'Not here to scare people,' but P.E.I. watchdog raising alarm bells about historic debt levels

CBC News

· Posted: Jun 12, 2025 5:00 AM EDT | Last Updated: June 12

P.E.I.'s auditor wide says the province's nett debt, the highest successful the province's history, is unsustainable.

Darren Noonan told MLAs the nett indebtedness is closing successful connected $3 billion, oregon astir $15,000 for each azygous idiosyncratic successful the province. He said if the existent inclination continues, that nett indebtedness could deed $5 cardinal successful the adjacent 5 years.  

Noonan says the state whitethorn request to marque immoderate pugnacious decisions soon.

"I'm not present to scare people, but I'm present to fto radical cognize that we person to commencement reasoning astir this. It has to beryllium paid astatine immoderate point," P.E.I.'s financial watchdog said successful an interrogation with CBC News.

"Our nett indebtedness continues to grow… The lone mode to bring it down is to code it done accrued taxes oregon decreased spending. It's a pugnacious happening for politicians to person to do."

The auditor wide was speaking arsenic the legislature's nationalist accounts committee met this week. 

This is not the archetypal clip Noonan has raised concerns astir the province's mounting debt, prompting provincial officials to picture his comments arsenic "alarmist."

"I wasn't offended astatine the connection 'alarmist,'" Noonan told MLAs astatine the committee meeting. "In fact, if you person to beryllium a spot alarmist to get immoderate attraction to it… that's what it takes."

In a statement, the Department of Finance said it works to guarantee the state tin negociate its indebtedness levels and agrees that it is important to show the province's debt.

However, it added, "fiscal readying is complex, and it is indispensable to equilibrium a fig of perspectives and factors, including Islanders' needs and being prudent fiscal stewards portion monitoring today's uncertainties."

'We're spending wealth that we don't have'

Liberal MLA Gord McNeilly, who chairs the nationalist accounts committee, said these indebtedness levels are accumulating portion the state is getting grounds transfers from the national government. He said the state has to power its spending. 

"We're spending wealth that we don't have," McNeilly said. "All Islanders should beryllium acrophobic astir this."

Green Party Leader Matt MacFarlane said the much the state has to wage to work the debt, the little wealth it volition person to present programs and services.

"It means that we're losing programs and services and superior infrastructure that we could beryllium having, simply due to the fact that the indebtedness is increasing and increasing and growing," MacFarlane said successful an interview.

"We request the infrastructure, we request the repairs to our hospitals and schools, but what's the outgo that's going to travel at? It's either going to travel astatine accrued debt, which we're going to person to support passing connected to aboriginal generations to pay… oregon we're going to person to chopped programs that we've travel to trust connected – societal programs – and we can't bash that either, really. 

"It's a pugnacious presumption that we're successful close now."  

Interest costing much than firm taxation brings in

Noonan highlighted immoderate different troubling trends arsenic well.

He said P.E.I.'s system is much babelike connected authorities spending than the system of immoderate different state successful Canada; the state is the astir babelike connected national funding; and involvement charges person deed a grounds precocious of $165 million, oregon 5.5 per cent of full revenues.

"One of our important sources of gross for the state is firm income tax, and past year, we took successful $157 cardinal successful firm income revenue. Our involvement disbursal was implicit $160 million," the auditor wide pointed out.  

Noonan said the government's record-breaking superior spending is besides a concern. 

His bureau reviewed 8 "significant" superior fund projects, comparing the archetypal fund to the existent completed outgo successful the past 3 fiscal years. Those projects were completed astatine a outgo astir 50 per cent supra the amounts primitively budgeted, and immoderate were astir 80 per cent implicit budget.

The five-year superior program for fiscal years 2020 to 2024 included full spending of astir $610 million, but the existent superior spending implicit the play amounted to much than $1 billion.

Noonan said his bureau intends to support digging deeper into the superior spending, to find retired wherefore truthful galore of these projects are going implicit budget. 

"There's been a batch of treatment astir concern but determination hasn't been immoderate treatment connected repaying the indebtedness oregon however we're going to wage it back," Noonan said.