06:06 AM EDT, 03/25/2026 (MT Newswires) -- The Canadian province of Manitoba is estimating a budget deficit of $1.7 billion, 1.7% gross domestic product, in the outgoing 2025/26 fiscal year, said CIBC.

While that is more than double last year's budget projections, the deterioration is largely linked to drought conditions that negatively impacted Manitoba Hydro and increased spending on fighting wildfires, noted the bank.

With those impacts expected to fade in the upcoming fiscal year, and with federal transfers increasing, Budget 2026 projects a $500 million deficit for the upcoming fiscal year. At 0.5% of nominal GDP, that shortfall would be the smallest among provincial budgets released so far, stated CIBC.

The smaller deficit, as well as pre-borrowing undertaken during the outgoing fiscal year, sees borrowing fall to $4.2 billion in 2026/27, down from $5.6 billion completed in 2025/26.