P.E.I. auditor general raises the alarm — again — about province's rising deficit, debt load
CBC
P.E.I.’s auditor general says he’s concerned and disappointed that the projected deficit has doubled what government initially estimated it would be — and he's urging the province to balance its budget.
In its second-quarter fiscal update, released Thursday, the Progressive Conservative government said the deficit is now projected to hit $367.4 million — nearly double the $183.9 million estimated back in the spring.
Auditor General Darren Noonan isn’t surprised: he’s been raising concerns about the province’s rising debt for years.
“In terms of the deficit itself, very disappointed to see that level of overspending.”
The fiscal update shows the bulk of that overspending came from a few key areas:
P.E.I. Premier Bloyce Thompson, who was sworn in less than a week before the fiscal update was released, said the spending was unavoidable.
“We’re not immune to it, and like every other jurisdiction, had to spend that money,” he said. “I will defend that all day long.”
Finance Minister Jill Burridge said P.E.I. hasn’t been spending frivolously.
“It is our job of government to ensure that Islanders are taken care of and their needs are taken care of.… This is essentially tending to core needs,” she said.
“These are all places where government has to play a strong role and so we had to step up to that.”
The province’s long-term debt has now been pushed to $3.734 billion. P.E.I. is tied with Newfoundland and Labrador for the lowest bond rating in the country, according to DBRS Morningstar.
The cost of that debt? Noonan estimates the province will pay $171 million in interest costs, up from $125 million in 2020, an increase of $46 million in five years.
“How do you fix that? That’s a huge discrepancy from a balanced budget, so there’s going to be a big challenge for this government and future governments to get us back to balanced budgets, Noonan said.
He added there are only two ways to pay down that debt: cut programs and services or increase taxes.
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