P.E.I. government releases budget projecting $97.6M deficit

Finance Minister Jill Burridge tabled her first provincial budget in the P.E.I. legislature Thursday, with an estimated deficit of $97.6 million next year and no plan for a balanced budget in the foreseeable future.

Budget spending in the province, including interest payments and amortization, is projected to exceed $3 billion for the first time.

"Where we are right now, at [this] point in time, a deficit is not going to surprise anyone, given the investments we have to make," Burridgesaid in a media lockup before the budget was tabled.

A three-year budget plan sees the deficit fall to $58 million in 2024-25, and to $31.5 million in 2025-26. In that time the province's net debt would grow from $2.5 billion to $3.2 billion.

The investments Burridge listed in her budget speech are primarily in health and education, which are also the province's two largest line items when it comes to shelling out money.

Health spending

Spending on Health P.E.I. for this fiscal year rises to $957.7 million. That's $117.6 million more than last year, an increase of 14 per cent. Including spending at the Department of Health and Wellness, spending on health in the province will pass $1 billion.

The primary investment in health is dedicated to the UPEI Medical School, at a cost of $21.9 million in this fiscal year. The province has also committed to creating 100 positions for new medical homes, at a cost of $8.9 million.

The Peachey report, commissioned by the government to look at human resource needs in health care over the next decade, estimated the province needs to hire an additional 250 health care workers a year. The challenge in meeting that goal is recruitment, said Burridge, and not any financial concern.

"If we have people we can bring on board, we will find the funds to do that," she said.

Education spending

Education and early years spending will rise to $102.7 million, up $20.1 million or 24 per cent.

Investments in education include 100 new positions, including teachers, educational assistants, youth service workers, counsellors, and mental health support workers at a cost of $6 million. There is also more money for the school food program ($2.2 million).

On the early years front, there is $4.2 million for a child-care infrastructure fund, and $4 million to bring fees in designated centres down to $10 a day before the end of this year.

Liberals react

Hal Perry, the leader of the Official Opposition, called Burridge's financial plan another "status quo" budget, and said the Liberal Party's three MLAs arelooking forward to the coming budget debates in the legislature.

"The devil's in the details with most of this, so we'll have that opportunity to dig a little deeper, to ask more questions about what this budget will do to help the three major issues that we've heard at the door recently which [are] health care, housing and affordability," he said.

"Islanders are paying more and getting less."

The Canadian Taxpayers Federation also weighed in, criticizing the rising deficit as meaning "more money spent on interest payments and a larger burden for our children and grandchildren."

But interim Atlantic directorJay Goldberg said the federation approves of King raisingthe basic personal income tax exemption for Islandersfrom $12,000 in 2022 to $12,750 this tax year and up to $13,500 in 2024. The government is also creatinga new tax bracket for all income above $140,000, and raising the thresholds for all brackets because of higher costs due to inflation.

"The government's planned income tax relief is welcome news," Goldberg said in a news release. "But Islanders are still waiting for the government to eliminate bracket creep. Income tax rates are not presently indexed at the rate of inflation and that will cost taxpayersupto $263 this year."