06:52 AM EST, 02/27/2025 (MT Newswires) -- Trade policy uncertainty induced by the new United States administration complicates budget planning for Canadian provinces and is expected to reduce Canadian real gross domestic product growth from 1.7% to 1.2% in 2025, said Laurentian Bank Securities.

This poses "significant" challenges for provincial economies and budgetary balances, noted the bank.

Canadian provinces may need to issue up to C$133 billion in bonds in FY 2025-26 if blanket 25% of U.S. tariffs are imposed on Canada, stated Laurentian Bank. C$121 billion under a 10% tariffs scenario on half of Canadian exports and C$113 billion without blanket tariffs.

Canada is the largest mining supplier to the U.S. Several provincial governments have proactively launched a critical mineral strategy that could cushion Canada against sweeping U.S. tariffs, pointed out the bank.

-- Quebec: Investors and credit agencies are awaiting a credible plan in Budget 2025 to restore budgetary balance by FY 2029-30. U.S. trade policy uncertainty could delay this target, although Quebec's very diversified economy is a key pillar.

-- Ontario: Recent credit upgrades and a sound fiscal situation tied to slower growth in expenditures put Ontario in a better financial position to handle U.S. tariffs.

-- British Columbia: There are growing signs of fiscal restraint in Budget 2025 in response to U.S. trade policy uncertainty contrasting with outsized deficits and credit downgrades of 2023 and 2024.

-- Alberta: The Donald Trump administration's previous idea of relatively lower 10% tariffs on energy reveals the crucial importance of Canadian oil to the U.S., making Alberta less impacted compared with other provinces under a tariff shock scenario.

-- Saskatchewan would be less impacted by U.S. tariffs compared with most provinces, thanks to its diversity of export products and abundance of critical minerals.

-- Manitoba: The Manitoba government has launched a critical mineral strategy to expedite projects and partnerships with First Nations, on top of facing a large budget deficit and average exposure to U.S. tariffs.

-- Newfoundland & Labrador is potentially exposed to a lower effective tariff shock than most. The government preparing for an electoral budget will have to decide how to allocate the revenue windfall from the new Churchill Falls deal.

-- New Brunswick's small business confidence has been declining due to higher reliance on U.S. exports, while the new provincial Liberal government inherited a moderate deficit.

-- Nova Scotia's Budget 2025 released in mid-February contains significant tax relief and increased spending, resulting in a larger-than-usual deficit and a rising net debt-to-NGDP ratio.