Health and education are the biggest beneficiaries of new spending. (Province of P.E.I.)

The P.E.I. government is projecting big increases in revenue in 2009-10, but even bigger increases in spending, settling on a deficit of just over $85 million.

The Department of Health is the biggest beneficiary of the new spending, with an extra $28 million. The biggest announcement from that department is a new 10-bed stroke unit at Charlottetown's Queen Elizabeth Hospital. Previously, specialized stroke treatment was only available out of province.

Education also got a big boost, split between two departments. Innovation and Advanced Learning added $22 million to its budget, including $16 million in job training through Labour Market Development, while $5 million will be shared among the province's three post-secondary schools.

The Department of Education will deliver $10 million more to the Island's three school boards this year.

Farmers looking for help in these difficult economic times will be disappointed. The Department of Agriculture budget fell to $29.9 million from $30.8 million.

Focus on infrastructure

Sheridan said the province is committed to two major infrastructure projects: a new wind farm for Summerside, and a conference and convention centre for Charlottetown.

"We have the money on the table now," Sheridan told a media briefing just before presenting the budget.

While the province had set aside $17 million for those projects, Sheridan said he was still waiting for the federal government to agree to its share of the projects.

Finding a balance

In a release accompanying the budget, Provincial Treasurer Wes Sheridan said this is a time to be investing in the future, while recognizing the current economic situation.

"This budget strikes a balance, one which recognizes today's realities and tomorrow's opportunities," Sheridan said.

"By carefully and deliberately preparing this year's fiscal plan, I believe we have achieved that balance."

The budget includes $89 million in additional revenue and $125 million in new spending in a budget that rounds out to about $1.5 billion.

Federal transfers provide boost

The province is benefiting from increased federal transfers. (Province of P.E.I.)

Most of an expected $89 million increase in revenue (out of a total of $1.43 billion) comes courtesy of the federal government.

A total of $69 million in extra revenue comes through equalization, health and social transfers, infrastructure, and the labour market development agreement.

The province is also projecting an increase in tax revenue of $18 million, and an extra $3 million through fees and services.

Agriculture funding falls

The P.E.I. Federation of Agriculture had requested a tax exemption for fuels used in farm vehicles, but that request was denied as funding for the Agriculture Department fell almost $1 million.

The government did add to some programs for farmers. There was $250,000 more for a program encouraging sound environmental practices, and $250,000 in additional assistance for farmers seeking credit through the Federal Advance Payment Program.

Pension plan hits bottom line

In addition to new spending, crashing international markets were a big contributor to the government's deficit.

Sliding markets took the government's pension plan down with them, and the government is setting aside $39.4 million in a pension adjustment to make up the shortfall.

Sheridan said he hoped with better international market conditions next year, the province will not face paying a large pension adjustment, and that should help move the province closer to a balanced budget.

Expanding ambulance budget

The budget provides an extra $1.2 million for ambulance service, much of which will go to cover a program implemented April 1 that pays emergency ambulance fees for seniors.

Last month, the province's director of medical services said the province's ambulance service is stretched close to capacity. Dr. Richard Wedge expected a further increase in demand with more seniors using the now free service.

Wedge was hoping for $1 million to expand coverage — in particular for out-of-province transfers and more overnight service in Kings County. While it does not appear Wedge will have that much money to work with, Sheridan said there will be new ambulances in the coming year.

Deficit in perspective

The government argues that the per capita deficit is relatively low. (Province of P.E.I.)

While the $85.3 million deficit is one of the largest the province has ever seen, Sheridan made efforts to put it into perspective.

"Where we are with the deficit, we're not the lowest in the country," he said.

"[We're] at about half the per capita deficits of our neighbours."

P.E.I.'s deficit stands at about $605 person, compared to $1,474 per capita in Newfoundland and Labrador and $989 in New Brunswick.