You have to wonder who is in charge of PEI’s finances. In theory it’s Finance Minister Wes Sheridan. He broke news to Islanders that our budget deficit has soared $30 million to a whopping $73 million. It is quite possible the deficit could hit $100 million by the time the fiscal year is complete March 31.
In breaking the news just prior to Christmas the finance minister took a typically positive approach. He bragged that the Island’s deficit as a percentage of the total government budget of $1.5 billion is reasonably small in comparison to other provincial deficits.
It’s a form of logic we’ve heard before from Island governments not prepared to deal with fiscal realities. It’s also a form of logic that fuelled the current crisis unfolding in Europe.
As a province we are not in that danger zone. Yet. But we are on an inevitable course toward losing the ability to make financial decisions ourselves. It will happen. It’s just a matter of when. And the reason is successive Liberal and Conservative governments have failed to deal with our debt and deficit. They have each added hundreds of millions of dollars to the tab, which now stands at a mind blowing $2 billion.
It is a debt we simply cannot repay because we have neither natural resources nor a significant manufacturing base. Our economy is based on one thing: government money.
Sheridan promised a controlled approach to the ever-swelling deficit. He committed the province will still return to balance in 2014, something he said would occur without cutting programming.
Well, that promise didn’t last long.
No sooner had Sheridan said that, than Premier Robert Ghiz undercut his authority by proclaiming in year-end interviews that programming, with the exclusion of health care, will be cut three per cent. We already knew jobs would be lost, although like the premier’s programming decree, it is hardly strategic.
The administration hopes to reduce the size of the civil service through attrition. It is a strategy that has failed in the past. In fact it has already failed the Ghiz government. While there is a small reduction in the size of the official provincial civil service there is a corresponding massive increase in spending on consultants and contract workers. In some areas consultants have replaced full time government employees in management positions.
It is possible Sheridan simply was offering a public diversion, however, that is unlikely. It is hard to imagine him publicly stating programming will not be cut knowing the premier would soon announce the opposite in year-end interviews.
More likely this is yet another example of the premier and his fifth floor office exerting absolute control and in the process embarrassing the provincial finance minister.
Regardless it is yet another example that the Liberals are simply irresponsible stewards of our finances.
Many will say “where should cuts be made?” Clearly in a province so reliant on government jobs it is impossible to trim programs and services without upsetting people. For starters look at duplication of services. This can be found in spades in areas such as education administration. But there is an even bigger pot of savings to be had in merging the provision of services with other provinces. PEI does not need a liquor commission except that it is a tried and tested tool for the delivery of patronage.
As a province we have spent tens of millions on health related items such as the cancer treatment centre, which has provided often spotty results and more importantly is an investment of questionable validity given our small size. The tens of millions we spend on consultants and contract employees is an obvious place to find savings.
As a province we need to have a discussion about provincial priorities and how we intend to pay for them. We can continue to ignore the very real issues we face, but in doing so we only imperil our children’s future and risk the very future of our province.
Paul MacNeill is Publisher of Island Press Limited. He can be contacted at paul@peicanada.com