P.E.I. on the right path: Ghiz

While other provinces are talking about raising taxes, cutting public services or running deficits to weather the looming global recession, Prince Edward Island's economy is performing better than expected, says Premier Robert Ghiz.

Ghiz said his province should be able to cut its forecast $36.6-million deficit but the Prince Edward Island premier wouldn't say by how much.

He made those comments in Montreal Monday where Canada's premiers and territorial leaders were meeting to discuss the current economic crisis.

P.E.I. is forecasting a $36.6-million deficit in 2007-08 and $34.9 million in 2008-09. The province will updated those numbers within weeks.

"We're on a path right now towards a balanced budget. We're going to continue to maintain that path but if there happens to be some bumps on the road

I'm not going to go out and slash health care and education," Ghiz told The Guardian.

"So far our economic numbers are holding up quite well . . . it's trending better than what we had originally thought."

The Island premier said

a drop in oil prices, and a drop in the Canadian dollar will benefit all Islanders, and the Island economy overall.

Most of the Island's exports go into the U.S. market, which is directly affected by high oil prices and the high Canadian dollar, which earlier this year was above $1 US.

The country's biggest province has suggested a deficit may well be the lesser of the three evils it is facing.

Ontario Premier Dalton McGuinty said his province can either raise taxes, cut public services or run a deficit.

"You don't have a lot of choices," McGuinty told reporters.

While hiking taxes is a non-starter, he suggested some services may be trimmed but that a temporary deficit may be the wisest move.

"I'm not sure I've heard an economist lately, and these are economists, not politicians, who are saying they are adamantly opposed to running a temporary, cyclical deficit," he said.

The premiers demanded that Prime Minister Stephen Harper not balance the federal budget by slashing programs in areas such as health and education.

Federal Finance Minister Jim Flaherty refused to speculate on whether the Conservative government might be forced to run a deficit in future years.

All agreed, however, to urge Harper to hold a federal-provincial meeting on the economy as soon as possible, but definitely before Christmas.

Canada's finance ministers will meet first and lay the groundwork for the First Ministers conference.

But that doesn't mean there's nothing the provinces can do in the meantime.

Ghiz said infrastructure spending should be accelerated where possible, including funding for the Atlantic Gateway.

"The faster we can get those dollars flowing, the faster that we can see more economic development in terms of infrastructure projects."

The Prince Edward Island premier said he's confident the Island will be able to weather the current economic storm.

"We don't see the highs that perhaps an Alberta sees but we don't see some of the lows that another province would see."



With files by The Canadian Press