The Canadian province of New Brunswick is projecting a deeper $599 million deficit for FY25/26, in the first post-election budget for the new provincial government, noted Bank of Montreal (BMO).

That follows a $399 million deficit now expected for FY24/25, which has been revised down from a small $40 million surplus penciled into last year's budget plan, said the bank.

Ramped-up spending pulled the budget into the red last fiscal year and will continue to do so this year and in the years ahead, pointed out BMO.

In the medium term fiscal plan, New Brunswick will run gradually shrinking deficits in each year through FY28/29, when the deficit will sit at $144 million.

There were few major new policy announcements in this budget, according to the bank. Rather, the document focuses on pushing forward with spending priorities --health, education, affordable housing and affordable care -- outlined in the recent election campaign.

This fiscal outlook doesn't yet incorporate the impact of a trade war with the United States, added BMO.