Last year’s provincial debt ballooned to $2 billion with a deficit that came in $4 million higher than originally budgeted, according to newly released audited financial statements.
But Finance Minister Wes Sheridan says he is still on track to balance the books by 2016.
On Friday, Auditor General Jane MacAdam released the province’s official Public Accounts for the 2012-2013 fiscal year, known as the blue books.
These fully audited numbers show the province’s projected $74-million deficit for the fiscal year ending March 31, 2013, grew to $78 million. This pushed the deficit over $2 billion for the first time in P.E.I. history.
But Sheridan says his deficit didn’t actually increase last year. He explained the province received several million more in revenues through corporate and personal taxes than budgeted. This would have actually lowered the deficit projections for the year.
But when the auditor general was preparing her documents, she would not allow the province to use $25 million it received from the federal government last fiscal year on its books for the year.
This payment was the first installment of a total $39 million in transitional funding to help the province roll out the HST.
“The auditor wanted it all taken in one year and she wanted it all in the year the HST was actually implemented,” he said.
“I had to back $25 million out two weeks ago to do this, which takes us back up to $78-million (deficit).”
That $25 million will now be added to revenues for the current fiscal year, which will, in turn, help to improve this year’s deficit numbers.
Sheridan says this is merely an accounting change — there is no change in actual expenditures as a result of this measure.
“You have to go with the flow with accounting rules, we sure as heck don’t make them, but we abide by them and we make the changes that are necessary.”
As for the province’s $2-billion debt, that’s a matter of grave concern to Opposition Leader Steven Myers.
Every year the province remains in deficit, the net debt grows, Myers said.
“He’s going to pass that down to the next generation, kick the can down the road even further and it’s getting our province nowhere.”
Myers says Islanders also paid $45 million more in taxes, fees and services in 2012-2013 over the previous year.
“That’s over $800 a household in Prince Edward Island. That is scary. And that’s before the HST.”
The province has a three-year plan to return to balance, but has been having trouble meeting its budget targets.
Sheridan has twice had to push back his balance target date. He originally planned to be back in the black by 2014. Now says that will happen in 2016.
In the meantime, Sheridan says he is not concerned about the $4-million adjustment to last year’s deficit.
“The point of the matter is we still were able to come in almost at the number that we had projected,” Sheridan said.
“What it means very clearly is that we’re on track with our three-year plan, and that’s the part that I’m most content with.”