06:48 AM EDT, 03/21/2025 (MT Newswires) -- Manitoba's NDP provincial government increases spending for health, education and capital projects without delaying the planned return to balance -- in part thanks to a mix of tax increases that will support strong revenue growth and reducing contingencies in outer years said Scotiabank.

While contingencies are prudently increased for FY26, they could be overwhelmed in a downside scenario, noted the bank. The government of the province in Canada estimates that if United States tariffs and counter-tariffs are increased and sustained, this would worsen the FY26 deficit by $1.1 billion compared with the baseline scenario.

The deficit is projected to shrink from $1,239 million, or 1.3% of nominal gross domestic product, in FY25, to $794 million (-0.8%) in FY26, $327 million (-0.3%) in FY27 and $10 million (0.0%) in FY28.

Net debt is seen increasing from 36.1% of nominal GDP in FY25 to 37.1% in FY27 then declining to 36.8% in FY28.

Real GDP is projected to grow 1.1% in 2024, picking up to 1.7% in both 2025 and 2026.

Borrowing requirements of $6.5 billion are forecast in FY25, with $5.9 billion in FY26, $4.1 billion in FY27, $5.5 billion in FY28 and $6.8 bn in FY29.