Prince Edward Island’s Auditor General tabled a report on the long term fiscal sustainability of the province on the last day of the legislature Friday. The report says the federal Parliamentary Budget Office has rated the PEI government’s spending as fiscally unsustainable. PEI has the third highest fiscal gap in the country, behind only Manitoba and BC. Based on 2024 figures with a GDP of 10.4 billion dollars, the report says PEI would need either permanent tax increases, or spending reductions amounting to 1.1 percent of GDP or 114.4 million dollars to stabilize government net debt.
Auditor General Darren Noonan’s report goes on to say that capital spending is primarily responsible for an increase in the province’s net debt and warns that escalating net debt puts a tremendous burden on future generations to repay it, as well as increasing interest costs that will take money away from programs and services. The report predicts that by 2029-30, the province’s net debt will be 4.07 billion dollars.
