PEIThe P.E.I. government’s latest spending numbers are in and they’re much higher than predicted — with the province’s overall debt climbing to more than $3 billion, raising concerns among opposition MLAs and the auditor general.Province’s deficit for last fiscal year came in around $164 million — nearly $80 million over budgetBrittany Spencer · CBC News · Posted: Oct 15, 2025 5:00 AM EDT | Last Updated: 3 hours ago‘A burden on future generations’: P.E.I.’s auditor general sounds alarm on government overspendingThe P.E.I. government’s latest spending numbers are in and they’re much higher than predicted. The total debt for the province has also gone up by a substantial amount. CBC’s Connor Lamont has more. The P.E.I. government’s latest spending numbers are in and they’re much higher than predicted — with the province’s total debt climbing to more than $3 billion.That’s the key message P.E.I.’s auditor general, Darren Noonan, said he tried to get across while he presented to a legislative committee on Tuesday. The province recently released its audited financial statements for the 2024-25 budget, and Noonan said the latest numbers show the government spent far more than its original budget estimate. According to Noonan, the estimated budget deficit for the last fiscal year was set around $85 million, but the government’s actual deficit came in around $164 million – nearly $80 million more than the original estimate.”The numbers I presented were really to highlight the increasing debt,” Noonan said. “To me, it’s going to be a burden on future generations until we get a plan in place to deal with it, so I continue every year to talk about net debt so that government talks about it or thinks about it.”P.E.I.’s auditor general, Noonan says the province’s debt issue probably won’t be solved in the next few years, and the government should start with a 10-year repayment plan, which will require making some tough decisions to save money. (Legislative Assembly of P.E.I. )One of the biggest contributors to the province’s growing deficit is overspending by $57 million at Health P.E.I. on resources like travel nurses and private nursing home subsidies, Noonan said. The province also lost out on $65 million in sales tax revenue, in part because of the federal government’s tax holiday — a two-month GST/HST holiday that ran from December to February and was touted as a way to give Canadians a break on the cost of some essential goods.“That’s a huge amount of revenue to lose. That’s not a decision that this government made, but it still impacts the finances of the province,” Noonan said. The province did get a $67 million boost from a landmark settlement from tobacco companies for the recovery of healthcare costs across Canada. But Noonan said this payment wasn’t part of the province’s original budget, and can’t be counted on as regular revenue. “That’s really just a one-time windfall for the province,” he said. “The actual operating deficit, if we back that out, would be about $231 million, which is quite substantial and significant.” Overall debt continues to climbAll of this has a big impact on the province’s overall debt, which now sits at just over $3 billion and has been on a steady increase over the past five years. According to Noonan, the net debt sat at just over $2.2 billion in 2021. Noonan said the main contributors to this ballooning debt are the annual deficit the province has been carrying and spending on capital assets, like projects to build roads and schools. Ultimately, the province is spending far more money than it brings in, and he said he’s concerned about who will pay for the debt, and when. The concern is there’s no plan to repay the debt.- Darren Noonan, Auditor General of P.E.I. “Our debt still continues to grow even in those years of good economic times. So my concern is what happens when those good economic times aren’t as good as they are and there’s no plan in place to deal with the debt,” Noonan said. He said he also has concerns about how this increasing debt could impact the province’s bond rating, and he’s requested a meeting with bond raters to find out what factors could lead them to reduce P.E.I.’s rating. ‘It’s pretty shocking’Speaking with reporters outside the committee meeting, PC MLA Susie Dillon said it’s important that the government make good financial decisions while also keeping up with how quickly P.E.I. is growing, and the need for more infrastructure and services.”I think we’re always concerned when we talk about deficits, and it’s important to be mindful of it and to keep aware and continue to ask questions as part of our committee,” Dillon said. Opposition MLAs said the government needs to take the growing debt issue more seriously and needs to come up with a plan to fix it.Green MLA Peter Bevan-Baker says he was shocked to see the spending numbers shared at the committee meeting, and wants to see government present a plan to tackle the debt right away. (Connor Lamont/CBC)”It’s pretty shocking,” said Green MLA Peter Bevan-Baker. “I’ve been an MLA now for over 10 years and you sort of, almost get numbed to the repeated news that our deficit is growing. But this year, particularly, was a really bad year, fiscally.”“It’s so important that we do not hand over unmanageable debts to future generations… we just absolutely have to get this under control, there’s no other way of saying it,” Bevan-Baker said. Liberal MLA Carolyn Simpson said she left the meeting with concerns and questions, and she wants answers.“How will we ever continue to carry this? Will this affect our bond rating? Will it cost us more to pay our debt back?” she said.Liberal MLA Carolyn Simpson said she understands the need to spend money to provide services for the growing number of Islanders, but as the population grows so should tax revenue. She said government needs to take a harder look at how the current deficit got to where it is. (Connor Lamont/CBC)”It’s time for us to get a handle on our spending and have a plan to re-pay our debt. I’m not suggesting we don’t spend because of course you have to spend, but you need to spend in the right places,” Simpson said.Noonan said looking to the future, the debt issue probably won’t be solved in the next few years. He said the province should start with a 10-year repayment plan, which will require making some tough decisions to save money. ABOUT THE AUTHORBrittany Spencer is a multi-platform reporter and producer with CBC Prince Edward Island. She’s covered politics, health care and the justice system. She’s a graduate of Toronto Metropolitan University’s journalism program and joined CBC in 2017. You can reach her at brittany.spencer@cbc.caWith files from Connor Lamont
P.E.I.’s auditor general says province needs a plan as net debt passes $3 billion
