PEI

Strategy needed as interest on P.E.I.'s debt hits $120M, auditor general says

P.E.I.'s auditor general says he'd like to see more of a public discussion around how much money the province spends every year on interest charges to service the provincial debt.

'If the interest rates ever moved a point or two points, it would have a huge impact on services'

P.E.I. Auditor General Darren Noonan addresses a legislative committee in Charlottetown on Tuesday. (CBC)

P.E.I.'s auditor general says he'd like to see more of a public discussion around how much money the province spends every year on interest charges to service the provincial debt.

For the fiscal year that ended March 31, the amount was $120 million — more than the combined budgets last year for the departments of Climate and Energy, and Justice and Public Safety.

Darren Noonan told a legislative committee that costs are likely to increase as the province's deficit spending drives the debt even higher.

"Our interest rates are very low, people see it in their own mortgages," he said.

"If the interest rates ever moved a point or two points, it would have a huge impact on services provided by the province. So I think there should be some sort of a strategy, in years of surplus so much money be allocated towards the debt or something. I don't know exactly what the formula should be."

Noonan noted that even though the province posted a $22 million surplus for the fiscal year that ended in March of 2020, the net debt still went up.

On a per-capita basis, he said the portion of the debt allocated to every P.E.I. resident increased by $311 last year, meaning the debt is growing faster than P.E.I.'s population.

More from CBC P.E.I.

With files from Kerry Campbell

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