A $35 billion borrowing authority and a revised pension guarantee cap are also in the mix
Ontario's budget bill creates pension benefits tied to investment returns, adjusts dividend tax credits and unlocks $35 billion in new borrowing authority.
Bill 97, the Plan to Protect Ontario Act (Budget Measures), 2026, received Royal Assent on April 24, 2026, barely a month after its first reading on March 26. Introduced by Minister of Finance Peter Bethlenfalvy, the omnibus budget bill touches everything from conservation authorities to ticket scalping. But tucked inside its 17 schedules are a handful of provisions that stand to change the day-to-day work of financial advisors, pension consultants and portfolio managers across the province.
The headline for the wealth industry sits in Schedule 13, which amends the Pension Benefits Act. Ontario has now authorized a new category called "variable life benefits" under defined contribution pension plans. In plain terms, a specified person can transfer money from their DC account - or from additional voluntary contributions - into a variable life benefit fund. The payout they receive may then rise or fall based on several factors, including the investment returns of that fund. The bill also creates a death benefit tied to variable life benefits, payable to a designated beneficiary, and lays out rules for partial wind ups of plans that offer them.
For advisors who spend their days walking clients through decumulation strategies, this is new territory. Pension income in Ontario can now be directly linked to market performance inside a registered plan structure - a conversation that did not exist before this bill.
There is also a change to the Pension Benefits Guarantee Fund worth flagging. For any plan wind up on or after March 26, 2026, pension amounts above $3,000 - including bridging supplements - are no longer guaranteed by the Fund. That is a number advisors will want to have ready when clients ask about downside protection.
On the tax side, Schedule 15 amends the Taxation Act, 2007, in two ways that matter for portfolio planning. The Ontario dividend tax credit now includes 15.2283 per cent of the amount required under subparagraph 82(1)(b)(i) of the federal Income Tax Act for taxation years ending after December 31, 2026. And the small business deduction rate is set at 9.3 per cent for days in a taxation year after June 30, 2026. Anyone advising business owners on corporate structures or managing dividend-heavy portfolios will want to run the numbers again.
Then there is the money. Schedule 5 amends the Financial Administration Act to create something called the Protect Ontario Account Investment Fund - a designated account within the Consolidated Revenue Fund. The Minister of Finance can spend from it to back investments in innovation, infrastructure, long-term economic growth and other strategic priorities of Ontario. Returns flow back into the fund, though the minister can redirect portions to general revenue.
At the same time, the bill repeals provisions that previously set out requirements for transactions increasing Ontario's debt or contingent liabilities, while preserving rules for deals already in place before the change took effect. Separately, the Ontario Loan Act, 2026, under Schedule 12, gives the Crown authority to borrow up to $35 billion.
One more item for the file: Schedule 4 amends the Corporations Tax Act to let funded benefit plans elect to have their tax calculated as though they were unfunded. The minister can make regulations around how that tax is determined when an election is made or revoked - and those regulations can apply retroactively.
Bill 97 is a sprawling piece of legislation, and much of it falls outside the finance lane. But the pension, tax and fiscal provisions buried inside it carry real, practical weight for anyone managing money in Ontario. The details are worth reading before the next client call.
