P.E.I. government finally balances budget, projects $600K surplus
Surplus largely built on increase in expected revenues
It's been 10 years in the making, but P.E.I.'s Liberal government has tabled a balanced budget.
"I'm proud the government has been able to achieve that," said Finance Minister Allen Roach in the media lockup.
"I feel good on behalf of all of my colleagues."
The Liberals have been predicting the budget would show a surplus within a few years since they were first elected in 2007.
The budget tabled by Finance Minister Allen Roach on Friday morning projects a $600,000 surplus for the coming year. That follows a $17.9 million deficit for 2016-17, the fiscal year that just ended.
Revenues on the rise
The surplus is largely built on a big increase in expected revenues.
Last year the province had to pay back $30 million in HST revenues following a recalculation by the Department of Finance Canada. That meant a big deficit for last year.
A $38 million increase in sales tax revenues is expected for the coming year, following a 1 per cent HST increase last fall.
But that is not the only source of extra money for the government.
The government is also expecting another $15.5 million in income tax revenue, a 4.3 per cent increase. Income tax revenue was up just 3.2 per cent last year.
Crown corporations come through
The government benefited from significant windfalls from Crown corporations last year, and expects some of that revenue stream to be preserved this year.
Island Investment Development Inc. brought in $10 million more than expected, thanks to returns from the Immigrant Investment Fund. IIDI expects its revenue to be even stronger in 2017-18.
A good year for Island farmers also returned $8.2 million in unused agricultural insurance to government coffers last year.
Deficit also about spending
The provincial government found itself significantly over budget in a number of spending areas last year.
- Innovation PEI: +$3.8 million (+11.6%)
- Family and Human Services: +$6.2 million (+6.4%)
- Health PEI: +$16.2 million (+2.7%)
- Transportation, Infrastructure and Energy: +$4.9 million (+4.4%)
- Workforce and Advanced Learning: +$6.8 million (+5.9%)
In all, expenditures were up $30.5 million over the estimate from last spring, or 1.8 per cent.
Roach defended those increases.
He noted changes to disability supports caused the increase in the Family and Human Services budget, that more Islanders required medical services off-Island than were expected, and that severe weather hit the Island's transportation infrastructure.
"There are some areas where it is prudent to exceed your budget," said Roach.
Even with the operating surplus this coming year, P.E.I. will not start paying off the provincial debt until 2020 due to costs from the capital budget.
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