06:41 AM EST, 03/05/2025 (MT Newswires) -- The Canadian province of British Columbia is expecting wider deficits ahead, peaking at C$10.9 billion, or around 2.5% of gross domestic product, in the upcoming fiscal 2025/26, noted CIBC.

That reflects a combination of increased spending and a pullback in corporation tax receipts following a larger-than-expected take in 2024/25, said the bank.

Longer-term forecasts project slower spending growth, but the budget deficit narrows only slightly due to an expected pick-up in debt service expense, stated CIBC.

While the province should be among the least exposed to United States trade tariffs, there would still be downside pressure on the base case GDP forecasts should tariffs persist, pointed out the bank.

With capital spending expected to increase as well as the operating deficit, gross borrowing is expected to rise to C$31.1 billion in fiscal 2025/26, from C$29.2 billion. Debt as a percentage of GDP is forecast to rise from 22.9% at the end of the current fiscal year to 34.4% by fiscal 2027/28.