06:42 AM EDT, 04/10/2025 (MT Newswires) -- The Canadian province of Newfoundland & Labrador is projecting a $372 million deficit in FY25/26, or 0.9% of gross domestic product, worse than the $252 million shortfall now estimated for FY24/25, said Bank of Montreal (BMO).

The province is anticipating a surplus in FY26/27 and through the rest of the medium-term outlook, said the bank. Revenue and expenditures are expected to remain stable over the horizon, though the province builds in an oil risk adjustment that starts at $20 million in FY26/27 and rises to $75 million by FY29/30.

Total spending is projected to rise 5.1% in FY25/26, driven by higher spending on salaries and benefits and grants and subsidies.

Newfoundland & Labrador expects to borrow $4.1 billion in FY25/26, up from $2.8 billion in the previous year. Net debt rises to $19.5 billion by the end of FY24/25, almost $1 billion higher than last fiscal year. That leaves the net debt-to-GDP ratio at almost 45%, still the highest in the country, stated BMO.

Newfoundland & Labrador is projecting a "modest" deficit this fiscal year against a highly uncertain economic backdrop, pointed out the bank.