Ontario overtakes Quebec on corporate welfare spending, finds the MEI

Montreal, September 25, 2025 – Once the undisputed champion of corporate welfare, Quebec is now outspent by Ontario, according to a new MEI study published this morning.

“High corporate taxes counterbalanced by high spending on subsidies has long been Quebec’s strategy for developing its economy, with lots of ribbon-cutting, but little in terms of actual results to show for it,” says Samantha Dagres, communications manager at the MEI and author of the report. “Unfortunately, this seems to have caught the eye of Ontario’s politicians, who are now outspending Quebec on corporate subsidies.”

Up until 2017, Quebec led all provinces in terms of the total amount spent on business subsidies.

In 2013, the Quebec government doled out $4.3 billion in corporate welfare, far outpacing Ontario’s $2.9 billion.

But in 2017–2018, business support in Ontario shot up by nearly 90 per cent. While Quebec spent $4.8 billion that fiscal year, Ontario spent $6.4 billion.

Since 2017, subsidies have grown by 182 per cent in Ontario, compared to 70 per cent growth in Quebec.

According to the latest available data, Quebec now distributes $7.8 billion in corporate welfare per year, whereas Ontario distributes $9.5 billion.

This surge began under Kathleen Wynne’s Liberal government, despite a 2015 auditor general’s report warning there was no clear evidence that subsidies created or retained jobs, and it has continued under Doug Ford’s Progressive Conservatives.

High-profile examples include subsidies to the auto sector. In 2022, Ontario announced $259 million for General Motors to help upgrade its facilities. Then in 2023, it pledged $5.4 billion in production support to Stellantis-LGES for an electric vehicle battery plant in Windsor.

Last year, the province pledged $2.5 billion in assistance to Honda to support its electric vehicle and battery plants.

“Economic growth has been abysmal despite years of government largesse,” adds Ms. Dagres. “Attracting firms reliant on subsidies is unsustainable; a competitive business environment is the real solution.”

The Ontario government currently taxes businesses at a rate of 11.5 per cent. Combined with the federal rate of 15 per cent, this brings the total corporate tax rate to 26.5 per cent, one of the highest in North America.

The MEI report shows that eliminating corporate subsidies would free up sufficient funds to allow the government to reduce the provincial corporate tax rate by 4.5 percentage points, from 11.5 per cent to 7 per cent, without impacting revenues.

Combined with the federal rate, this would give Ontario a total corporate tax rate of 22 per cent, lower than the effective corporate tax rate in all other Canadian provinces and nearly equivalent to the minimum U.S. rate of 21 per cent.

“Eliminating subsidies would allow Ontario to permanently lower taxes,” says Ms. Dagres. “Instead of being a leader in corporate welfare, Ontario could become one of the most attractive places to do business on the continent, and the most attractive in Canada.”

The MEI Viewpoint is available here.

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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