A fiscal update released Monday shows British Columbia’s provincial outlook has declined and the government’s deficit will rise in the current fiscal year to a record $11.6-billion, in part due to U.S. tariffs and a slowdown in the housing market.

But mostly, the rise in red ink is a result of the NDP government’s elimination of the carbon tax.

The new report says the provincial economy is still resilient despite tariffs imposed by the U.S. administration, with the economic growth forecast revised slightly, down to 1.5 per cent in 2025.

In March, the government forecast a record deficit of $10.9-billion based on modest economic growth of 1.8 per cent. But those estimates, included in the budget documents, were written before the tariffs were introduced.

Premier David Eby promised to eliminate the carbon tax as a campaign promise in last fall’s provincial election. The change took effect on April 1, and will reduce revenues to government by $2.8-billion. Those losses are partially offset by a one-time influx of cash due to a settlement with tobacco companies.

B.C. relies less on the United States for trade than most provinces, with a little more than 52 per cent of the province’s exports last year heading south of the border.