08:02 AM EST, 02/28/2025 (MT Newswires) -- Canada's province of Alberta is on target to achieve a notably larger surplus than initially expected in fiscal 2024/25 at C$5.8 billion, as higher resource revenue more than offset greater spending on operating expenses, said CIBC.

However, for fiscal 2025/26, the province will return to red ink, running a deficit for the first time since 2020/21, with the C$5.2 billion shortfall amounting to 1% of the gross domestic product, noted the bank.

That reflects a C$1.2 billion tax cut that will dent revenues, along with a doubling of the contingency fund in the face of United States tariff threats and dim growth prospects due to tariff assumptions.

Total borrowing is projected to be C$11.4 billion, which is essentially unchanged from the outgoing year. However, the composition is altering as long-term borrowing is estimated to decrease to C$9.1 billion from C$11.3 billion, while short-term debt is increasing by C$2.3 billion.

Over the time horizon, total borrowing requirements are increasing in each subsequent year, reaching C$13.9 billion in 2026/27 and C$20.8 billion in 2027/28.