A budget for the time
It was a budget geared for the new normal of COVID19.
The document presented last week by Finance Minister Darlene Compton was vastly different from the one she had planned to present back in April.
As late as four months ago, it looked like the province's finances were sitting pretty with a small surplus to end the last fiscal year.
We now live in a very different world. A world where life came to a virtual standstill and is now ramping up slowly. A world where jobs disappeared, stores and services closed with some pondering whether they will reopen. A world that can end at Confederation Bridge or Northumberland Ferries for both Islanders and visitors, if their travel is deemed nonessential.
These extraordinary times call for extraordinary expenditures and the projected deficit of $172.7 million is the highest ever projected in the province. It builds in a special contingency fund for each department to help deal with COVID-related expenses.
The budget includes an increase in the personal income tax exemption, a business tax reduction that make the province's rate the lowest in the region and more money for new physicians, nurse practitioners and virtual care.
Physical distancing guidelines will result in smaller classrooms and 24 new teachers and 15 educational assistants. Long-standing promises like the school fund program and an extension of the use of marked fuel for farm-plated vehicles were also included.
The government is also taking some steps to move on some pledges made in the pre-COVID world, including a climate change fund and $5 million to begin the job of making public transportation available in all areas of the province. This crisis will eventually pass and we must prepare to return to tackle these very real challenges that are now far on the back burner.
While COVID-19 was by far the biggest challenge the province has faced since the 2019 budget was tabled, as Compton pointed out, it was far from the only stumbling block.
That list included supply disruptions due to rail blockades, as well as many uncertainties on the world stage which affected global markets, pricing, and supply and demand, hurricane Dorian, school security challenges and a malware attack on the government computer system.
The minister's contention that the province's economic and fiscal fundamentals are "strong" is yet to be tested. While it may be some time before the province can return to the economic success experienced in the later part of the last decade, Islanders are no strangers to economic challenges. That resilience and hard-working attitude is needed now more than ever.
Certainly nobody should be surprised if the final budget number next spring is even larger than the projected figure. While fiscal responsibility and accountability is always important, it is safe to say there will be no jurisdiction in Canada, and probably in the world, that will be balancing the books in 20202021. This will be a year for treading water and the challenge will be to make sure we are still within sight of the shore of economic prosperity when the tide finally turns.