Ontario Budget 2025: What Financial Industry Leaders Need to Know

The Ontario government’s 2025 Budget signals a continued push for modernization and consumer protection in the province’s financial sector. With policy initiatives spanning insurance reform, credit union competitiveness, fintech experimentation, and venture capital acceleration, the budget positions Ontario as a more adaptive, innovation-friendly economy. But what does it really mean for financial institutions and their stakeholders?

New Licensing Rules for Managing General Agents (MGAs)

To enhance oversight in the life and health insurance market, the province is creating a licensing framework under the Insurance Act for managing general agents (MGAs) in life, accident, and sickness insurance. The move is framed as a consumer protection measure. FSRA is currently consulting on the supporting rule, with implementation expected by June 1, 2026.

Credit Unions May Soon Raise Capital from Non-Members

Ontario will launch consultations on letting credit unions and caisses populaires raise capital from outside their membership base—specifically through the sale of investment shares to non-members. The goal is to give co-operative financial institutions access to public and private capital markets and unlock new, long-term funding channels. The province will work with regulators and stakeholders to ensure smooth execution.

Auto Insurance Reform: More Choice, New Channels

Effective July 1, 2026, statutory accident benefits—excluding medical, rehabilitation, and attendant care—will become optional for consumers. In addition, auto insurance will be required to pay out for crash injuries before extended health care plans, altering claims sequencing and coverage dynamics.

Separately, Ontario has greenlit a pilot program under FSRA’s Test and Learn Environment (TLE) to sell insurance at the point of vehicle purchase—i.e., directly at dealerships. The goal: more consumer convenience and a boost in distribution competition. FSRA will manage scope and safeguards.

$90M Injection into Venture Ontario to Target Strategic Sectors

Ontario is investing an additional $90 million through Venture Ontario to stimulate the VC ecosystem:

• 👉 $50 million to VC funds backing national defence-aligned tech—including AI and cybersecurity
• 👉 $40 million to support life sciences and biomanufacturing scale-ups

The province now manages over $500 million in VC assets, and this new funding is intended to support early-to-late stage firms, strengthen domestic supply chains, and cushion against U.S. tariffs by bolstering economic resiliency in key sectors.

Capital Formation and Investment Access Reforms

The Ontario Securities Commission (OSC), in collaboration with CIRO, is advancing reforms to improve capital access for businesses:

• 👉 New IPO rules will reduce the requirement for audited financials from three to two years
• 👉 Eases capital raising for newly listed issuers in their first 12 months post-IPO
• 👉 Updates to the Offering Memorandum Prospectus Exemption will allow proceeds from certain investment dispositions to be reinvested over current limits

New Ontario Together Trade Fund (OTTF)

Ontario will invest $50 million over 3 years to support SMEs facing U.S. tariffs. Funds will be used to re-shore critical supply chains and develop interprovincial trade infrastructure—potentially opening new lending markets and risk considerations for financial institutions.

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