P.E.I. deficit for 2014 shrinks by $13 million

Teresa Wright
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Finance Minister Wes Sheridan

P.E.I.’s deficit for last year has come in $13-million less than expected, according to the audited financial statements for the province released Friday afternoon.

P.E.I.’s public accounts, better known as the blue books, show exactly how much money was actually made and spent every year, once all the final revenues have been tallied and bills have been paid.

The 2013-14 public accounts show the province’s deficit last year came in at $45.8 million, which is $13 million less than the $58.8 million deficit government budgeted for 2014.

Finance Minister Wes Sheridan says this is good news in the province’s march toward a balanced budget.

“This is a continuation down, this has been the third year of our deficit going in the right direction,” Sheridan said.

The main reasons for this improvement are increases in personal income tax revenues and an accounting change involving a $39 million HST transition payment from the federal government. This accounting change was debated at length last fall in the legislature when it was revealed that $25 million of this HST transition payment had to be moved out of 2013’s books and into 2014’s. That change is reflected in the blue books released Friday.

As for why personal income taxes were up, Sheridan says this is a sign that more Islanders were earning an income and also a reflection of P.E.I.’s increased population rates through immigration.

This public accounts document also includes the first full year impact of the HST since it was implemented in P.E.I. in April 2014. It shows the harmonized sales tax brought in a total $32 million in new tax revenues for the province.

The document also includes an additional 25-page analysis of the reforms made in 2014 to the two civil services pension funds.

These changes eliminatedguaranteed indexation of pension benefits and moved to a career average for calculation of pension benefits, among numerous other changes.

This pension fund overhaul led to a delay in the release of the public accounts documents. By law, they must be tabled by Jan. 31 of the next fiscal year. The 2014 document barely made it under the wire, with last minute changes being made until close to 5 p.m. Friday – the last business day before the legislated deadline.

The Guardian and the CBC were shown draft versions of the documents in advance, to enable interviews with Sheridan before the end of the business day.

Opposition Leader Steven Myers noted the last minute release of this document as“unusual and downright bizarre behaviour “ for a finance minister “with one foot out the door.”

“To be cherry picking spin from draft financial statements on the last business day before his deadline to produce audited financial statements shows how far the wheels have fallen off the bus,” Myers said.

“All Islanders should be concerned at the arrogance and lack of transparency this government is showing taxpayers.”

The Ghiz government added $60 million to the provincial debt in 2014, according to the audited figures. That brought the net debt to just shy of $2.1 billion.

But Sheridan pointed to a slight drop in the debt-to-GDP ratio of less than one per cent.

He says this is good news for the economy and is especially good news for P.E.I.’s bond ratings.

“If the ratio is declining, growth in the economy is exceeding growth in net debt, resulting in improved sustainability,” the public accounts report states.

But with a balanced budget on the horizon, don’t expect a return to days of big spending announcements.

Balance will only be achieved with continued restraint, despite the fact virtually all government department budgets have been frozen for the last three years.

Sheridan calls this the “new fiscal reality” and that reality is not likely to change anytime soon.

“Has it been tough on departments? Yes it has been. They’ve had to do a lot of work on attrition… and each department has to rationalize and decide what’s important on the front lines to Islanders,” Sheridan said.

  

twright@theguardian.pe.ca

Twitter.com/GuardianTeresa

 

 

 

 

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Comments

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Recent comments

  • Matthew Webster
    February 01, 2015 - 20:06

    I hope the remaining 1970 pages of the RB Mac Investigation into Robert, Wes and his buddies is as interesting as the 30 pages already released. Have a good feeling it will

  • Fed up
    February 01, 2015 - 18:17

    And we believe him? When last week those who KNOW told us Ghis government did the worst job ever with our money?!? To read this, you would think Wes knew what he was talking about...NOT...an actual accountant says this is total lies and double talk. With the amount of money the Liberals spent...roundabouts alone...we will NEVER see daylight! Certainly nothing spent on new doctors...and now gas up again. They have to find money for all their severance pays! And not ONE of them did anything to earn it and not ONE of them sees anything wrong in taking it when they ALL QUIT!!! Severance is for those who reach retirement she or those laid off....not for quitters

  • Not True
    February 01, 2015 - 11:05

    I don't believe this man. He keeps changing his answers. And why are the comments not being posted on the "Leadership hopefuls vexed by attacks on farmers" article? I'm sure there are plenty of them.

  • SlyFox
    January 31, 2015 - 20:38

    The Ghiz government added $60 million to the provincial debt in 2014. This statement tell it all.The rest is political double talk.

  • Garth Staples
    January 31, 2015 - 15:24

    And the Harper Govt came to the rescue once again! My how he hates us.

  • Resident
    January 31, 2015 - 14:15

    How is a deficit - a good thing? The expectation is not to have one to begin with...

  • Bill Kays
    Bill Kays
    January 31, 2015 - 13:50

    I see the magician worked magic with our budget deficit. The outgoing government, and they are outgoing, wants to be seen in a better light, so of course the bean counters camouflaged stuff to make the BUDGET DEFICIT appear in a better light. Trying to balance the budget on the backs of the poor and disenfranchised is a miserable legacy to leave ... but you can bet on this, they will not ask me to write their history books.

  • Michael
    January 31, 2015 - 13:25

    Wow! Just in time for election time too. Stop the lying.

  • Angus
    January 31, 2015 - 11:34

    Oh those terrible feds saved your butt again Wes, but what about next year? Island Liberals will continue the war against the Harper Government, Transfer payments will be down, as the Alberta economy takes a hit and 3 Liberal MPs & Wade begging for help at the Federak Cabninet door, will get you nowhere. Trudeau's crowd meanwhile take great joy in the decline of the economy, because they think it hurts Harper. Once again the Liberal leader needs to re reminded we didn't all inherit a trust fund to bail us out in hard times. Smart, real smart.

    • Idiots
      January 31, 2015 - 22:33

      Clearly the idiots on the right have got their talking points issued. Make sure you mention trust fund any time you can. What a bunch of goofs.

  • Bill Kays
    Bill Kays
    January 31, 2015 - 09:57

    I see the magician worked magic with our budget deficit. The outgoing government, and they are outgoing, wants to be seen in a better light, so of course the bean counters camouflaged stuff to make the BUDGET DEFICIT appear in a better light. Trying to balance the budget on the backs of the poor and disenfranchised is a miserable legacy to leave ... but you can bet on this, they will not ask me to write their history books.

  • Easterner
    January 31, 2015 - 09:34

    He was asked why and he answered, out west, here, who cares? they filed income tax in PEI, it's their share of the revenue.

  • Let's Face The Truth
    January 31, 2015 - 09:28

    The increase in income tax revenues are increased with the people working out west & filing here BUT don't forget that this goverment also is ripping off the seniors on pension by not increasing the personial exemption here for the lower income like the rest of Canada does . A lot of people don't make enough to pay federal tax but still have to pay PEI Income Taxes while these thieves walk away with a large severence & pension paid by us . Are we stupid ??????????????????????????????

  • sammy
    January 31, 2015 - 09:23

    Anyone working out west and filing their taxes in PE needs some tax advice. You can save bundle by filing in Alberta. For that matter by filing in almost any other province.

  • upwest proud
    January 31, 2015 - 09:12

    So the 12-13 deficit was 25 million higher and the 13-14 deficit was 25 million lower, we only received the money once but you read these stories and it makes it sound like there was some good management here. Without this accounting change the deficit would have been 70 million, we are spending way beyond our means.

  • Quiet Observer
    January 31, 2015 - 09:02

    is the best the Guardian can do? Reprint what Wes said? How about a little investigation and analysis that shows that only the $25million from the feds helped? Why is it left to readers to do this?

  • rob
    January 31, 2015 - 08:46

    your doing a great job wes!!! SAID NO ONE EVER!! and if they did i bet they re laughing all the way to the bank!!

  • Stewart Smith
    January 31, 2015 - 08:45

    Why bother printing stories about Wes's incompetence, along with a picture of Wes looking stunned. We already know he can't count to ten.

  • Smoke and Mirrors
    January 31, 2015 - 08:39

    So they rig the HST numbers and it still works out to sheridan and his failure buddies in the liberal party putting us another $46 million in debt, on top of the 2+ billion in debt we already have. What heroes.

  • Smoke and Mirrors
    January 31, 2015 - 08:38

    So they rig the HST numbers and it still works out to sheridan and his failure buddies in the liberal party putting us another $46 million in debt, on top of the 2+ billion in debt we already have. What heroes.

  • FinanceMath
    January 31, 2015 - 08:33

    How can this be construed as a continuation of a downward trend in budget deficits when after the budget was set/approved a $25 million increase adjustment to revenue had to be made and moved from a previous year to the 2013/14 budget. Simple math shows that without the $25 million the deficit would actually had been $12 million worse. This was dumb luck not good management.

  • Whatever
    January 31, 2015 - 07:44

    Oh please Wes, personal income taxes were up because of the west factor, something your government has never acknowledged.

  • red george
    January 31, 2015 - 07:39

    This doesn't paint a very good picture for the Province's financial positure for now or the next few years. First, the payment from the Feds will not be available for 2015 year end.Seondly, the increase in income tax revenues are from the large number of citizens working and getting big money out west, and can anyone ever believe Wes . Merlin the magician couldn't fix the problem the Robert and Liberals has left this Province .