P.E.I.'s 2020-21 budget deficit comes in $167M below initial estimate

What was once forecast to be a record deficit of $173 million for the 2020-21 fiscal year is has instead landed at $5.6 million, according to audited financial statements released by the P.E.I. government Friday.

After boosting spending across almost every department in response to the COVID-19 pandemic, in June 2020 Finance Minister Darlene Compton projected the record deficit.

By March 2021, however, Compton revised her deficit projection to $120 million — out of record-breaking territory. 

Friday, as part of tabling the province's full public accounts, Compton revealed the final deficit of $5.6 million. 

"This reduced deficit results from higher than anticipated revenues due to stronger than expected revenue from provincial taxes and federal government transfers," a government release stated. 

The province received an additional $88 million in revenues and saw decreased expenses for a variety of reasons, including increased accessibility to federal programming for COVID-19, the release said. 

Provincial tax revenues came in $76 million higher than budgeted, including income tax revenues that were $52 million over budget.

Personal and corporate income taxes were pushed up "by the high participation rates in federal programming supports for Canadians throughout the COVID-19 pandemic," the release said.

Meanwhile program spending came in $105 million lower than anticipated.

The latest estimate for the 2021-22 budget is a $112 million deficit, projected in March 2021. A three-year plan presented with the budget at that time projected the annual deficit falling to $27.9 million by 2023-24.