’s see. Cabinet Minister. Emergency Management, taking care of all of us. Thank you for what you do. I know my awesome, awesome—and I really mean awesome—parliamentary assistant from Eglinton-Lawrence. A lot of trials and tribulations in the riding and beyond. You’re a steadfast leader in the community. You’re a great parliamentary assistant to the Minister of Finance, Michelle Cooper. There you go. And last but not least—and I think she knows it’s coming—the great, my colleague, my friend, my friend who works together day in, day out on the budget throughout the whole year, a great President of the Treasury Board, MPP, Caroline Mulroney. So thank you, all of you, and any other colleague that’s online and watching. Thank you for your great team presence, and your support over the years.
This is my sixth budget coming up, and let me tell you, it takes a team to put budgets together, and it’s a full effort. I also want to thank MPP Bill Rosenberg, who is here, and I think you may be here, may not be here. I think he may have been caught in traffic—and no surprise, it took me an hour to come down from Queen’s Park to get here. It’s a true story, you know, down Bay Street. University is closed—nevermind.
But I really do value coming here, because it’s important to bring together leaders who turn ideas into action. Ontario does not operate in isolation. Geopolitical forces that may have once felt distant now reach our doorstep. Trade pressures, supply chain disruptions, and shifting markets are sending unpredictable shocks throughout economies everywhere. You know, the world has changed, and Ontario must be ready for what change may bring, even if that means being prepared for tougher times. [Remarks in French].
We’re already starting to see the impacts across the country. Other provinces so far this year have published record deficits while hiking taxes and cutting public sector jobs. Here in Ontario, we don’t believe in raising taxes, and we will continue to build on our record of making life more affordable for people, and businesses, and support job growth, while ensuring we deliver government programs and services efficiently and sustainably. That is why our economic and fiscal plan, articulated in our annual budget, includes prudence, and puts us in a strong position to weather economic shocks.
Now, they don’t remove the bumps, but they do keep us on a secure road and course. Our plan protects Ontario today, and builds the province we want tomorrow. As a government, we cannot eliminate uncertainty, but we can mitigate risks with responsible, balanced fiscal approach that supports public services and infrastructure, while maintaining flexibility. That is just what we are doing. We’re doing whatever we can to create jobs and grow our economy, and this allows us to keep investing in healthcare, education, and the public goods that support our quality of life, and boost our competitiveness.
And despite global headwinds, Ontario’s economy showed resilience in 2025. Real GDP grew by 1.2% in 2025, higher than forecasted in last year’s budget, reflecting the hard work of people and businesses, and many of you here in this room and across the province. But we remain clear-eyed. Growth is uneven. The outlook is uncertain. Recent job trends show many still feel the pressure, and that is exactly why a pragmatic, steady plan matters. From a fiscal perspective, stability matters. And as we near the end of the ’25-’26 fiscal year, Ontario’s third quarter finances released last month show our plan is working. Many key projections outperformed the target set in November’s Fall Economic Statement. We had stronger than expected revenues, and Ontario’s net debt-to-GDP ratio was tracking at nearly a full percentage point lower than projections just one year ago. Yeah, that’s a good little whistle, there. I’ll take that.
Borrowing costs remain stable at 4%, and Ontario’s already completed required borrowing for this year as well as pre-borrowing for next year to reduce financial market risk. Our projected deficit stood at $13.4 billion in improvement over the fall outlook. And for the first time in almost 20 years, Ontario received two credit rating upgrades and maintained double-A ratings across all four major credit rating agencies. That’s also worth a whistle. But you know, these are not endpoints in themselves. They can be seen as signals that we have fiscal discipline, and fiscal discipline protects our capacity to invest where it counts and navigate uncertainty. The upcoming 2026 Ontario budget will include updates on Ontario’s economic and fiscal matters.
Today, I want to outline the priorities shaping our plan, as we look ahead to the next fiscal year. First, productivity and innovation. Ontario’s long-term prosperity depends on increasing our capital, and our output per worker and per dollar. That means accelerating technology adoption, attracting private investment, and commercializing Ontario-made research. We are supporting growth in AI, advanced manufacturing, energy, life sciences, defence, construction, and security technologies and critical minerals, anchored by world-class research institutions, and supply chains stretching from the Ring of Fire to our innovation corridors. And our goal is simple. Turn ideas into investment and investment into jobs and exports.
Second, a predictable, competitive business environment. We know that businesses invest boldly when rules are clear and timetables are reliable. So, as a government, we are doing our part by cutting red tape, speeding up approvals for major projects, and reducing interprovincial barriers so firms can better access markets across Canada. In fact, just this month, our government signed a first-of-a-kind agreement with Nova Scotia to allow consumers to purchase alcohol directly from producers. This will give consumers greater choice and convenience, while creating more opportunity for producers right here in Ontario. Because this underscores our commitment to interprovincial trade by demonstrating leadership and our resolve to knocking down barriers. And our upcoming budget will include further competitiveness measures for businesses, so that they continue to invest here in Ontario.
Third, infrastructure and housing. Ontario’s delivering the most ambitious capital plan in its history, building highways, transit, and community infrastructure to keep goods moving, and people working. These investments support population growth. They raise productivity and they strengthen our communities. Our housing, where we are accelerating approvals which enable essential water and service infrastructure to be built, and aligning investments where homes can be built. Because a functioning housing market is a competitiveness strategy that helps attract and keep construction jobs, while boosting affordability and growing our economy.
Fourth, trade and competitiveness. U.S. tariffs have disrupted supply chains and created uncertainty. Ontario is helping affected businesses diversify and expand trade within Canada and globally. This is why we’re investing millions to increase resilience, build capacity, and reshore critical supply chains to Ontario.
Fifth, talent in the workforce. People, power, prosperity. There’s no question about that. And that’s why we’re investing across the entire talent and workforce pipeline from required tech courses in high school to more post-secondary seats in STEM, healthcare, teacher education, and skilled trades. And this year, just a few weeks ago, we made a historic $6.4 billion investment over four years to support Ontario’s colleges, universities, and Indigenous institutions, on top of the five billion—I’m pretty sure Steve Orsini, the head of the university, started that applause. Yes, he agrees. On top of the five billion we invest every year to ensure our students can get the skills they need to launch good-paying, in-demand careers. And we are making provincial and Canadian credential recognition faster and creating retraining options for mid-career workers.
And finally, sixth, reliable, affordable, clean energy. Ontario’s energy system is a massive competitive advantage. The first of four small modular reactors at the Darlington Nuclear Station is now under construction. If you’re ever out that way, take a look. It’s amazing what’s happening out in Darlington. This is a world-leading project delivering emissions-free, dependable power, and thousands of supply chain jobs. And we’re also strengthening our EV and battery manufacturing ecosystem, positioning Ontario as a global hub for next-generation technology and mobility.
Across all these themes, we are unlocking the Ring of Fire, strengthening domestic supply chains, accelerating northern infrastructure, and preparing to seize emerging opportunities, such as Toronto’s bid for the Defence Security and Resilience Bank headquarters. And so I return to my central message. Our plan is working. It is cautious where it must be, and ambitious where it should be. It protects people and services today, ensuring government programs are delivered efficiently and sustainably. This is how a government builds the foundations for higher productivity and stronger growth. And it preserves the flexibility required in a world where shocks can arise without warning. And I welcome all of you to tune in to hear more about our plan when I table the 2026 budget on Thursday, March 26th.
Ladies and gentlemen, the choice ahead is clear. We will protect our economy, strengthen competitiveness, and invest in the sectors that define the future, from AI and advanced manufacturing, to clean energy, life sciences, critical minerals, and beyond. [Remarks in French]. We will continue to build the infrastructure that supports growth, homes that are welcoming, and skills that yield opportunities. We will manage finances responsibly so Ontario remains resilient and self-reliant.
Now, we all have a role to play. Government, business workers, educators, and community leaders. And with the same spirit of partnership that has carried Ontario through past challenges, we will not only adapt to change, we will lead it. Thank you for your leadership, your partnership, and your commitment to building Ontario’s future. Thank you for being here. Thank you, everyone.
Saurabh Popat
Thank you so much, Minister. The date’s set, cat’s out of the bag. We’re all gonna be looking forward to the budget on the 26th. We appreciate the preview, and certainly, the opportunity to reflect on the budget ahead. And of course, we appreciate your steady leadership over the past many years. I think you’re the second-longest-serving finance minister in the Federation, so that is also fantastic to know.
Now, we’re fortunate to have a great moderator and also leader in his own right, someone who knows how to draw out insight and is never shy about asking the question everybody else is thinking. David Herle is co-founder of AirQuotes Media, the host of the Curse of Politics, one damn good podcast, and the Herle Burley podcast as well, and a partner at Rubicon Strategy. He has spent decades immersed in Canadian politics, advising leaders, and shaping campaigns. David, thank you for being here. I’ll invite you to join the stage.
The Hon. Peter Bethlenfalvy
I gotta say, David, you must be a little—I’m uncomfortable sitting a little left of you, but you must be really uncomfortable sitting to the right of me.
David Herle, Co-founder, Air Quotes Media, Host of the Curse of Politics & The Herle Burly podcasts; Partner, Rubicon Strategy
Well, you know, I used to balance budgets.
The Hon. Peter Bethlenfalvy
Yeah, I will say, though, how many credit upgrades did you get when you were in the Ontario….
David Herle
This is a great opportunity. Thanks for asking me to do this, because I had the opportunity to know you before you got into politics, and it’s always great to see somebody of your calibre go into politics. As was kind of mentioned, you’ve been doing it for eight years now. How are you liking it?
The Hon. Peter Bethlenfalvy
That’s great. What an opportunity. You know, my story, some of you’ve heard it before. You know, I’m the son of two Hungarian refugees who came, I guess, in ’51, thereabouts, with nothing but the shirt on their backs coming to this country. You know, Canada gave them five bucks, and gave them the opportunity. They didn’t want a handout. They wanted an opportunity. And my dad worked on the farms in Ontario. He got supported by the community to have a job at Hydro One, of all places, at night, and he went to U of T during the day. Didn’t speak a word of English. Had no, he had only one set of clothes. He actually showered in his clothes, to wash his clothes. My mother, as well, came with her family from World War II, left in ’44, arrived here. And Canada gave him a great opportunity to build a life, to have a career, to get educated, to have a job. I grew up in that, you know, hearing the stories about what it was like behind the Iron Curtain. So, what a great opportunity and a privilege to hold this seat, and try to work on Ontario and Canada, leave it a little bit better for the next generation. Because that’s what Canada did for my parents.
David Herle
Yeah, excellent. Did you grow up in Montréal?
The Hon. Peter Bethlenfalvy
What’s that?
David Herle
Did you grow up in Montréal?
The Hon. Peter Bethlenfalvy
Yeah. Yeah, hardcore Québecer.
David Herle
Yeah.
The Hon. Peter Bethlenfalvy
I was wearing a Québec Nordiques hat the other day.
David Herle
I was gonna say, the Habs are pretty good this year.
The Hon. Peter Bethlenfalvy
You know, it’s really cool to see, you know, who remembers the Québec Nordiques. You can age yourself, so I wear that hat. And let me tell you, not too many people recognize the Québec Nordique hat, so that makes me pretty old, I guess.
David Herle
Right. But you weren’t a Nordiques fan. You had to be a separatist to be a Nordique fan.
The Hon. Peter Bethlenfalvy
We hated the Nordiques. Good point, I don’t know why I’m wearing their hat. But I just had a friend who had a Montréal Canadiens tie. I know you’re a big Habs fan.
David Herle
Yeah.
The Hon. Peter Bethlenfalvy
This will probably kill the mood in the room. I continue to be a big Habs fan. That said, I really want the Leafs to win. It’s just too long since ’67, so go Leafs. If not the Leafs, the other Canadian teams, I’m a total Canadian patriot.
David Herle
Yeah, the Leafs are not going to win. Right, I hope the other projections are based on more solid information. I’d like to start this conversation sort of at 30,000 feet, because we’re at a really, really, you know, interesting, as the Chinese would say, time. And so much seems to be in flux about our economy. There’s obviously the immediate change in the relationship with the United States and that. But there’s also, you talked about AI. That feels like that’s gonna be a massive change. There’s unsettling things around the world. Climate change hasn’t gone anywhere. All these pressures are coming to bear on the Ontario economy. And I’d just like you to talk a little bit about how you see the economy in the near term. And I’m kind of taken by the fact that Stephen Harper talks about fighting the Americans as if that’s gonna cost us something. But nobody active in politics wants to talk about that as if it’s gonna cost us something.
The Hon. Peter Bethlenfalvy
Yeah, look, I think our relationship with the US is gonna continue. And it’s gonna be a robust relationship by force of geography, history, culture, language, our largest trading partner, a few bumps in the road. But we go through that, from time to time. And I would say some of our markets colleagues are here. We issued 30-year bonds in Europe this year, twice. European investors, global investors in European currency, Euro, are investing in Ontario for 30 years. They’re looking at the long game. And why do they do that? They look at Ontario and Canada as a sea of stability. Our brand is incredibly strong around the world. And the rule of law, the stability, the opportunity, the talent that we have, the culture that I talked about, welcoming people from all over the world is really what differentiates Canada, I think, and makes us one of the great, the greatest country in the world. And I say that, yeah, there—I say that with great humility, because it’s not so much what’s happening to us with regard our trade negotiations. We’ll get through it. We’ll land a good deal. We fully support the federal government in that regard. We’ve got some great people. Dominic Leblanc, Janice Charette, big fan of hers, and Mark Weissman, as well. We’ve got a great team. We’re gonna support them.
But I say focus on the things you can focus on in your own backyard. So, you will probably get into it. But I mentioned alcohol. It’s a little thing, being able to buy Nova Scotia wines, or buy from the great wine growers here in Ontario, if you live in Nova Scotia. Why not let them to trade freely? The IMF said it was a 9% tariff rate between provinces, the equivalent of 9%. With the US, it’s 5.6%. Let’s do what we can control in our own house. Let’s break down those barriers. Let’s innovate. Let’s compete. Let’s open up our markets. That’s something we can do without even having one mention of the United States.
David Herle
Okay. Just to be a dog with a bone for a second, though. I do…
The Hon. Peter Bethlenfalvy
That’s what I often think of you as, a dog.
David Herle
…I do have the impression that, basically, ever since 1990, the pitch to investors to Ontario has been come here. We have a stable society with the rule of law that’s a lovely place to live. We have a highly educated and diverse workforce. And we have tariff-free access to the United States, right? So if you take that third leg away, what replaces it? Why will investors still see Ontario as an attractive place to come?
The Hon. Peter Bethlenfalvy
Why do they think it’s an attractive place to come? Just look at the investments that are coming. They see, they wanna grow. They’re not doing—they have interests. They see opportunity. We see our population grow by two million since we came in in 2018. We’re gonna continue to welcome people. Markets are growing. We’re very focused on being more productive. We founded AI in Toronto, and in Ontario, and in Canada. We have a leadership role to play there, but we’re letting it fritter away. I think to some degree, maybe we’re a little complacent over the last couple of decades. My wish—and I think we’ll have more to say about this—is that we can support that great, for example, research that comes out of our universities, and the talent and the entrepreneurs that create, through creating intellectual property. Once they get a marketable product, you know, US investors come in, and they sweep in with a big check, and the next thing you know, the IP goes south of the border. The talent goes with it. They introduce them to all their global clients. We should be doing that right here in Ontario. We need to support those academic research institutions, the entrepreneurs who take those ideas and try to commercialize it, and scale it up right here in Ontario.
So, I think the world is changing. I think it’s really fundamental that we just don’t talk about—we’ve been talking about that for 20 years, that we should take advantage of that research here. AI is a great example. Another would be Ring of Fire. Now, you would remember, probably, a couple decades ago talking about Ring of Fire.
David Herle
I would love to—is there a road?
The Hon. Peter Bethlenfalvy
The road?
David Herle
Please, just tell me there’s a road.
The Hon. Peter Bethlenfalvy
The road? The road is….
David Herle
All I ask for is a road. We promised it so many times. Anyway….
The Hon. Peter Bethlenfalvy
Your wish is my command.
David Herle
Thank you.
The Hon. Peter Bethlenfalvy
We are putting shovels in the ground. Just last week, Premier Ford and our colleagues….
David Herle
Not much to ask for, a road.
The Hon. Peter Bethlenfalvy
And they just announced that the shovels are going in the ground, accelerated by five years, starting this spring. So, spring’s right around the corner. Time for talk is over. Time for action is now.
David Herle
Okay. So, there was a lengthy period of time, I would say the ’80s right through the early 2000s, where neoliberalism was the thinking of the day, and industrial strategy was a very, very bad word, and government’s job was to get the fundamentals right, and let business do its thing. Laterally, in the last couple of years, it seems like industrial strategy’s back, and it certainly seems like the federal government is pursuing one. And when I hear you talk, it certainly sounds to me like you think government has some active role to play. What is the role of government in today’s economy?
The Hon. Peter Bethlenfalvy
You know, I love working with Caroline Mulroney. One of the reasons is because I was such a big fan of Brian Mulroney. You know, he was the one that had the leadership and the vision to put the free trade agreement together, along with my political mentor, Michael Wilson. And folks, I’m old enough to have worked on those campaigns, worked on those elections. You probably did too, David. And not only did I support free trade, to your point, but there was a lot of privatization of government assets. Fast forward 40 years, and as you say, here I’m a champion of, you know, using government balance sheet to kind of crowd in investors and invest in Canadian companies, use our advantages here to kind of protect our interests by buying Ontario, by buying Canada, which goes against, really, what got me into politics all those years ago. But here’s the thing, as the prime minister said, you know, it’s not the world we wish for. It’s the world that we’re in.
So, that’s how I think we just have to be pragmatic, and we have to trade with each other, interprovincial trade. We have to get permits done faster. We just announced a whole bunch of One Permit, One Process, Canada Nickel, Frontier Lithium. I think Kinross, with the gold mine. Used to be 15 years to get a shovel in the ground. I think the world has changed, David. And so, we have to adapt to that world right now.
David Herle
Right. You mentioned Carney, so I just want to take a slight diversion. This is a fun parlour trick. I don’t want you to throw anybody under the bus, but what’s the difference in dealing with the Carney government from the Trudeau government?
The Hon. Peter Bethlenfalvy
The wheels on the bus go ‘round. You know, I’ve known the prime minister for a long time, and he’s a serious person. And I think he’s focused on our economic prosperity. He’s focused on the types of things, working together. I’ve often said here on this stage—this is my seventh time to the Empire Club. Thank you. Yeah, thank you. And I’ve often said in those speeches, David, you know, I sometimes feel the province feels we’re in a rowboat. We’re rowing one way, and the federal government, the previous one, was rowing in a different direction. I feel now we’re rowing in the same direction. You have a much better shot, even if the waters are choppy, of getting to where you’re going, if you’re rowing in the same direction.
And I don’t just mean the federal government. I mean First Nations, municipal governments, provincial governments, regional governments. Got my good friend Kevin Ashe is here, the mayor of Pickering. He’s also a regional councillor. You know, working together, boy, you can get so much more done. And I really feel that’s a big change from the previous regime.
David Herle
Okay, cool. Now, I do want you to throw somebody under the bus. And that is on this whole free trade within Canada thing. Right? And this feels like a broken promise to me. Certainly, on behalf of the prime minister, but maybe on behalf of all the governments, because we were promised this last summer, that there would be free trade in Canada by last summer. And it feels to me like if we can’t do that thing in the face of the Trump threat, I don’t really have a ton of confidence in our ability to go to the mattresses with these people. So, who’s responsible for the problem here? Like, why can’t we get this done?
The Hon. Peter Bethlenfalvy
Well, we are getting it done. You know, and I’ll give you an example. You know, their Canadian Free Trade Agreement that was signed in 2017, it’s about this big. The exemptions were piled this high. So Ontario said, we passed legislation and said, we are gonna get rid of every single exemption. So, that takes some courage to just say, nope, you know, they’re gone, they’re done. Other provinces have to participate. So, we use our leadership and our path to say, we’re doing it, why don’t you do it? Look at Nova Scotia, they’re a great partner. They’re doing the same thing, they’re leading. Stay tuned, there’s a lot more that we’re gonna be announcing. Labour, the mutual recognition of credentials, that’s being worked through. You know, as the premier says, we gotta go faster, quicker, and immediate. We certainly, in Ontario, we can’t force everyone across the country to do that, but we can certainly set the tone.
David Herle
Yeah, you’re a leader at that table.
The Hon. Peter Bethlenfalvy
And a leader at that table says, we’re gonna get rid of everything. You know, we will recognize your credentials from BC to PEI. You can come work here, and get that recognition. We’re gonna, the standards, instead of having to change the tires at the border in a truck, we’re gonna say, your tires are okay. We’re gonna say, if you wanna sell your Nova Scotia wines directly to Ontario consumers, you can do that. So, we are doing it. It’s happening. Would we like to go faster, quicker, immediate? Absolutely, but Ontario’s definitely there, and the rest of the country’s following.
David Herle
All right. You mentioned in your remarks the importance of fiscal responsibility and fiscal guardrails. But you also mentioned that jurisdictions in Canada are producing astonishing deficit numbers, including at the federal level, but other provinces, as well. And then around the world. If you look at the United States, if you look at Europe, there doesn’t seem to be nearly the focus on balanced budgets and fiscal management that there was even a few years ago. It really seems like the lid’s been blown off this. And I’m wondering, given your background in the rating business, even before you got into this, is the way the world is looking at government financing and deficits different than it was 10 years ago?
The Hon. Peter Bethlenfalvy
Oh, very much so. It concerns me. I mean, you know, math will catch up with every country, if you’re not watching your balance sheet, your deficits. Look at the US right now. Their deficit is 5.8% of GDP. I mean, you know, that is an unsustainable number. If you look at, in Canada, you’re right. BC just did a deficit over 13 billion. I mean, we’re three times the size of BC, so that means our deficit should be how big, David?
David Herle
Forty.
The Hon. Peter Bethlenfalvy
Forty billion. It’s not gonna be 40 billion.
David Herle
There’s your news. Ontario deficit less than 40 billion.
The Hon. Peter Bethlenfalvy
Breaking news, breaking news. I sure hope not. I think it matters. I think it really matters. So, what is our two credit rating upgrades? You name me a jurisdiction that has, in the last little while, got credit rating upgrades. You’d be hard-pressed. BC’s been downgraded to the provinces. Every single province, numerous have.
David Herle
Agencies are not killing these governments either. They’re not upgrading them, but they’re not saying, “Hey, you know, BC’s a junk bond now.”
The Hon. Peter Bethlenfalvy
No, but it builds over time, and you gotta be careful, and it impacts your borrowing costs. So, I mentioned the 30-year Euro Ontario bond that we’ve done. We have the tightest borrowing costs for those capital markets people and the folks. Our spread to treasuries is the lowest of any province in Canada for 30 years. What does that mean? That means we’re paying less to bondholders. What does that mean? We have more, you know, I think our Q3 was about six cents on the dollar. You remember, you know, when it was 30, 33 cents, 35 cents. It catches up to you. You know, you’ve gotta be careful. And markets, if they feel that you’ve gone too far, they will punish you. And we saw in the UK a couple years back, when their budget was incredible, and investors ran away from the UK. It cost the Prime Minister and the Finance Minister their jobs. So, you ignore it at your peril.
David Herle
Right. Feels to me like one of the toughest things in government to do right now is the affordability crisis that people are feeling at home. I mean, governments of Canada are all rightfully seized with the external challenges and the structural changes that need to have happen. But it also does appear that this K-shaped recovery is a real thing, and that there are a lot more people than used to be the case that are really having a tough go of affording the basics of life. We are, my own polling is showing a dramatic increase in the number of people that consider themselves food insecure, for example. So, what are the tools you have?
The Hon. Peter Bethlenfalvy
Well, this is why it’s really important to be fiscally responsible. You know, a finance minister has one hand on his or her wallet, but also has a hand on his or her heart. I think it’s very important that we take care of the most vulnerable in society. That’s why, for example, we indexed Ontario disability support payments to inflation. First time in any government has ever done that in Ontario. For low income seniors, we not only expanded the amount of people that can qualify for the guaranteed annual income system supplement for low income seniors, but we indexed that to inflation, as well. Because that’s the right thing to do. When you’re fiscally responsible, you can do that.
I’m very glad that we, very early on, cut gas tax, so that we put money more in people’s pockets and businesses, as they go about their day-to-day lives and their jobs. And I think the other thing is that the best antidote, ultimately, for society is to make sure that we lay the conditions in place for a growing economy, a productive economy. And that’s why we’ve also lowered taxes, more taxes. You know, the three budgets that have come out so far, BC, Alberta, and Nova Scotia, what do they have in common?
David Herle
Raised taxes.
The Hon. Peter Bethlenfalvy
Yeah, all three of them raised taxes. That doesn’t help consumers, individuals, it doesn’t help…
David Herle
Is that a test?
The Hon. Peter Bethlenfalvy
…it doesn’t help.
David Herle
Is it a test? Was that a test?
The Hon. Peter Bethlenfalvy
Yes. You’re always being tested, you know. Yeah, but you answered it right. And two of them announced public service cuts, 15,000 public service cuts. I don’t think you can cut your way to prosperity. I’ve never felt that way. You gotta be a steward of the taxpayer’s money, and you gotta put the conditions in place for economic growth and productivity. My speech had a lot to do with putting in the conditions to really give workers the tools to support our education system, the retraining and reskilling of our workers, the tax rates lower so capital and risk takers can invest in this province that go along with all the other things you mentioned earlier about stability, and rule of law, and all the things that, you know, people here in Canada appreciate, but around the world really treasure about Canada.
David Herle
When I was listening to you talk about how you can’t get to prosperity by slashing the public service, I was thinking about how happy I am that you didn’t run the 2014 PC campaign in Ontario. The—that’s an inside joke for people.
The Hon. Peter Bethlenfalvy
You couldn’t help yourself.
David Herle
No, I couldn’t help myself. But….
The Hon. Peter Bethlenfalvy
You don’t wanna talk about 2018, do you?
David Herle
You know, I spend a lot of time talking about 2018—most of it to myself late at night, over rum.
The Hon. Peter Bethlenfalvy
You win some, you lose some.
David Herle
I do wanna talk about productivity and innovation, which was your lead item for your priorities for the budget. And it has been identified as a problem in Canada for a long time. It’s a bit of a mystery, it seems to me in some circles, why productivity in Canada trails that of other jurisdictions. People have different theories about branch plants, or all kinds of different things. But essentially, what do you think is the key to unlocking? I mean, even Carney talked about dead money on Canadian balance sheets years ago. What is the key to unlocking investment in the Canadian business?
The Hon. Peter Bethlenfalvy
Here’s the key to unlocking productivity. There is no one key.
David Herle
Okay.
The Hon. Peter Bethlenfalvy
There’s multiple keys. And I’ve been thinking about this and working on both Wall Street and Bay Street for my whole career. And it’s a whole series of things. It’s making sure our tax rates are low and competitive. It’s making sure our regulatory environment is such that we can get the yes or no much quicker. We limit the paperwork. Permitting, faster permitting. It’s about making sure we have investments in talent, and not just earlier on. Like, we’re investing so much, we’ve gone to a high school—you probably have kids in high school. I’ve gone through a lot of the shop classes. You’d be blown away what’s happening in our shop classes to train welders, to train millwrights, to train crane operators, or using simulators. And by the way, we’ve got a massive aging population. You and I are in that cohort, of the Baby Boom that are gonna be retiring very soon. So, we’ve gotta keep investing in talent is a big thing.
Population growth is flattened right now. So, how do you encourage, to make sure that we are the best equipped people? There’s gonna be more jobs than people. So, the productivity has to raise. So, it’s not just one thing. I think government can play a role, though, in encouraging innovation, competition. We’re doing that in a lot of industries. We’re encouraging that. And I think that that’s part of the solution, but there’s no one key.
David Herle
There are some elements of the business community that are really pushing hard for a significant reduction in corporate taxes. What do you think about that?
The Hon. Peter Bethlenfalvy
I think whenever you put more money back in people’s pockets, we’ve cut personal income taxes for the lowest income tax bracket, the lowest in Canada, right here in Ontario. We’ve cut manufacturing tax. We’ve cut small business tax. We’ve cut manufacturing tax. We’ve cut gas tax. We’ve cut HST. Do you want me to keep going? We’ve cut HST tax. I mean, there’s so many. We just believe, fundamentally, that if we put it in your pocket, you’ll spend it wisely. We put it in businesses’ pockets. They’re gonna reinvest in their people, in their technology, in their plant, in their future. And government, we gotta be competitive. And so, that’s the way I view taxes. They should be coming wherever possible. And again, that’s why it’s so important to be fiscally responsible. You can’t cut taxes if you’ve got massive deficits, if you have no path to balance. If you can’t get credit rating upgrades, it really makes it challenging to cut taxes, to compete that way. And that’s why three of the three budgets that have come out so far have raised taxes.
QUESTIONS & ANSWERS
David Herle
Right, right. All right, I think I should ask you a question from the floor. Otherwise, I won’t have done my job well. So, you recently provided multi-year funding to post-secondary institutes. There’s a benefit to that multi-year funding certainty. Are you considering something similar for other public sector institutions?
The Hon. Peter Bethlenfalvy
Well, we certainly felt it was very important to support our colleges and universities. I think we’ve done it the right way, in the sense that without a sustainable college and universities, students won’t have a college or university to go to. So, that was paramount. And don’t forget, some of the changes at the federal level impact how many international students, and that’s changed. So, we have to adapt to the world we’re in. Yeah, I think that we’re gonna continue to look at ways that we can make funding sustainable, continue our track record of putting in investments into areas like healthcare, like education, like post-secondary education.
David Herle
Okay. Maybe I’ll close on healthcare, because you mentioned it. And you’ve just, you know, I know how much of your budget it sucks up. And I know that you’ve, you know, brought in Jane Philpott to try to figure this out. But to be honest, people still have the same complaints about healthcare that they had 5, 10 years ago. Hallway medicine, tough situation in ERs, difficult to get a personal physician, et cetera. Why is this public policy problem so difficult?
The Hon. Peter Bethlenfalvy
It’s been around forever. It’s nothing new. And you know, but that doesn’t mean that we don’t continue to strive investing more, investing wisely, supporting the sector. There’s a bit of self-interest in there, we’re getting older. Our mandate is to take care of everybody, regardless of background. That’s our, the social compact we have in Canada. I will say this. First thing I would say is that we have an incredible healthcare system, and it’s in part largely due to the great healthcare workers we have. If you’ve ever met—yeah. I’m sure we’ve all had interactions with our healthcare system. You see the compassion and the work ethic and the empathy from a nurse, from a personal support worker, to a family doctor, to a specialist, incredible human beings. And we’re gonna continue to support them in every way we can.
The second thing is, as the finance minister, we’ve increased the funding to historic proportions. When we took over, it was about $60 billion. Now, it’s a little over $90 billion. So, that’s a 50% increase in funding. That’s a 50% increase over seven years. That’s a huge increase. And we’re gonna continue doing that in strategic areas like you mentioned, primary care. We’re actually leading the country in attachments to a family doctor at 88%, along with Manitoba. But don’t tell that to the 12% of people who can’t get a family doctor.
David Herle
Right.
The Hon. Peter Bethlenfalvy
That’s why you mentioned Jane Philpott. We put in $2 billion on a plan to attach every single Ontarian to a family doctor. We’ve put out two applications for family health teams. That’s increased it by 800,000 people. So, we’re well on our way. Home care. Who doesn’t wanna age at home? I know just about everyone I meet, if we can bring the system and transform it to coming to take care of you at home, that’s part of the strategy going forward. And I often say the answer from our critics is often, or the criticism is, well, minister, just throw more money at it. Folks, that isn’t the only answer. The answer has to be you have to provide solutions and ideas, transform your health care system, think outside the box. So, I’m challenging every health care, the system administrators to come up with ideas so that more money can go to our frontline health care workers and more money than is supporting the patients that we take care of across Ontario.
David Herle
Terrific. Minister, thank you for….
The Hon. Peter Bethlenfalvy
Oh, I have one more thing.
David Herle
Oh yeah, what’s that?
The Hon. Peter Bethlenfalvy
Yeah, they asked me, is there anything, do you think he’s gonna ask you about the Building Ontario Fund? Do you know what the Building Ontario Fund is?
David Herle
Not enough.
The Hon. Peter Bethlenfalvy
Okay. Good answer. You’re a pro. And first off, I wanna thank you, David, for doing this. You do a remarkable job. You’re just a little bit ideologically misguided, but other than that…
David Herle
I’m working on it.
The Hon. Peter Bethlenfalvy
…you’re really a good guy. And you do a great job on your podcasts. And anyone who hasn’t listened to the Herle Burley or the Curse of Politics, I highly encourage you to, because they talk about issues that matter to all Canadians, regardless of stripe. I did wanna mention the Building Ontario Fund, because it’s something we thought outside the box a couple of years ago to set up what our version of an infrastructure bank was. And about 15 months ago, we set it up. And so far, we’ve done transactions. It’s our bank that will allow us to do more infrastructure investments that otherwise wouldn’t get done without the help of government. And they’re kinda like the Canadian Infrastructure Bank, but better. And so far, we’ve done the Small Modular Reactor. It’s a billion dollars to the Building Ontario Fund. The federal government put in two billion. So, that’s one trend. We built the Rekai Centre. Peter Rekai, 13 years trying to get financing to build a long-term care facility down by the Distillery District. The Building Ontario Fund provided funding that allowed that to get the financing necessary to build almost 300 long-term care beds. Toronto Metropolitan University trying to get student housing. The Building Ontario Fund showed up and helped them get a deal past the finish line for 1,400 new student residences. There’s someone from the TMU—you’re looking for a room, I know a guy. That’s more than double what they have. So, that helps.
And I’ll just end, there’s another transaction that we’re gonna announce really soon that’s gonna help move our province forward, get more built faster than otherwise would. So that’s some of the things we’re thinking outside the box to build Ontario, to grow our economy, to get our workers the best opportunities possible, and really be able to then afford our world-class healthcare, education system, social services.
David Herle
Well, Minister, between COVID and Trump, I think this job has been probably a lot different than you thought it would be when you got into it. But you’re very safe hands. Thank you for doing it. Thank you for being there.
The Hon. Peter Bethlenfalvy
Appreciate it. Thank you, David. Great job. Thank you so much.
Saurabh Popat
Thank you so much, Minister, for your remarks, and to David for guiding such a thoughtful and timely conversation with your usual wit and humor. We all look forward to the finer details of the budget on March 26th. Please join me again, in thanking both of them.
Now, before we close, I’d like to recognize our Lead Sponsor for our closing remarks. Enbridge plays a vital role in powering homes, businesses, and communities across North America. Energy is front and center in public policy right now. Affordability, reliability, sustainability, and security are part of the everyday conversation in boardrooms, legislatures, and around the kitchen tables. As our province works to drive growth while keeping energy dependable and responsible, companies that build and operate critical infrastructure are central to making that balance possible. It’s now my pleasure to invite Michelle George, Senior Vice President, Chief Transition Officer at Enbridge, Inc. to offer closing remarks. Michelle.
Note of Appreciation by Michelle George, Senior Vice President, Chief Transition Officer, Enbridge, Inc.
Thanks very much. I learned from you, David, and brought my iPad, so the lighting is here, so I have my remarks. So, thanks very much. On behalf of Enbridge, thank you so much to the Empire Club of Canada for hosting yet another thoughtful and timely conversation. Minister Bethlenfalvy, thank you for your remarks, and for sharing your perspective on innovation and productivity, on stability and competitiveness, and also, of course, on energy and infrastructure as Ontario prepares for the 2026 budget. And David, thanks again for guiding such a substantive and engaging discussion as always.
For more than 175 years, Enbridge’s gas distribution routes have been part of Ontario’s story. Every day, we help keep homes warm, support manufacturers, power farms and greenhouses, and enable the movement of people and goods across North America. As Ontario works to protect its economic strength amid global uncertainty, the focus on building, unlocking growth, cutting red tape, and getting shovels in the ground has never been more important. Conversations like today’s help all of us think critically about how to strengthen the province’s resilience, and ensure Ontario remains one of the most competitive places in the world to invest, create jobs, and do business. That’s why Enbridge is proud to sponsor today’s event. We remain committed to working with government, industry, and communities, to support economic growth, keep energy affordable and reliable, and contribute to the long-term prosperity of Ontario’s families and businesses. Thank you all for being part of an important conversation for Ontario’s future.
Concluding Remarks by Saurabh Popat
Thank you again to our panellists, sponsors, and of course to all of you for joining us here today. I’d also like to take a moment to recognize the students and young leaders joining us. Their presence is made possible through our charitable arm, the Empire Club Foundation, and the generosity of our donors. This support enables us to invite future leaders to take part in today’s dialogue and to empower them to turn knowledge into leadership that shines in communities, boardrooms, legislatures, and national conversations shaping Canada’s future. Thank you.
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I also hope that you’ll join us for two upcoming and exciting events. On March 27th, we welcome the Honourable Steve McKinnon, Canada’s Transport Minister, for “Connecting Canada, the Trade Infrastructure Strategy to Power Canada’s Economic Future.” He will outline how Canada plans to modernize trade corridors, strengthen ports, rail, and aviation, and ensure that we can move goods, talent, and ideas at the speed that global partners now expect.
And on April 24th, we host the Honourable Tim Hodgson, Minister of Energy and Natural Resources, for “One Year of Nation Building, Looking Back and Moving Forward.” One year into a new federal mandate, Minister Hodgson will speak to major projects, energy security, critical minerals, and how Canada can build with confidence in a more volatile global environment. Tickets for both events are now on sale.
And as always, as a club of record, all Empire Clubs events are available to watch and listen to on our website. And the recording of today’s event will be available very shortly. Thank you all for being a part of this important conversation. This meeting is now adjourned.
