Opposition Leader Steven Myers speaks Tuesday, June 24 at the public accounts committee hearing Auditor General Jane MacAdam's annual report.
P.E.I.’s net debt is trending in a concerning direction, according to the province’s auditor general, a phenomenon that Opposition Leader Steven Myers believes should alarm Islanders.
On Tuesday, Auditor General Jane MacAdam appeared before the provincial public accounts committee to go over the details of her 2014 Auditor General Report.
In it, she identifies trends involving the province’s net debt, which has ballooned to over $2-billion.
These trends show that in the last three years leading up to March 31, 2013, the province has been increasing the amounts it is pushing out into the future that it will have repay for today’s spending.
MacAdam points out in her report the province’s net debt is growing at a faster rate than the population.
“It’s an unfavourable trend,” MacAdam told the committee Tuesday.
“P.E.I. increased (net debt per capita) from the prior period, which it’s not trending in a favourable direction.”
Net debt is an important measure of the financial position of the province, the AG writes in her report.
It provides a measure of the amount of future revenue that will be required to pay for past operations.
Broken down per person in P.E.I., the net debt equates to over $14,000 per Islander.
That amount has been rising every year for the last three years.
Myers says the rate at which it is rising is unsustainable and will put taxpayers in a precarious situation in the years to come.
“Until they reach a state of balance, which I still contend they’ll never do, they won’t be able to make a payment on the debt, so we’re going to continue to see that trend upwards, which is something that should be alarming for all Islanders,” Myers said.
The auditor general also pointed out the province has been spending at a faster rate than the growth in the economy.
This is known as the debt to GDP ratio.
In 2013, P.E.I. had the largest increase in this ratio than Nova Scotia and New Brunswick and now has the largest debt to GDP ratio in the Maritimes.
Myers also pointed to the fact P.E.I. has also been increasing the amount of money it is taking out of the economy through taxes and user fees for provincial services.
The 2014 AG report shows this too has been increasing for the last three years.
“When you’re doing that to your economy, it’s next to impossible for your economy to grow,” Myers said.
“They can’t continue to tax, they have to come up with a way to reduce spending. We can’t say, ‘Yes we’re going to continue to spend exactly the way we’ve been spending, which is wild and free, and we’re going to make you pay more for it, we’re going to charge you more for your license, we’re going to put a new tax in, which they did with HST.’”
Finance Minister Wes Sheridan has repeatedly stated the province is on track to achieve a balanced budget in the 2015-16 fiscal year.