P.E.I.'s expected deficit nearly cut in half due to increased revenues

The $112.2-million deficit P.E.I. was projecting in the spring is now expected to come in at just over half that level, according to the fiscal update delivered by the finance minister Friday.

Fall fiscal update shows signs of economic recovery, says P.E.I.'s finance minister

P.E.I. Finance Minister Darlene Compton says high revenues, effective public-health measures and low COVID-19 expenses have helped P.E.I.'s financial situation. (Brittany Spencer/CBC)

What was originally projected to be a $112.2 million deficit in P.E.I.'s operating budget for 2021-22 is now expected to come in at just over half that, the province's finance minister revealed in a fiscal update released Friday.

Darlene Compton announced a revised deficit of $60.6 million projected for the current fiscal year.

"This fall fiscal update and the recent release of the Public Accounts for 2020-21 show that our economy is recovering as we move forward, adapt and continue to financially strengthen our province," Darlene Compton said in a news release.

"Islanders have played a huge part in mitigating the economic damage of the pandemic and as we look to rebuilding our economy, we must all stay diligent in our response to COVID-19 and continue to support our local communities and economies."

The province is projecting revenues will come in $89 million higher than initially projected. That includes an increase of $52 million in expected provincial tax revenues.

Offsetting that is program spending expected to be $46 million over budget.

"The last 19 months may go down as some of the most difficult months in our Island's history, but by making the safety of people a priority through public-health measures, Islanders have been able to get out and support our local economies," said Premier Dennis King.

Growing population

In addition to sitting on more money than anticipated, the province is also leading the country in population growth, retail and investments in building construction.

Since July 2020, the Island's population has grown by 2,989 people — surpassing the national growth rate for the sixth consecutive year, it said. 

And while the employment rate continues to recover from COVID-19, the release said with safety measures such as the P.E.I. Vax Pass coming into play, the hope is to keep the economy moving forward.

"By working together, we have put our Island in an enviable position, and I look forward to continuing to work with Islanders to support the future of our Island," said King. 

Last week the province revealed its deficit for the previous fiscal year, 2020-21, came in at a fraction of what it had forecast when that budget was originally tabled during the opening months of the pandemic.

The province had originally expected that deficit to reach a record $173 million. Instead, it came in at $5.6 million.