07:31 AM EDT, 04/11/2025 (MT Newswires) -- Prince Edward Island is projecting a budget deficit of $183.9 million for the 2025/26 fiscal year, which is roughly 1.7% of the current gross domestic product and wider than in fiscal 2024/25, said CIBC.

Weaker economic growth forecasts in the Canadian province, increases in spending, tax changes to help businesses and individuals and a $32 million tariff contingency all contributed to the higher deficit projection, noted the bank.

Over the medium term, deficits are expected to narrow but remain above 1% of current GDP, pointed out CIBC.

Higher capital spending, increased net borrowings on behalf of Crown Corporations, as well as a $125 million bond maturing this August, which will need to be refinanced, sees long-term borrowing increase to $800 million, up from $500 million, added the bank.