After posting large surpluses in recent years, the Province’s Finance Minister has projected a modest deficit at the end of the fiscal year due to the coronavirus (COVID-19 strain) pandemic.
The Department of Finance had projected a surplus of $2.5 million prior to the beginning of March. As of Friday, Darlene Compton said the Province would finish off the 2019-2020 fiscal year with a projected deficit of $3.7 million. The fiscal year ended March 31, 2020.
A fiscal update released by the Province late Friday afternoon said the deficit was due to a $38.4 million projected decrease in revenue. The decrease is partially offset by a $32.8 million reduction in spending. Most of these reductions are due to delays in projects funded through two federal infrastructure programs.
Overall tax revenue is projected to decrease by $5.2 million due to the events of the last three weeks.
Compton also said the $25 million Emergency Contingency Fund has been expanded to a $40 million fund. This fund has been financed through a special warrant, which will add to the Province’s debt. Compton added P.E.I. has seen its credit rating improve in recent years, which puts the Province in a better position for borrowing at this time.
"Because of our strong fiscal standing pre-COVID-19, and, more importantly because of the resiliency of Islanders, we are going to be in a better position to bounce back together when this pandemic is behind us,” Compton said.
Compton acknowledged the economic losses created by the pandemic have created uncertainty for many.
“Some have been laid-off. Some have had their hours reduced. Seasonal workers are uncertain whether there may be work for them and business owners are worried about the future of what they built over the years," Compton said.
"These are, understandably, frightening days for many of our communities."
Compton announced Islanders will have the option of deferring property tax payments until December 31, 2020.
Premier Dennis King also spoke during the briefing, addressing his remarks to business-owners and workers affected by the economic impacts of the pandemic.
King revealed that almost 10,000 people on P.E.I. have filed for employment insurance benefits in the past two weeks. King said he is aware of the economic pressures faced by Islanders.
"We are doing our best to ease the pain and lessen the burden," King said.
"From day one and every day since, our emergency economic response has been to do the best we can for as many as we can, for as long as we can."
King noted several of the income relief programs for business, workers and self-employed individuals, that have been rolled out over the last three weeks. Most of these programs have been designed to disperse funds to Islanders in need quickly and are acting as a bridge before larger federal income-support programs are up and running.
The income relief programs have indeed distributed millions of dollars to Islanders in a remarkably short period of time.
But King acknowledged some of these programs have not been perfect and have been created in the midst of a difficult period.
"Government realizes that we can't make everyone whole. But we are trying to do everything we can to lessen the impact and ease the pain,” King said.