© HEATHER TAWEEL/THE GUARDIAN
Auditor General Jane MacAdam hold a copy of her 2016 annual report which was released Wedneswday.
Due to ongoing deficits, the province’s financial position continues to decline, says P.E.I. Auditor General Jane MacAdam.
As part of her annual report, the auditor general provides a report on the financial position of the province.
In the 2016 report released Wednesday, MacAdam notes P.E.I.’s net debt as of March 31, 2015, was $2.1 billion. This figure has increased by over 21 per cent over the last four years.
That translates to $14,573 for every man, woman and child living in P.E.I.
The biggest culprit for the increase is the government’s ongoing and accumulated deficits, amounting to a total of $231.7 million since 2011.
“There was a deficit for the year ended March 31, 2015 and an increase in the net debt… in terms of the financial position of the province, that’s a deterioration,” MacAdam said Wednesday.
“The net debt has been increasing for a number of years. When you incur deficits, you increase your net debt, and there have been many consecutive years of deficits.”
MacAdam noted long periods of time of incurring deficits and increasing debt has an impact on government’s sustainability when it comes to maintaining existing programs and services.
“Also it impacts your flexibility to respond to rising commitments,” she said.
Many of the financial indicators for the province’s finances were stable in 2015 compared to the year before, but the five-year trend for most of the sustainability indicators was unfavourable, MacAdam noted.
Sustainability indicators include net debt compared to GDP. This provides a measure of the financial demands placed on the economy by the province’s spending and taxation policies.
Over the last five years, P.E.I.’s net debt to GDP ratio reached its highest level in 2013, and has decreased over the last two years to 35.5 per cent. But it is still higher than it was in 2011.
There has also been an increase of $781 million in total liabilities since 2011, due mainly to increases in the province’s loans payable and in total liabilities.