07:23 AM EDT, 05/14/2025 (MT Newswires) -- Ontario's budget on Thursday will be the last of the 2025

season among Canadian provinces, noted Bank of Montreal (BMO).

Given a softer economic outlook and trade-war-related support/stimulus promises, look for a wider deficit -- it was last pegged at just $1.5 billion for FY25/26 -- and a longer path back to balance, said the bank.

Provincial deficits are widening broadly this fiscal year amid softer revenue growth and ongoing spending pressure, pointed out BMO. Provinces remain very active borrowers as well, with the current year tracking around $130 billion --Ontario details pending.

In addition to deficits projected across nine of 10 provinces, the group is also borrowing to fund robust capital/infrastructure outlays, stated the bank. It remains to be seen if big plans on that front in the federal Liberal Party platform get downloaded to the provinces at all and take some incremental pressure off borrowing.

As it stands, provincial spreads are still "well behaved," with the recent move back into riskier assets pulling long spreads versus government of Canada bonds down well within the range seen over the past three years, aded BMO.