A long list of new spending announcements didn't keep P.E.I. Provincial Treasurer Mitch Murphy from keeping the province in the black for 2007/08.

The budget, delivered Tuesday, offered $30.7 million in new spending on health, $16.6 million more for education and significant tax cuts.

However, Murphy said the surplus for the year ending March 31, 2006, would be $1.3 million, with another surplus of $2.1 million for 2007/08.

The budget, Murphy's fourth, is expected to be the last for the Pat Binns government before an election that could be called within days.

The additional funding for the Health Department includes:

  • $1.8 million for additional doctors to be hired, although it wasn't immediately clear how many more doctors that could bring to the Island.
  • An estimated increase in funding of $445,000 for the neo-natal intensive care unit at Charlottetown's Queen Elizabeth Hospital.
  • $1 million more for new cancer drugs.
  • $2.2 million more in other drug funding.
  • $1 million for youth addictions treatment, including a previously announced youth addictions centre.

Tax cuts

The province announced a cap on provincial gas taxes, but only when gas costs more than $1 a litre: when that happens, provincial taxes will be capped at 20.2 cents per litre.

Overall, Islanders and business owners will save a total of $34 million in provincial taxes, including:

  • Income tax brackets will go up by two per cent.
  • Middle-income families will no longer have to pay the high income surtax.
  • Married couples making $35,000 each will save $160 in income tax annually.
  • Lifetime capital gains exemption for fishermen, farmers and small-business owners climbs from $500,000 to $750,000.

In a continuation of a strategy announced in 2006 budget address, the government also continued cuts to the small business income-tax rate. It was chopped from 5.4 per cent to 4.3 per cent on April 1, 2007, and is to continue to drop till 2010, when it reaches one per cent. 

Tuition to fall

Education also got a boost, with $16.6 million in additional funding, including $2.1 million towards a plan to decrease UPEI tuition fees by 10 per cent.

All levels of education, from kindergarten to post-secondary, will see increased funding, including:

  • Base funding for UPEI climbs by $1.4 million.
  • Base funding for Holland College climbs by $1 million.
  • Special needs student funding increases by $500,000.
  • $570,000 for a new welding program at Three Oaks High School.
  • Operating costs for school boards climbs by $367,000.
  • Kindergarten funding increases $220,000.

Help for social assistance recipients

The Department of Social Services also got a bit of a boost, with Murphy announcing an additional $2.9 million for that department.

The Disability Support Program, which had its funding cut a year earlier, will see its funding jump by 11 per cent.

People on social assistance will get an increase in their shelter allowance. The province has increased that part of the budget by $527,000.