07:21 AM EDT, 10/31/2024 (MT Newswires) -- The Canadian province of Ontario is projecting a C$6.6 billion deficit for FY24/25 or roughly 0.6% of gross domestic product, notably smaller than the C$9.8 billion shortfall estimated in the initial budget plan, noted Bank of Montreal (BMO).

Considering that the mid-year fiscal update came with a strong dose of new spending measures -- including those C$200 rebate checks -- it speaks to the large improvement in the underlying fiscal situation -- on the back of both higher

revenues and lower interest costs, said the bank.

The improvement also carries through the forecast horizon,

with the deficit shrinking to C$1.5 billion in FY25/26 -- previously at C$4.6 billion -- and then settling into a C$895 million surplus by FY26/27 --previously at C$500 million.

Combining a better-than-expected finish to FY23/24, and this improved outlook, the cumulative bottom line over the four-year period (FY23/24 through FY26/27) has improved by a "hefty" C$9 billion, stated BMO.

Ontario has gone from a tough news fiscal story to one of the

good news fiscal stories, pointed out the bank. It recalled when the province projected a near-C$40 billion shortfall in Budget 2021.

Now BMO would deem it as a favorable credit on the provincial landscape in Canada.