Opposition MLA says government is overprojecting revenue in its budget
The provincial government is looking through rose-coloured glass when it comes to finances, says Belfast-Murray River MLA Darlene Compton.
The Opposition MLA says the province has budgeted an extra $35 million in tax revenue this fiscal year but she wants to know where Finance Minister Allen Roach is going to find the money.
Compton said government, for the last eight years, has taxed Islanders to a record extent, and this year alone government will take in $875 million in provincial taxes and more than $950 million with licenses, fees and other sources.
Compton said the extra $35 million equates to an extra $520 for every household in the province.
Roach said during the last number of years, taxation in P.E.I. has been brought in line with a number of other provinces. He added once government turns a surplus it will “take a very close look’’ at taxation levels again.
“It comes back to overexaggerated estimates for revenue,’’ Compton later told The Guardian. “How do we justify $35 million in increased tax revenue?’’
Compton said the province is presenting a best-case scenario when it comes to the books.
“There are no hikes to income tax so we take from that that we’re going to grow the economy by that much this year which, for all intents and purposes, sounds wonderful, but how is that going to happen?’’
The Opposition presented a report from Toronto’s Moody’s Investors Service on June 22 that indicated the P.E.I. government in the past has based numbers on sectors such as agriculture, tourism and food processing. The investors service notes the problem with that is it’s difficult to truly gauge economic activity until late in the year, when there is little time to adjust to unforeseen downward pressures.
“Although the province has presented a plan of a small deficit followed by a return to balance, we approach some of the assumptions with caution as they seem to be tilted to positive,’’ Michael Yake, vice-president of Moody’s, said in a news release.
Roach says the estimates are made from trends during the past six to seven years that are taking place in the Island economy where GDP and revenue continues to grow.
“Our exports, internationally and nationally, have grown considerable, in fact, to the highest we’ve ever seen in the history of the province. I wouldn’t call that a guess. I would call that watching what’s taking place (with the P.E.I.) economy,’’ Roach said, adding there are other bond raters which wouldn’t agree with Moody’s.