It was budget day in Ottawa Tuesday, as the attention turned to the nation’s finances. But here on P.E.I. more attention should be given to the provincial budget, because our debt is ballooning out of control.
On Friday, Auditor General Jane MacAdam released the province’s financial statements for the past year, which showed our debt had reached $2 billion for the first time in P.E.I. history.
That’s just over $2 billion for 145,273 people. Islanders are expensive to keep – that’s $14,031 for each of us.
It’s hard to imagine how such a small province could rack up that much debt.
Nova Scotia and New Brunswick have higher debts, but they’ve also got much larger populations – almost $14 billion for 940,789 Nova Scotians and $11.5 billion for 756,050 New Brunswickers.
P.E.I.’s debt didn’t accumulated overnight. It took years and several different governing parties to accrue this staggering amount. Still, it’s almost double what it was in 2000.
In the past year alone, the deficit came in $4 million higher than what was budgeted for the 2012-2013 fiscal year. And the original projection of a $74-million deficit for the past fiscal year was high enough. It actually grew to $78 million.
Finance Minister Wes Sheridan – the man currently responsible for the province’s sorry state of financial affairs – says not to worry. He’s confident he can balance the budget by 2016.
So he’s going to take us from $78 million to zero in just two years?
Sheridan says his deficit didn’t actually increase last year, because the province received $25 million from the federal government as the first installment of $39 million in transitional funding to help us roll out the HST.
However, the auditor general would not allow the province to use that $25 million in last year’s books.
“She wanted it all in the year the HST was actually implemented,” said Sheridan.
That $25 million will be added to revenues for the current fiscal year, which will improve this year’s deficit numbers, we hope.
But that’s just one year. Even if he balances the books one year, Sheridan shouldn’t count on this HST windfall to excuse him from his financial responsibility to dig us out of this enormous pile of debt.
P.E.I. has an aging population, high taxes, and a reliance on federal transfers. The provincial government must prioritize its spending to make sure programs and services can be maintained into the future. This is too great a burden for the next generation. We can't pass the buck when it's that big.