Province's fall fiscal update projects P.E.I.'s deficit to balloon to $129M

Islanders had to wait until winter for the P.E.I. government's fall fiscal update, which was released Friday.

It forecasts a large increase to the provincial deficit. The province now projects that its 2024-25 deficit will be $129.5 million, about $44 million more than what was included in last February's budget. 

The government also expects to increase spending by about $38 million, which it said is due to increased costs to deliver social programs, energy efficiency programs and health care. 

"This update reflects how we have been supporting our senior Islanders, strengthening our healthcare system and investing in our growing economy," P.E.I. Finance Minister Jill Burridge said in a news release.

"We recognize the increased deficit may set us back on our path to a balanced budget, however it is also important to recognize that those increased expenditures are aligned with our key priorities and mandate items." 

The report is a checkup on the province's financial health. It is usually made public weeks before January.

Earlier this month, the government said it needed more time to prepare the update because several factors had changed over the last eight weeks of 2024. 

Those factors include the federal government's two-month HST holiday and Donald Trump's threat of tariffs and the economic climate, the province said.

The province projects its total revenues to decrease by $6.5 million, mostly due to a $15.4-million decline in sales tax revenue that's "primarily a result of the two-month HST break," according to Friday's news release. 

In terms of spending, most of the extra $38 million is going to Health P.E.I. and the Department of Social Development and Seniors. 

The health agency is forecasting a $26.8-million increase to its operating budget. Social Development and Seniors anticipates spending an additional $33.6 million, mostly due to cost and volume increases in the accessibility support and social assistance programs totalling $19.8 million. 

In an emailed response to the fiscal update, Green Party finance critic Peter Bevan-Baker said the delay in the report's release shows "a growing lack of fiscal responsibility and transparency" from Dennis King's Progressive Conservative government. 

"It's deeply concerning that we're seeing unprecedented spending, but Islanders aren't feeling the benefits," Bevan-Baker said in the statement. 

"Healthcare remains in disarray, with emergency room closures, service reductions, and system overcapacity, while many families struggle to pay rent or put food on the table."