Health care infrastructure and housing are leading the increases in spending in another record capital budget for P.E.I.
Finance Minister Jill Burridge tabled the document in the legislature Tuesday afternoon.
Spending in this year’s budget is a big step up over last year’s, which was itself a record. The government estimates it will spend $368.8 million this year, 20 per cent more than last year’s estimate.
Record population growth is leading to increased needs when it comes to health, housing and education, Burridge said. That, combined with “a lot of old infrastructure” in the province, justifies the need for increased spending, she said.
“The pressures are intense,” Burridge told media in a lockup before the budget presentation. “We have significant challenges before us.”
560 new housing units
The lack of places to live is just one of those pressures that’s been building to a crisis point since 2019.
The province estimates thousands of units are required immediately to catch up with the current need, and more than 2,000 a year just to keep up with projected population growth in the years ahead.
The budget provides another $8.8 million for the P.E.I. Housing Corporation, a 14.3 per cent increase.
That money will create 560 new units over the five-year plan covered by this budget.
“We have to lean on private industry,” Burridge said, in response to a question about where the other thousands of required units will come from.
“The first part of the year they were slowing down, but they’re really starting to ramp up now.”
The province is continuing to bring in programs, such as the removal of HST from rental housing construction, to support industry in creating new housing, said Burridge.
Overspending and underspending
Provincial capital spending for last year is forecast to come in in well over what was budgeted last November.
There was a overspend of about $13 million. That was driven by more than $29 million in spending in the Transportation and Infrastructure Department.
Some of those extra cost were
- Paving: +$8M
- Construction and renovations on building: +$2.7M
- Bridges (including damage repair following post-tropical storm Fiona): +$6.4M
- Land purchases (for land destined for environmental protection): +$4.7M
While spending was running high in Transportation and Infrastructure, the province appeared to have trouble keeping up with ambitious building plans in health and education.
Spending in the Health and Wellness Department is forecast to be $10.1 million below last year’s estimate. This largely due to lower than planned spending on the mental health campus in Charlottetown. The province is budgeting to make up for lost time. The $53 million budget is double the estimate from last year.
Education Department spending is forecast to be $3.7M below budget, or about six per cent.
Planned spending on school infrastructure in the coming year includes new schools in Stratford, a new school in Evangeline, expansions at Francois Buoute, Queen Charlotte Intermediate and an assessment of needs at West Isle.
In total the new capital plan allocates $385 million in spending on health care facilities over five years. In the coming fiscal year, construction will finally begin on the replacement for Hillsborough Hospital, the province’s main psychiatric facility.
The plan also includes money for new community health centres in Summerside, Charlottetown and Three Rivers. Planning will also begin in the next fiscal year on a replacement for Kings County Memorial Hospital in Montague.