PEI tables deficit budget – Investments in youth, healthcare

Member Update / Impact

On February 24, 2022, the PEI government tabled its 2022-23 budget.  The budget features a number of new investments in youth and health care while also increasing the basic personal exemption for income tax.  The Island’s economy is moving beyond the pandemic and forecasting strong growth.  The government will increase program spending by two percent for the upcoming fiscal year as it helps stimulate economic recovery.  However, this spending will move the province’s projected deficit to $92.9 million.  In 2021, the deficit was only $24.4 million.

Background

Of interest to retailers:

• The government will implement a new tax on vaping products and an increase in tobacco taxes.  Details TBC.
• $787,000 to provide free school supplies for the 2022-23 school year to all students from kindergarten to Grade 9.
• $200,000 for KidSport funding which will provide eligible households (total income of less than $60,000) with up to $600 per child to help pay for sports registrations, memberships and equipment.  This is an increase of $200 from the previous program.
• $500,000 in funding to offer $100 rebates towards the cost of purchasing a new bicycle in 2022.
• $1.5 million in funding will be provided to cover the cost of providing free ridership on public buses for anyone under the age of eighteen.
• Increased funding to cover the costs in providing a free shingles vaccine to Islanders 65 years of age and older.
• $5.6 million to increase the income threshold that qualifies Islanders for a free heat pump.
• Increasing the Basic Personal Amount to $12,000 before an individual must pay income tax.
• Funding for the construction of affordable housing units and existing home renovation assistance.

Although not part of the budget, it should be noted that as of January 1, 2022, the province’s small business tax rate was lowered to 1%.  This is the lowest small business tax rate in the Atlantic region.

The province’s population continues to grow and it currently sits at approximately 165,000 people.  The province’s economy remains strong with solid growth expected to continue throughout 2022.