November 13, 2008
For immediate release
Provincial Treasurer Releases Second Quarter Update for Financial Year 2008/2009 with the Progress Report on the PEI Economy
“We are facing some pressures in areas that Islanders might expect,” said Minister Sheridan. “The high price of oil hit some of our departments’ budgets rather hard and we had to contend with struggles in agriculture and healthcare as well as the effects of the downturn in the North American economy. Despite all this, we are faring better than expected in such turbulent times.”
The tumble in the world markets caused a decrease in the pension fund assets. This pension fund is guaranteed to Island teachers, healthcare workers and civil servants who have paid into it. Six million dollars was allocated to offset that. Less than expected revenue from personal and corporate taxes contributed to the overall revenue loss of $4.6 million dollars. Government also invested in a disaster assistance program for potato producers affected by extreme wet weather conditions.
Savings from other departments helped to offset some of these factors. Government is now $14.6 million over budget, which represents an increase of one percent of the total overall budget expenditures, but Minister Sheridan says Islanders should not expect cuts to important programs and services like healthcare and education.
“Public Accounts for 2007-2008 look like they will be more favourable than budgeted, which will help offset some of these challenges,” he said.
Minister Sheridan also released the Progress Report on the PEI economy. “While the Island is not immune from the global economic and financial situation, the year-to-date figures show the economy is in good shape to face slower North American growth prospects going forward,” he added.
Economic highlights for PEI show that on a year-to-date basis:
• Employment has increased by 1.4 percent,
• Total labour incomes are up by 4 percent,
• Retail sales are up 5.4 percent,
• Potato prices have improved,
• PEI has the fastest growing population east of Saskatchewan,
• Economy is expanding at 1.5 percent in 2008.
The Province of Prince Edward Island Fiscal Update 2008/2009 and the Progress Report on the PEI Economy can be found on the Prince Edward Island Government website: