Running out of Money

The Prince Edward Island deficit, CBC reports, was $83.3 million last year.

This is roughly $850 for each registered elector, and about $1,000 for each employed person.

As at the last budget, PEI’s debt was $1.16 billion. That’s about $11,000 per elector, and about $14,000 per employed person.

Our budget for this year requires about $90 million to pay interest on the debt.

It strikes me that I’ve never heard anyone in Prince Edward Island, politician or no, suggest any mechanism by which we’re going to pay this money back to the people we owe it to. It’s like a giant unspoken impossibility. That will go on forever.


Marcus's picture
Marcus on January 26, 2004 - 06:08 Permalink

* PEI is running very red

* NB is closing rural hospitals in Carelton & Victoria counties while building massive expressways to the Maine & Quebec borders

* rural NS (yes, outside of Halifax), unemployment is up up up & Cape Breton faces continuous outmigration with no sign of it slowing down

* NL is facing unprecedented reductions in gov’t spending to bring things under control & outmigration continues as well

In other words, not much has changed for Atlantic Canada in 20 years of Mulroney/Wilson/Mazankowski or Chretien/Martin — Martin/Goodale.

A few megaprojects & hollow promises. Regional cabinet ministers sucker us every time with promises of jobs & buying the electorate off.

Central & Western Canada’s burgeoning population continues to give it more clout as we slip into the oblivion of the Rest-Of-Canada’s collective conscience.

Equalization reduces, infrastructure crumbles, education & health care suffer, young people move away…

Chris's picture
Chris on January 26, 2004 - 16:08 Permalink

I Couldn’t agree more.
While we do have a deficit problem, I think if anyone looks into it, the problem was not created by Maritimers. Central and Western Canada can grow their economic prosperity by increasing population.
There are 3 easy ways to do this, new Immigrants, take existing population from Sask/Manitoba, take population from Maritimes, or increase the birthrate. The easiest is to take existing population, as this is exactly what they are doing.
Ottawa has to change its thinking, but who’s going to do that? The 4.5 million people in Saskatchewan/Manitoba/New Brunswick/Nova Scotia/NFLD & Lab/PEI? I can’t see it happening.

Ken's picture
Ken on January 26, 2004 - 17:42 Permalink

What about the deficit? was an issue once on the public mind after Reaganomics left it’s massive public debt behind, Mulroney took Canada down the same path.

That nerve is dead now, people are in denial or just don’t care about something abstract that politicians created. So the door is open again — political opportunity to spend in the red.

It will catch up to us.

Canadian cities take people (what value is a talented, mobile worker?) from rural areas, this is the reason no guilt is required that we maritimers recieve federal funds.
Personally I wish Immigration Canada directed ALL new immigrants to places rural, that dynamic is missing here.

We are the dry bracts that remain from mature grains of wheat blown west to Montreal, Toronto, Vancouver.
The grass is greener there.

Alan's picture
Alan on January 26, 2004 - 18:19 Permalink

It is surely not going to be taken as a principle of discussion that “Maritimers did not create this problem” nad that “no guilt is required that we Maritimers received Federal funds”. As a Maritimer working in Ontario — again — my position in that equation would be something like “try to make a go of it, get better opportunity but effectively continue paying taxes in former province(s) of residence”. No thank you.

Surely there must be some accountability for the Buchanans of NS and the Mellas of PEI — especially where there are admissions by the same political parties that there was simply uncontrolled overspending. Such a statement is not a partisan comment just a reiteration of Mitch Murphy’s comments.

Sure there ought to be an adjustment in transfer and fair treatment on off-shore gas royalties. But where do you think the bulk of transfer money comes from — fairy land? The roughly 58% provincial top up on income tax in PEI should go up and other taxes increased and expenditures cut — then talk to the rest of Canada. Do your part. There has to be some relationship and accountability to mismanagement of funds there  — just as there will have to be here thanks to Ernie Eve’s 7.8 billion dollar leftover debt. Unless you have a better in with the magic elves than appears to be the case around here.

And that is apart from the questions raised by Toronto which alone sends out 9 billion more than it receives under the current model. Is that fair?

Walter's picture
Walter on January 26, 2004 - 18:53 Permalink

I don’t think that Atlantic Canada can continue the way it is.
You will have to seriously look at consolidating into one province. Jeez Toronto alone is twice as big as PEI. The rest of Canada cannot continue to carry the debt of the region. Emotionally you may think one way, but realistically

Chris's picture
Chris on January 26, 2004 - 18:58 Permalink

I agree with your point.
However my statement had nothing to do about transfer payments. It is about investment in people and regions, and until the view of the Maritime region changes in the eyes of the Upper Canadian politicians, we are fighting a battle that will be hard at best, to win.

Ken's picture
Ken on January 26, 2004 - 20:42 Permalink

Alan, what about the cost of raising children and educating them paid by maritime parents? This labour of love is an investment lost when the children leave to contribute to an economy far away from PEI.

We invest in Toronto’s future, at no cost to Toronto schools, hospitals, parents every time our children leave to work there…children we’ve invested A LOT into!

And a lot of talented productive children are gone, after PEI families and social structure invested 18 years or more into them.

This is a deficit known as brain drain, and we suffer for it here in PEI, while Toronto flourishes from it.

Where were you raised?

Ken's picture
Ken on January 26, 2004 - 20:54 Permalink

Walter, seriously maybe Ontario needs to split into smaller provinces.

How about one called METRO including Toronto and to the south.
The other called JUST LIKE THE MARITIMES — north of Toronto.

Seriously, I don’t think METRO could continue to carry the debt of that region either.

Fortunately we have one large country called <font color=”RED”>Canada<font color=”BLACK”> which resolves all of these differences.

Ken's picture
Ken on January 26, 2004 - 21:07 Permalink

It is surely not going to be taken as a principle of discussion that “Maritimers did not create this problem”

Yes, Maritimers created the debt while Ontario flourishes from our lost talent. Will you please acknowledge that.

Every maritimer who leaves to work in Toronto should bring their share of Maritime debt ($14,000?) with them as a transfer to the province of Ontario’s budget deficit.

Atlantic Canada as one province — how about one Atlantic Canadian country. And a new tarrif on access to St Lawrence seaway!

Ken's picture
Ken on January 26, 2004 - 21:09 Permalink

Also, I am running out of money trying to make a living here in PEI and will probably end up in Toronto in a year or so.

Alan's picture
Alan on January 26, 2004 - 21:10 Permalink

If you want to entertain the investment in rearing, then are you going to deduct for the premier, much of CBC and all the professionals who work in PEI but were born in the rest of Canada. Not to mention those who move what are not productive but, say, end up in jail in another province. That analysis has to stand up to auditing.

On the other point, Ken, it would be interesting to divide Ontario it would be either into three or four. Barrie south to Toronto from Ajax to Oakville as “Metro”, West of Barrie “The South”, East of it “old Ontario” and above Barrie The North. East and North could be one. But to what end? There would still be the net transfer out of the group and a failure of Atlantic Canada to self-assess towards self sufficiency.

Here is the real question: why ought PEI not fall to the fate of Cape Breton, depopulated and living on what it earns? What is the economic difference? If it is only a status argument — provincial status says the Island is inherently owed — you are in for a continuingly cool reception from Federal Finance Minister Goodale.

Chris's picture
Chris on January 26, 2004 - 21:52 Permalink


You seem to think that Toronto was made all by itself and not with the help of the rest of Canada, we just hold it back.

Toronto has gotten so big it doesn’t need the rest of Canada now……………..hhhhhmmmmmmm, this reminds me of another state/country. ;-)

Alan's picture
Alan on January 26, 2004 - 22:05 Permalink

I don’t know what that means, Chris. Is there an unpaid moral debt somewhere owed to Atlantic Canada that is never possible to be paid out? Does it absolve the provinces from administering their fiscal affairs lucidly? That is the important thing at the moment — where funding for the deficit and debt will come from. I know my VISA card doesn’t include a set-off for the dramatics of my moral stance.

Ken's picture
Ken on January 26, 2004 - 22:20 Permalink

I prefer to send only criminals to Ontario, keep lawyers here ;)

Halifax is Cape Bretons Toronto, drawing what they want from it (coal, people, culture), rejecting the rest.

The depopulated dead zone you always invoke, would that be dotted with thriving cities as it is now? No, the nation would suffer along with Cape Breton, Acton, and Tignish.

In short sir, we float your boat.

It is a false dichotomy to seperate a nation by it’s budgets — municipal or provincial. They reflect political regions.

Take your CBC, and the CRTC with it. I’ll be on the air within a week, and what I broadcast will not reflect some producer in Toronto’s worldview.

A PEI free to negotiate nationally with France, US, Japan and the remainder of Canada would have advantages — I would vote to realize them if given the chance. Besides the cost of raising workers for Ontario, factor in the cost of soothing our nationalist desires. You laugh?

Stop the transfers of cash to us, we’ll do the rest.

Mark Hemphill's picture
Mark Hemphill on January 27, 2004 - 01:24 Permalink

wow…this has been interesting so far.

Are we using the right measuring stick here? I don’t think we can call a winner in an argument like this until someone can look back, say, 200 years from now.

Here’s my 2 cents. PEI’s deficit was 20 million, then it’s $83 million, and last I heard is was more like $50 million. Between the expectation setting that goes on between the provincial government and constituents, the negotiating that goes on between levels of government, and plain out posturing, misfiguring, and fudging — the numbers start to mean a whole lot less. Anyway, guiding through these matters requires a moral compass as well as a calculator.

For all the so-called riches of Southern Ontario, they have a huge social deficit and a crumbling industrial complex (that’s already overflowing with environmental malaise and whose regular maintenance, daily hazards and eventual disposal depend on public monies). This includes the cost of a machine-like cyclical approach to work that leaves, for all but a few, little time and little extra money for real living. These are the problems that people in Southern Ontario should be dealing with and Atlantic Canadians aren’t the ones to blame for them. The tax breaks handed out on Bay St. last week could pay of our entire provinical debt. Now that doesn’t mean we aren’t accountable for our own finances….but perspective is everything.

I recently returned to the Island after ten years in Toronto (and a brief sojourn to San Francisco) and I am so far really enjoying it. One of the reasons I’m enjoying it is because I’ve seen some positive changes. Lots of those young brains in fact aren’t leaving (which I pleasantly discovered). Lots of them are coming home. Lots of them are coming to visit, liking what they see and feel, and are staying. We are becoming a haven for corporate drop-outs. Certainly, we are not a region made up exclusively of farmers and fisherman anymore. I believe that we have to be our own fiercist critics, I do. But let’s not let old sterotypes and old measuring sticks taint our view of the future.

Chris's picture
Chris on January 27, 2004 - 01:57 Permalink

Funding for the debt will come when the rest of Canada stops with its false view of the Maritimes. This will bring more investment to the region thereby creating a larger monetary base.
If this view does not change, Atlantic Canada will continue to lag.

Marcus's picture
Marcus on January 27, 2004 - 04:15 Permalink

I have the solution to all of PEI and the Maritimes’ economic problems — Canada needs to build a military industrial complex similar to the US and former USSR.

Just look at what DOD spending did for states such as Alaska (oil notwithstanding), Wyoming (ditto), Idaho (well, dept. of energy there), Montana, the Dakotas — heck even tiny Rhode Island and Delaware have/had large military bases there. Aroostook County, Maine was largely modernized since the 2nd world war as a result of Loring AFB.

The Kamchatka Peninsula would be all but depopulated if it wasn’t for the Red Navy & Soviet AF presence.

Canada should have tripled or quintupled the number of bases back in the 90’s, rather than cut them back. That way defence spending becomes an indirect transfer payment, just like US social policy is done. How would upstate NY fare without Ft. Drum, or Omaha without Offutt(sp?), etc.

We should have kept CFB Summerside, then had expanded naval presence in most major ports in eastern Canada — Sydney, Shelburne & St. John’s all had naval stations at one time. Bases in Cornwallis, Moncton, Chatham, St. Margaret’s, Barrington, Mill Cove, etc. and even the US ones in Stephenville & Argentia shouldn’t have been shut down….

/in jest!….

Ritchie Simpson's picture
Ritchie Simpson on January 28, 2004 - 03:40 Permalink

Let’s be a little realistic about the nature of the provinical debt; first of all it is not created by corruption or by poor decisions by provincial governments; although there is some of that it is generated by economies that cannot support the level of service demanded by the populations they serve. The cost of Health Care alone in PEI is $340,000,000 per year(btw 176 doctors alone get about $50,000,000 of that, yes yes it pays for their offices too yadayadayada). Federal government after Federal Government pledged to insure a relatively even level of service delivery across the country and still do yet the PMO and the Cabinet let the Civil Service play cute with the fiscally weaker provincial governments in order to achieve the broader goals of Dept of Finance and to make the Gov of the Day look good. This is what pols and bureacrats do.
From the day this country was formed the powerful provinces of Que and Ont have had a continous stream of beneficial government policy bolster their economies at the expense of the East and the West; it started with John A’s National Policy and it continues today with things like RRSP. RRSP’s you say whatever could you mean? the last time I looked PEI contributed something on the order of $90,000,000 annually to their RRSPs, the vast majority of this cheap investment capital goes to benefit the economies of the have provinces.
We have been victimized by base political realities and the solution is not to shrink the region’s provinces or population to fit the economy but for the Federal Government to make wise and fair policy so that all Canadians can enjoy eqally the benefits of being Canadian Nobody owes a us a living but its not our fault and we shouldn’t have forfeit our heritage because of it and we shouldn’t have to sit in the back service delivery bus because of it either.
However if it means Alan is in Ontario we can forgo $1.98 of transfer payments

Ritchie Simpson's picture
Ritchie Simpson on January 28, 2004 - 03:46 Permalink

I would also like to put my vote in for splitting up Ontario, as well, I think we should sell Toronto to the Americans for say $50,000,000,000Can and split up Que while we are at it.
But what I really like to dream about is for the Maritimes and Newfoundland to leave Confederation; could it really be any worse? All the Fed Tax money stays, all that RRSP money stays, we make economic decisions that reflect our reality not Alberta’s……hmmmmm how bad could it be?

Ritchie Simpson's picture
Ritchie Simpson on January 28, 2004 - 03:47 Permalink

here is some punctuation to throw into missive #1 „,….:::!!;;;

Ken's picture
Ken on January 28, 2004 - 17:44 Permalink

Peter, you’ve ignited a seperation movement!
Other issues that come to mind:
The empty federal buildings — lease them as world trade centres and embassies to represent foreign governments such as Canada, US, France.

Three provinces instead of counties, each with a capital.

Fishing Rights! Fishing Rights! Fishing Rights!

Two international airports!

Offshore banking legislation.

Trade deals with european’s instead of NAFTA, what would we lose since potatoes and beef haven’t been sold to the US for years!

Peter, you should start a new sub-blog to investigate and discuss all the possibilities.

What does it take to have a referendum?

Ken's picture
Ken on January 28, 2004 - 18:23 Permalink

Letter to the editor
Our Island as a Nation
Farmers, Fishers, Islanders  — our oldest industries are at a low point, we are more dependant on Ottawa than ever and more than ever our destiny is in central Ontario

Marcus's picture
Marcus on January 28, 2004 - 21:07 Permalink

Interesting that several things seem, to me, to have driven provincial deficits (and debt) up in recent years.

When Chretien/Martin were elected in 1993, Martin decided to tackle the federal deficit. How did he do this? Transfer the costs onto the provinces, who transfer it to municipalities/citizens, & municipalities then transfer the rest onto property owners. I have to wonder about those big real-estate booms in larger centres with assessments getting ever larger — will there always be a population to drive the demand there, even after the boomers are in nursing homes and property taxes are through the roof?

- in the early 90’s many federal gov’t accountants/economists realized the burden of health care funding and the demographics of the baby boomers wasn’t going to help in the 2010-2030 period

- also med. schools made a decision at about this time that there was an oversupply of doctors so admissions were more restrictive for several years, this came back to bite us obviously. Another problem is the restrictive regulations imposed by colleges of physicians & surgeons across Canada on foreign-educated doctors

- prior to 1993 there were separate federal transfer payments directed to health care, post-secondary education, welfare & other social programs, etc. and there wasn’t a lot of hay made about it by the provinces, so obviously it was sufficient/adequate to get the job done (remember the days of cheap(er) tuition?

- Martin & co. @ fed. finance decided the sum of the transfers was too great, or would grow to be too much in the future, given the demographics, so to avoid a messy political image problem for Chretien/Martin, they decided to “roll everything into one lump sum payment” (reduced somewhat from the overall total) — this is now called the Canada Health & Social Transfer (CHST)

- provincial gov’ts don’t care too much about post-sec students (who will supposedly become future wealth generators) & welfare recipients (who continually drain money — their thinking, not mine), so with free reign on this CH&ST money (as opposed to before when it was directed), more went into health care, less to universities & colleges, social programs, etc. & coupled with the rising health care equipment costs & technology, doctor salaries, outdated hospital infrastructure, retirings & subsequent patient abuse of emergency rooms from not having family doctors…. you get the present mess where provinces don’t have the money to resolve all the problems

- Chretien/Martin picked up where Mulroney/Wilson/Maz left off in keeping the GST (Chretien/Martin merging the GST & PST in NB-NS-NF through strong-arming those liberal gov’ts at the time with threats & promises) GST has been a boon to Dept. of Finance — friend of mine works @ S’side TC & she gave me a # one time of the total they pull in a week at that one centre & it’s multi-billions

- Chretien/Martin also privatized airports, seaports, CNR, avoided buying major purchases like ship-borne helicopters, undertook major program reviews for federal civil service which was cut/frozen for most of the 90’s — you name it

- BUT, here’s the kicker — Atlantic Canada accounts for 8% I think (was 10%) of Canada’s population & we bore the brunt of almost 30% of Ottawa’s cutbacks under Chretien/Martin, a large part of that being base closures and reductions in transfers (by adopting CH&ST, etc.) without corresponding programs to counter these effects… DND accounts for largest fed. spending & they took it in the nose during the 90’s

I agree on the discussion re. RRSP’s. A friend of mine in the GTA, well her family somehow knows the guy who created CI Mutual Funds & they apparently give very aggressive sales pitches here in Atl. Canada because they know we hoard money & don’t consume in big box stores like the other provinces (at least not as much — go to Halifax or Moncton somedays and you’d think not).

Harry Baglole & David Weale might have some input on independent island nations’ economies…

Rusty's picture
Rusty on January 28, 2004 - 21:45 Permalink

Indeed, the Small Island Institute at UPEI could give us some guidance in relation to the pursuit of distinct policies for the benefit of the citizens of the jurisdiction. That may not necessarily mean independence from the rest of Canada, but rather using our own legislative mechanisms to achieve our own goals. The term for this is the “gift of jurisdiction” and has helped the Cayman Islands, Ireland, Iceland and a few other small Islands around the world to prosper.

Ken's picture
Ken on January 29, 2004 - 00:58 Permalink

Jurisdiction, I like it. Could we have jurisdiction over immigration, the ability to search for and invite talented immigrants to live and stay here, without the option of going to a big Canadian city. Their residency would have a PEI jurisdiction only.

Does anyone know if PEI gets new immigrants at the same rate as the rest of Canada? I’m tired of the same old faces, and would love to have lunch in Chinatown, visit a bookstore in Little Poland, or walk the Brazillian district of Charlottetown.

My tastebuds are grateful for Cedar’s Eatery et al, and there’s much more to this notion than just restaurants.

Marcus's picture
Marcus on January 29, 2004 - 06:32 Permalink

Jurisdiction issues are raised in Tim Carroll’s monologue on Ideas back in July 2000 called “Sovereign Islands.”


Sovereignty (2000) $26.00, 2-pt “Micro-states” CBC Radio Ideas, 5 July 2000

What is the “right size” for a nation? What counts most

Rusty's picture
Rusty on January 29, 2004 - 14:15 Permalink

Quebec has had its own deal on immigration for ages.

Ann's picture
Ann on January 29, 2004 - 20:02 Permalink

PEI does have its own deal on Immigration as do all provinces now.
Here on PEI we have a provincial nominee program which allows us to fast track a certain number of immigrants who can brings skills or businesses or investment to PEI.

There has always been a big problem, not attractuing immigrants but keeping them. What people are often looking for is a critical mass of other people who are from their home country…the Chinatown or little Poland that Ken is looking for. That is beginning to exist for some cultural groups here…but not enough to make this a really attractive place for enough groups.
But if you are worried that people aren’t paying attention to the fact that immigration could help this province, worry no further.
As a matter of fact, they have been looking for a replacement for Alan ever since he moved to Kingston. :-D

Alan's picture
Alan on January 29, 2004 - 20:08 Permalink

With it being over ten months now, I can only sympathize with your enormity of the task you face, Ann. On the upside, the problems with storm surge and the coastal areas have gained a cruical one or two tenths of an inch of relief with my departure.

Dex's picture
Dex on January 30, 2004 - 20:24 Permalink

Perhaps Wilbur MacDonald can be the newly independent PEI’s ambassador to the United Nations. Ken, I’ve lost track of the number of Islanders who’ve told me how heartily they agree with Wilbur’s views on Mexicans, West Indians, and other inappropriately coloured people. One wonders if Wilbur and his admirers feel this way about the Mexican and Jamaican migrant workers PEI now imports to do agricultural work. Look, it’s not just lack of opportunity that keeps immigrants away. The fault lies not within our stars, but in our Wilburs.

Ken's picture
Ken on January 30, 2004 - 22:56 Permalink

Wilbur MacDonald, known to me only by his racist rant in the legislature, was just an embarrassement. However, after being rallied behind, re-elected and admired he has now become the David Duke of PEI. Pat Binns did not need Wilburs seat in the house to keep his majority (he held every seat but one) so why did he go so lightly?

Mr. Binns has created in Wilbur a hero to racists.

For the record, from Hansard, 2002-04-19:

Speaker: The Honourable Member from Belfast -Pownal
Wilbur MacDonald (PC): Thank you very much,
Madam Speaker, I rise too to talk about this Resolution.
I think we were all shocked last week when we read of
the Supreme Court s decision. It seems to me, Madam
Speaker, that the Charter of Rights and Freedom

Dex's picture
Dex on January 30, 2004 - 23:44 Permalink

Ken, thanks for your public service in posting Wilbur’s shameful speech of April 19, 2002. Too many people either agree with his ravings or make excuses for them (he was “misunderstood,” was “misquoted,” he “misspoke,” etc). When you see the Hansard record, his meaning is very clear indeed. More shocking is that his colleagues are recorded helping him out on details, and their applause is recorded at the end of the speech. That day in the legislature, nobody said a word to contradict him. Since then, as you say, he’s been hailed by shocking number of people as a homegrown hero. God help us.

Ken's picture
Ken on January 31, 2004 - 00:14 Permalink

They shall be judged by their
George W. Bush

Mark's picture
Mark on February 5, 2004 - 12:21 Permalink

Just thought I’d mention what I saw on the Island News Direct TV channel….

Tyne Valley’s Ken Williams
asks the burning question:
“Why not take destiny in our
hands and become a small
force of a nation?” Ken says
we won’t miss NAFTA, our
produce is banned in the USA
anyway, and we could fish
without RCMP intervention.

How did this happen? Was your letter to the editor was picked up?

See the message on their online billboard here.