P.E.I. deficit up to $73M
The deficit for the current fiscal year on P.E.I. is now expected to hit $73.4 million, up more than $30 million from projections at budget time in the spring, says Finance Minister Wes Sheridan.
Sheridan told CBC News Wednesday the increase was due to provincial expenditures.
Sheridan said the new projected deficit is still relatively small compared to what the province spends in the course of a year.
"Put it in perspective. We're only talking about 4.8 per cent of our total budget when we talk about this deficit. So it is miniscule in the overall scene of things," he said.
"The amount that we're off is minor compared to some other jurisdictions. The amount of our deficit overall in our budget amount is not spectacular, as it is in other jurisdictions where you have to have drastic and draconian movements," Sheridan said. "We don't need that. We need a gradual move to balance and that's what we'll do."
Sheridan blamed higher public service pension costs, more money spent on primary industries such as agriculture, and higher expenditures on social services programs.
Sheridan said this year taxpayers lost $3 million on the beef plant in Albany and payments for crop insurance were also up.
The finance minister also said revenues were down $10 million — government took in less money than expected in tobacco and liquor taxes.
P.E.I. relies very heavily on the tourism months of July and August for both its revenue tax and sales tax. It was difficult because of the summer's two rainy months.
"The markets have not responded and we're all under that type of pressure. That is what has pushed the federal government up, it has pushed Ontario and our neighbouring provinces as well," Sheridan said.
"That is an issue and that really affects employee benefits and our pension plan and we're going to miss that by about $13 million as to what we expected it to be. And so that really hurts the bottom line and that is one of the major pieces to this miss."
The new projection is considerably higher than last year's deficit, which the the government said in August would be $52 million. That projection has not changed.
Despite the setbacks this year, Sheridan said he's is still optimistic he'll have a balanced budget by 2014.
But the Opposition Conservatives aren't so sure.
Georgetown-St. Peters MLA Steven Myers said government spending is out of control and a $73 million deficit may look good by the spring.
"It's come up drastically since the election. And the true number will probably be closer to $100 million by the time the fiscal year does end," Myers said.
"Well, it's hard to blame the global markets for wasting money. I mean the boondoggle over there for the Bio-commons, when you have things like that," said Myers. "When you have the mountains they built in Borden, you can't blame the global economy for things like that."
The Conservatives want the government to show Islanders how they plan to balance the books by 2014.