Ontario 2026 Budget Update from EFC

April 20, 2026

Ontario’s 2026 Budget, “A Plan to Protect Ontario,” introduces several measures of direct relevance to the electrical and automation industry, with a strong emphasis on business tax competitiveness, capital investment, and energy infrastructure expansion. 

Business tax relief and investment incentives 

The budget reduces the small business corporate income tax rate from 3.2% to 2.2% effective July 1, 2026, providing approximately $1.1 billion in tax relief to over 375,000 businesses.  

In parallel, Ontario is introducing accelerated capital cost allowances, including immediate write-offs for investments in machinery, equipment, manufacturing assets, and clean technologies, amounting to more than $3.5 billion in tax relief over four years. 

Strategic investments  

The province is committing $4 billion to the Protect Ontario Account Investment Fund to attract private capital into priority sectors such as advanced manufacturing, artificial intelligence, and critical minerals. 

Investing an additional $107 million over three years, starting in 2026–27, to renew support for the Critical Technologies Initiatives program. The funding will help accelerate the development, commercialization and adoption of critical technologies in key sectors, such as advanced manufacturing, automotive, life sciences, mining, defence, agriculture, and smart infrastructure. These technologies will help create new opportunities for businesses and increase productivity and boost Ontario’s innovation ecosystem and AI infrastructure. 

Infrastructure spending and procurement opportunities 

The budget maintains a strong pipeline of public infrastructure investment, including transportation, community infrastructure, and housing-related construction. 

Support for trade-impacted communities and supply chains 

The province continues to respond to the impacts of U.S. tariffs and global economic uncertainty by assisting local industries get the support they need to navigate these economic challenges through the Trade-Impacted Communities Program. The $40 million program supports local projects that promote economic resiliency, increase export and investment opportunities, as well as bolster Ontario’s strategic priority sectors and their supply chains 

Implications for EFC members

For the electrical and automation sector, the 2026 Budget signals: 

• Increased demand driven by infrastructure and construction activity;
• Stronger incentives for capital investment; and
• Continued trade and tariff support.  

Sussex has prepared a summary of key budget highlights for EFC members, including notable investments in energy. Read their full report here

For the full Ontario Budget: https://budget.ontario.ca/2026/index.html

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