CHARLOTTETOWN – P.E.I. Finance Minister Wes Sheridan says he remains on track to balance the province’s books in 2016, delivering this year’s budget with a $39.7-million deficit.
© Nigel Armstrong/TC Media
Liberal Cabinet Members from left, Allen Roach, Robert Vessey and Wes Sheridan watch as a crowd assembles on the grounds next to Province House in Charlottetown Friday for a rally to protest pension reform.
Department expenditures have been virtually frozen this year for the third consecutive year.
Program spending is down this year over what was spent last year, but part of last year’s expenditures included an unbudgeted $25-million payment into the two private sector pension funds as part of a major pension overhaul.
The province is expecting revenues to grow 3.3 per cent this year, but is only increasing spending by two per cent.
This is all part of Sheridan’s plan to get the province out of deficit.
By growing revenues faster than expenditures this year and again next year, a modest surplus of $100,000 is projected for the 2015-2016 fiscal year.
“It’s very much a stay the course, let’s get balanced type of budget, but there are a few initiatives that are not very expensive but they are impactful for people on the street, and that is exactly what we’ve tried to target.”
This marks the first full year since the harmonized sales tax was introduced in Prince Edward Island.
Detailed revenue forecasts included in this year’s budget document show the HST brought approximately $30 million in new sales taxes in 2013-14.
But the province did not receive as much in HST revenues as it anticipated.
“We’re finishing almost $9 million below (what we budgeted),” Sheridan said.
“There’s something amiss inside all harmonized jurisdictions. Ontario reported three months ago they’re $1 billion off this year… There’s something that’s going on. The officials have had numerous phone calls, they’ve gone to Ottawa to look at it to try to see why is there a difference in this fiscal.”
The single largest increase in expenditure this year was on interest charges on the province’s debt, which increased almost $16 million. This is more than increases this year to the Health and Education departments combined.
The net debt this year will grow to $2.16 billion.
As part of his budget address, Sheridan announced a number of new measures and programs, but none of them come with big price tags.
As promised, government will spend $400,000 to pay for insulin pumps and related supplies for children with Type 1 diabetes.
The province will also expand the number of day surgery spaces at the Queen Elizabeth Hospital from 10 to 18 and will provide a separate opthamology suite. This represents $775,000 in new spending for the Health department.
To help Islanders referred off-Island for medical appointments and surgeries, the province has entered into a partnership with Maritime Bus to provide financial assistance for patients’ bus transportation to their health-care destination. This assistance will be based on income testing.
The seniors' home repair program is also getting a modest boost, with an increased grant amount of $2,000 for qualifying applicants.
Regulations will also be changed to allow pharmacists to administer flu shots.
Room and board and clothing allowance for children in the province’s care will be increased by two per cent next year.
A number of other new initiatives were also announced in Tuesday’s budget with little to no cost for government.
A new ‘Triple P’ parenting program, developed at the University of Queensland in Australia, will be launched “to help solve current parenting problems and prevent future struggles.”
An ‘Eye See, Eye Learn’ program will also be introduced, allowing eligible kindergarten children free eye exams and, if they require glasses, they will receive them for free through a private sector sponsor.
Government will partner with the Red Cross to offer a health equipment loan program for those who require special equipment, such as a wheelchair, hospital bed, walker or bath seat.
Also this year, an initiative promised in the fall speech from the throne for Grade 9 students will go ahead. This will help students with career and financial planning as they prepare to transition to post-secondary education.
Last year’s deficit came in at $52 million – which is $7 million better than projected.