Prince Edward Island

Higher-than-budgeted tax revenue leads to $75M surplus for P.E.I.

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Surplus will allow province to reduce debt while continuing to invest in key priorities, premier says

Premier Wade MacLauchlan says P.E.I. will be able to reduce its net debt for the first time since 2007. (Brittany Spencer/CBC)

The Province of Prince Edward Island ended the 2017-18 fiscal year with a surplus of $75.2 million, much larger than expected.

At the end of last fiscal, it was projected that the surplus would be $600,000.

Premier Wade MacLachlan said higher-than-budgeted corporate- and sales-tax revenue accounted for almost three-quarters of the surplus.

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He said the province has 6,600 new full-time jobs since 2016 and its overall economy has grown from $6 billion in 2015 to $7 billion in 2018.

Heath MacDonald, P.E.I.'s finance minister, said the province's population growth has contributed to the surplus.

"We've done extremely well, we've led the country, we've also got 6,500 or 6,600 more people working full time. That's driving the economy as well. There's more dollars on the street, if that's how you want to put it."

'A better position'

The positive financial outlook will enable the province to continue to invest in key areas, MacLauchlan said.

"We are now, as a government and a province, in a better position to build on the investments that we have made and to continue to meet key priorities, like mental health, housing, providing more tax relief for Islanders, and supporting Islanders who are the most vulnerable."

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He said the province will also be able to reduce the net debt for the first time in more than a decade. Debt payments represent the province's third-largest expense at $125 million a year after health care and education.

While MacLauchlan said the economic outlook was good, he acknowledged the recent challenges faced by potato farmers and dairy farmers in the province.

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With files from Brittany Spencer