The Honourable Pat Mella, Provincial Treasurer confirmed today that the Province's finances are firmly on their budgetary track for 1999/2000, with a surplus of $3.9 million, which compares to the Budgeted surplus of $4.2 million. This is the second consecutive year that the Government has achieved a surplus, " and by so doing we are able to reduce the provincial net debt, which has been a burden for so many years", said the Minister.

Minister Mella noted that " forecast revenues have improved significantly from budget, permitting an expansion in capital spending and programs". "Revenue expansion is primarily the result of the economy's continuing robust performance, coupled with an expanded Cooperation Agreement on Regional Economic Development." The Treasurer stated that tax revenues improved by $9.3 million from Budget, largely from Personal Income Tax revenue and Sales Tax.

In terms of the economy, available statistics all point to substantial economic progress. Tourism, manufacturing, construction, farming and fishing have all done well in 1999. Expenditures by tourists are expected to exceed $300 million this year and exports of Island products to other countries have increased by 12.7 per cent in the first seven months of the year.

The Minister said she was pleased to have had the opportunity to meet with Gordon Thiessen, the Governor of the Bank of Canada, on the occasion of his visit to Charlottetown last week. In private discussions the Governor was provided an update on the provincial economy and the provincial finances. He said he was most pleased to see the solid economic and financial performance of the Province. The Governor did discuss the recent increase in consumer prices in Canada and he noted that it was almost entirely the result of increased energy costs, which he did not believe will continue.

Private sector forecasts of economic growth for the Province all point to improvement during the year, averaging in the order of 2.1 per cent, in terms of growth of the Province's Gross Domestic Product. Inflation will remain at low levels, with the Consumer Price Index increasing by about 1 per cent on PEI.

In terms of the provincial finances, total revenues in 1999/2000 are now expected to come in at $851.9 million, compared to $828.2 million at Budget. Current expenditures are up by $11.8 million, of which $3.0 million is from an expanded Cooperation Agreement on Regional Economic Development. Other major expenditure commitments are in Health and Economic Development.

Capital spending is now expected to be $46.5 million, up by $12.2 million from budget. Highway improvements are the major area of expansion, increased by $6.2 million, together with increased spending at Provincial Parks of $4.5 million. Of the increased capital spending, $8.5 million was offset by increased capital revenues.

The Provincial Treasurer stressed the importance of maintaining a balanced Budget and the progress that the Government has made in providing for an environment within which the economy can flourish.

"Islanders can be assured that as Treasurer I will continue to work in cooperation with my Cabinet colleagues to maintain the momentum that we have now achieved", she said.