P.E.I. has cushion for pandemic spending from 2019-20 financial results
Government's projected deficit turns to $22-million surplus
The final audited statements for P.E.I. Premier Dennis King's first year in government are in, and they contain a rare bit of budgetary good news.
The original 2019-20 budget, presented back in the spring of 2019, projected P.E.I. would end up with a small surplus. Shortly after the pandemic hit, Finance Minister Darlene Compton said that planned surplus had been erased by the few weeks of pandemic that fell into the fiscal year.
In June, the province was forecasting a $3.7-million deficit for 2019-20, but the audited statements released Friday reveal P.E.I. ended up with a $22-million surplus.
"These numbers today continue to tell the story of how strong our economy was, as a result of the hard work of Islanders," said Compton in a news release.
"While we anticipate deficits in the near future because of spending required to support Islanders in response to COVID-19, I am confident that we will return to previous levels as we continue to regrow our economy, together."
Pandemic spending and a weakened economy have the government projecting a record $172-million deficit for 2020-21.
The King government said the surplus for 2019-20 will help offset the costs of keeping Islanders afloat during the pandemic.
Several factors came together to create the 2019-20 surplus.
Provincial revenues were higher than expected, including an extra $4 million in tax revenue over what had been forecast in June. Additional federal monies played an even bigger role, with $25 million more in federal transfers than had been forecast in June.
On top of that ,expenditures were lower because some infrastructure projects under the Investing in Canada Plan and the New Building Canada Fund were delayed.