Boosting the books
Increased federal transfers and Crown corporations helped improve province’s 2016-17 deficit, blue books show
Increases in federal transfers and increased revenue from provincial Crown corporations have helped to improve the province’s financial outlook.
The audited financial statements for the fiscal year that ended March 31, 2017, were released Tuesday.
It shows the government’s projected deficit for last year was reduced from an expected $9.6 million to $1.3 million after all the final numbers were calculated at year-end.
This is thanks mainly to higher than anticipated revenues from a few key sources.
Most notably, they include the following:
- The federal government: In 2016-17, Ottawa provided P.E.I. with $6 million in disaster relief, $4.4 million for the “investing in Canada plan” and $3.9 million in “strategic investment fund,” all of which were unanticipated revenues for the year.
- Government business enterprises: Crown corporations made $18.6 million more than anticipated in revenues last year.
Overall, the province’s revenues have been has been increasing steadily over the last four years with a 4.5 per cent increase in 2017 and a 15 per cent increase over the last four years.
The 2016-17 audited financial statements, also known as the ‘blue books’ thanks to the shade of their print covers, also show the province did not make as much as anticipated in taxes in 2016-17. Sales tax projections for the year were down $34 million while corporate tax revenues came in $17 million higher than expected.
The province’s net debt increased by 0.1 per cent to $2.17 billion. But the net debt-to-GDP ratio has been on a downward trend since 2013. The blue books attribute this improvement to a strong economy and modest annual deficit.
Government notes the decrease in the 2016-17 deficit positions the province to be on track to achieve its projected balanced budget in the current fiscal year.
Government notes it was able to improve its deficit while also addressing the $30 million surprise shortfall that resulted from the federal government making a five-year adjustment to the HST calculation.
“Reducing the deficit and returning to a surplus budget is one of our key priorities,” Premier Wade MacLauchlan said. “Being in a strong fiscal position, coupled with a strong economy, means we can invest more in priorities that matter most to Islanders.”
The release of the blue books Tuesday marks the earliest tabling of these documents in a number of years. This is thanks to legislation passed in the spring 2017 sitting that dictated the public accounts documents must be tabled by Oct. 31. Previously, these documents were not tabled until December or even January of the following calendar year, allowing for a lapse of up to 10 months before the year-end numbers were released to the public.