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Prince Edward Island’s deficit is now nearly double what the government initially estimated in April, according to the province’s fall fiscal update released Thursday.
In its 2025-26 operating budget, the governing Progressive Conservatives said the deficit would be $183.9 million.
Thursday’s second-quarter update now projects it to be $367.4 million. The total deficit won’t be known until the spring.
In a news release, the province said costs were higher than expected in a number of areas, including agricultural insurance claims related to extreme weather, health care, increased social program support funding and enhanced educational resources.
“These expenditures are necessary to fulfil our government’s commitment to improving Islanders’ access to the programs and services they need, while supporting our primary industries,” P.E.I. Finance Minister Jill Burridge is quoted as saying in the release.
“We know there are prudent spending decisions to be made that balance our key budget anchors, economic growth and support for Islanders.”
Despite the increase in spending, the release notes that “P.E.I.’s economy remains strong and resilient.”
“Overall, the P.E.I. economy is unfolding largely as forecast in April, with few direct disruptions from global trade disputes, and resilience in industries such as construction and tourism,” the fiscal update document reads.
“The changes in federal and provincial immigration policy are beginning to impact the Island as expected, with population growth slowing and employment growth easing allowing for a more sustainable growth path.”
Projected deficit was already largest in history
The province’s April deficit projection was already the largest in P.E.I.’s history, citing rising costs driven by population growth, an aging population and ongoing global trade uncertainties.
Earlier this month, the P.E.I. Green Party called on the government to release the fall fiscal update, which is typically done sometime in October.
Matt MacFarlane, the party’s leader, said at the time that he’d heard the provincial deficit could be much worse than forecast.
Thursday, he told CBC News it was unfortunate that information turned out to be true.
“Unfortunately, it shows a government that seems to be unable to… calculate the numbers and set proper budgeting, set proper forecasting,” MacFarlane said. “It’s scary information.”
Matt MacFarlane, leader of the Green Party says he is disappointed in government after his bill to eliminate sales tax on used cars did not pass on Wednesday. (Rick Gibbs/CBC)
MacFarlane also pointed to the province’s $486.5-million capital budget for 2026-27, released in the fall, as further evidence that the government needs to get a handle on its spending.
“They’re doubling down on the irresponsible spending when they should’ve known where the fiscal position of the province was before coming out with this huge capital spend.
“It seems irresponsible to continue to push this spending out now that we know the trend that the economy is on.”
Earlier this fall, the Island’s auditor general raised concerns about P.E.I.’s growing debt and deficit.
Last year’s fall fiscal update was late as well. Islanders had to wait until winter for its release. Officials said at the time the delay was due to the government’s two-month HST holiday and Donald Trump’s tariff threats.