P.E.I. deficit for 2016-17 closes at $1.3M

The province's deficit for the 2016-2017 fiscal year has been reduced considerably from earlier projections.

'Revenues were, I guess, better than expected,' says finance minister

Disaster relief funds from the federal government came through, helping to reduce last year's deficit. (CBC)

The province's deficit for the 2016-17 fiscal year has been reduced considerably from earlier projections.

After first promising to balance the budget for 2016-17, the MacLauchlan government then forecast a $9.6 million deficit in April 2016.  

In March, that forecast grew again to $17.9 million.  

Tuesday, the province announced the deficit actually closed out at $1.3 million.

Solid tax revenues can take much of the credit, said Finance Minister Allen Roach. 

"Revenues were, I guess, better than expected," said Roach.

Increased tax revenue credited

Corporate income tax revenue rose by nearly $18 million, personal income tax brought in an extra $3.5 million while taxes like gas, tobacco and liquor brought an extra $2 million, Roach said.

Corporation capital tax was also up $1.5 million and real property transfer taxes were up $1.6 million. 

'Businesses out there that had exceptional years,' also helped boost the economy last year, Roach says. (CBC)

The crown corporation Island Investment Development Inc., which administers the Provincial Nominee Program (PNP,) also had a higher than expected net income, Roach said.

He said disaster relief the province had sought for damages caused by a rainstorm "a number of years ago" had also just been received. 

"And certainly I think we can look at our economy and the way it was flowing," said Roach. "We have to look at Islanders and businesses out there that had exceptional years. And without our businesses really excelling and doing so well in all sectors, this would not have been possible." 

However, the province remains in the red thanks to a surprise $30 million bill from the federal government for HST revenues, as well as an additional $18 million extra in system-wide health care spending and $10 million more for family and human services. 

'Using special warrants willy nilly'

But Opposition finance critic Darlene Compton isn't convinced the financial picture is as rosy as government is making it out to be.

'I don't know if it's a trick or a treat,' says Opposition finance critic Darlene Compton of the deficit announcement. (CBC)

"We look on a regular basis at this government flipping back and forth between fiscal years to make it look like a good story," said Compton. 

"But the 17th of October they put in for special warrants of $31 million. So I'm not sure how you can consider it doing better when you're using special warrants willy nilly."    

The province also said today it remains on track for a balanced budget in 2017-18. 

With files from Steve Bruce