Trade War Forces Canada’s Provinces to Issue Flurry of New Bonds

The trade war is set to plunge Canadian provinces into deeper deficits, revitalizing a sleepy corner of the credit market.

Provinces are expecting wider deficits and higher funding needs, which means selling more bonds. The seven provinces that have proposed budgets so far reported a combined deficit of C$32 billion ($22.2 billion) for the 2025-2026 fiscal year, double the estimates for the year prior, according to a note from National Bank of Canada.