December 5, 2000
For immediate release
Second Quarter Update 2000
Minister Mella confirmed that the Province should see a small budgetary surplus for 2000/2001. This allows us to broaden our economic base by diversifying and investing in both innovative and traditional sectors. The surplus is currently forecasted to be $210,000 as compared to the Budgeted surplus of $219,000.
The Minister is pleased that forecast revenues have increased to allow for an expansion in program spending. Revenue expansion is primarily the result of the economy's continuing strong performance, combined with increased Federal equalization payments.
As stated in the Prince Edward Island Economy Progress Report released last month, the current data indicates the provincial economy is growing at a brisk pace. Manufacturing, retail sales, construction, exports and fishing all saw revenue increases over last year. The retail sector expanded by 8.7 per cent and exports of Island products have increased by 28.1 per cent. Construction activity grew by more than 11 per cent. Prince Edward Island showed the second largest growth in Canada, mainly due to construction of new retail outlets in Charlottetown, a new hospital in Summerside and school construction and renovations throughout the Province. Residential housing starts are up as well by 5.1 per cent.
Prince Edward Island's long-term credit rating was upgraded by Dominion Bond Rating Service (DBRS) of Toronto in July. In the credit report, DBRS stated that the Province's balanced approach to fiscal planning not only strengthened its financial profile, but has contributed to the improvement in Prince Edward Island's economic fundamentals.
Private sector forecasts of Gross Domestic Product for the Province show growth during the year averaging at 3.8 per cent, which is above the other Maritime provinces. Rising prices for gas and oil have put upward pressure on the Consumer Price Index, increasing it by 4.2 per cent. The increase in consumer prices excluding energy, was subdued at 1.3 per cent year-to-date.
Total forecasted revenues in 2000/2001 are now expected to come in at $913 million, compared to the budgeted $890 million. Current expenditures are up by $25.3 million. Major expenditure commitments are in Health and Agriculture.
Capital spending is now expected to be $37.2 million, down by $1.5 million from budget primarily due to the timing of the East Prince Hospital development. Capital revenues are up $0.3 million.
The Provincial Treasurer continues to stress the importance of maintaining a balanced Budget and supports the Government's commitment to encouraging future economic development. The provincial economy shows sustained growth at rates rarely seen in the past century, and the vigorous economic expansion during the last twelve months on Prince Edward Island has resulted in rapid employment growth and rising incomes. The Island's employment growth of 5.7 per cent during the first 11 months of the year is well above the national average of 2.7 per cent.
Minister Mella reaffirms her commitment to Islanders and plans to continue to set and achieve goals that support and promote a prosperous economic future.