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P.E.I. budget projects $172.7 million deficit

Finance Minister Darlene Compton speaks to the media outside the legislature on June 17, 202 after delivering her 2020 budget address.
Finance Minister Darlene Compton speaks to the media outside the legislature on June 17, 202 after delivering her 2020 budget address. - Ryan Ross

Provincial Finance Minister Darlene Compton tabled a $172.7-million deficit budget Wednesday, which increased supports for low-income and disabled Islanders but also provided a significant tax cut for small businesses.

Compton tabled the budget following question period on Wednesday. During her speech before the legislative assembly, Compton acknowledged the economic times brought about by the COVID-19 pandemic.

“We know that this is not where anyone wants to be in terms of a budget bottom line,” Compton said in her speech. 

“Our economic and fiscal fundamentals are strong. We can – we will – weather this storm and succeed together.”

Finance Minister Darlene Compton presents her budget address in the legislature on June 17, 2020. - Ryan Ross
Finance Minister Darlene Compton presents her budget address in the legislature on June 17, 2020. - Ryan Ross

The budget does not project an abrupt decrease in tax revenue due in the coming year. It projects a decrease of $13.2 million in tax revenue compared to last year but projects a $265-million increase in expenditures. Revenue from the federal government are projected to increase by $146 million.

Overall, the budget, which has a bottom line of $2.4-billion in spending, focused some of the largest increases on programs for low-income Islanders and seniors. The budget will increase funding for the AccessAbility Supports for Islanders with a disability by $8 million and will provide $7 million in additional funding supports for long-term care and community care homes. 

The long-term care funding will help private long-term care homes to adapt to COVID-19 guidelines but will also be allocated to additional staffing at public long-term care homes.

The province will also fund the establishment of 12 additional long-term care beds in West Prince. 

An increase in social assistance food rates, already implemented in early January, will cost an additional $6.4 million. An additional $6.4 million has been budgeted for housing investments, including additional rent supplements and investments in new housing construction.

Speaker Colin LaVie listens to the 2020 budget address in the legislature on June 17, 2020. - Ryan Ross
Speaker Colin LaVie listens to the 2020 budget address in the legislature on June 17, 2020. - Ryan Ross

HEALTH

In health care, Health P.E.I. will see its budget increase by $46.9 million. A contingency fund for the province’s response to COVID-19 will account for $15 million of this amount. 

Additional investment in physician recruitment will cost $3.2 million, while an additional $3.8 million will be allocated to recruiting new nurses, nurse practitioners, specialists and allied health professionals. Over $1.2 million will be allocated to recruitment of psychiatrists. The province increased its complement of psychiatrists in the summer of 2019.

The province’s Recruitment and Retention Secretariat will see its budget increase from $2 million to almost $2.6 million. Part of this increase will be due to a $250,000 contract to the Medical Society of P.E.I. to assist in a doctors recruiting doctors initiative. 

The budget will also see $340,000 allocated to a new mobile mental health crisis unit. The program had been promised in the Progressive Conservative platform prior to the last election.

“This new provincial community-based service will include a toll-free mobile crisis line available to Islanders 24 hours per day, seven days per week, as well as in-person response teams available 12 hours per day, seven days per week,” Compton said.

EDUCATION

In education, the province will invest an additional $2 million, which will be allocated to hiring 24 new teachers and 15 new educational assistants. 

The launch of the province’s schools lunch program will go ahead in the fall, at a cost of $1.8 million. 

The province has also allocated an additional $700,000 for wage increases to early childhood educators, and an additional $600,000 will be allocated to designate six additional early years centres. 

"Some of the private childcare centres are not early years centres. So with that designation it provides a higher quality of education and a more structured way of learning," Compton said.

"It's, I think, the goal of most childcare centres to become early years centres and to have that program."

The funding will not necessarily mean an increase in childcare spaces on P.E.I. or a reduction in the waitlist for daycare.

An additional $700,000 will also be allocated for an increase to the Island Advantage Bursary for post-secondary students. 

JUSTICE

In perhaps a discordant note with the social protests across North America, law enforcement will see an influx of $916,000 for drug enforcement resources as well as for additional community policing. 

The Department of Justice and Public Safety will also allocate an additional $142,000 for a restorative justice pilot program, while an additional $100,000 will be allocated to the establishment of an Indigenous Courtwork System.

The budget will see the PC government come closer to a tax cut promise from the last election. The province’s small business tax will be reduced from three per cent to two per cent as of January 2021. The PCs had promised a reduction to one per cent during the 2019 election. In addition, the Basic Personal Exemption Tax level will be increased by $500 to $10,500. The PCs had promised this to be increased to $12,000 in their platform. 

The budget did not see large increases for climate change-related programming. Although the budget for the Province’s Climate Change Secretariat was increased by close to $1 million, the largest increases for green programming came in the form of a $5 million increase for the Active Transportation Fund and $2 million for solar incentive programs.

Liberal leader Sonny Gallant, left, and Opposition Leader Peter Bevan-Baker listen to Finance Minister Darlene Compton deliver her budget address on June 17, 2020. - Ryan Ross
Liberal leader Sonny Gallant, left, and Opposition Leader Peter Bevan-Baker listen to Finance Minister Darlene Compton deliver her budget address on June 17, 2020. - Ryan Ross

NEGOTIATIONS

The budget was preceded by negotiations with both the Opposition Liberals and Greens. P.E.I.'s PC government will require support from one or both parties to pass the budget. 

In a media statement, the Opposition Greens indicated that their party had asked for 10 programs totalling $7.4 million. All of these programs, including implementing increases to early childhood educator wages and expanded dental coverage for seniors and low-income Islanders, are included in the budget to some degree, although often with lower funding than requested.

In response to the budget, Green finance critic Michele Beaton raised few criticisms, praising the budget’s focus on vulnerable Islanders.

"This is a time that we have to work together. This is a time where Islanders are unsure of what the future is going to bring to them." 

Beaton said the budget responded to the immediate COVID-19 pandemic needs, as well as planned for the future.

Liberal Finance critic Heath MacDonald raised concerns about the tax revenue and economic projections contained in the budget, particularly around the lack of projected decreases in tax revenue.

"We are talking about a decrease in tourism to the value of likely 85 per cent, which is a $500 million revenue for the province," Macdonald said.
MacDonald said the province needs a comprehensive plan for economic recovery but has instead seen an “election budget”.

“They need a plan and a vision, and I don’t think we’ve seen it in this budget,” MacDonald said.

The Liberals did not provide a costed list of programs as part of their budget submissions. But in a letter, the Third Party requested additional investments in health care, including for preparation for a future wave of COVID-19, as well as investments to ready the school system for the fall season.

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