Premier Robert Ghiz says actions have to be taken now to stem the province's growing deficit, which could be as high as $80 million this year.
Premier Robert Ghiz
[CHARLOTTETOWN, PE] — Premier Robert Ghiz said Wednesday the province's deficit will balloon even higher than expected this year and admitted he is in negotiations with the federal government over the HST.
In an interview with the CBC in Charlottetown Wednesday, Ghiz said the province's deficit could be as high as $80 million this year.
The Guardian attempted to contact the premier on the issue was told he was unavailable.
"The true situation is that this year, we're probably going to come in around $75-to-$80-million (deficit) and next year's going to be higher unless we make some decisions and that's what we're doing now," Ghiz said in the television interview.
This number is higher than the increased deficit numbers quoted in December. At that time government announced its deficit had jumped to $73.4 million, which was more than $30 million than original budget projections for the year.
The losses were mainly in the province's pension fund, which will cost the province an extra $12.8 million this year.
That why government is cutting spending between three and five per cent from all departments. Health is excluded from this cross-departmental cut, but will not be receiving the increases it needs to maintain services at status quo and will also have to make cuts.
But federal sources say Ghiz is also in negotiations with the federal government for an HST deal for P.E.I. that could potentially help offset some of the province's deficit woes.
Ghiz confirmed to the CBC Wednesday he in talks with the feds regarding HST, but would not give any details about these negotiations.
"Right now I'm waiting to find out what the final numbers are. I know our numbers are probably higher than what the federal number is. But these are negotiations, I'm not going to release that information and I've not seen any specific numbers from the federal government," Ghiz said.
Opposition Leader Olive Crane, who has maintained her belief that Ghiz has long been negotiating with the feds on the HST, says she is concerned over the lack of transparency with these negotiations.
"He was doing this last year. He never stopped negotiating the HST, it's just he's not been totally clear with Islanders," she said. "Robert Ghiz has to stop misleading Islanders and come very clear to them what he actually is negotiating on and what's on the table."
She cited concerns over the burden an HST would place on young families with a new tax added to necessities such as diapers as well as the hardships a tax on home heating fuel and electricity would cause for low-income Islanders and seniors.
An official with the P.E.I. Senior Citizens' Federation told The Guardian Wednesday the federation is very concerned over reports they've heard the HST could soon be coming to the Island. The board of directors is meeting Thursday to discuss the matter and plan their response.
"HST is a huge issue for Islanders and with the combination of government overspending... there are a lot of Islanders that this is going to impact and quite frankly, Robert Ghiz should be quite clear to Islanders what's on the table," Crane said.
As for the rising deficit, Crane blames poor spending choices. She pointed to offices at the Department of Health, which she visited this week for the first time since they were renovated in 2009 when Carolyn Bertram was health minister.
"The place is posh. It's decisions like that where the government continues to overspend and now it wants to reign in their spending problem on the backs of ordinary people. That's just not fair."
Nonetheless, Ghiz said he has not agreed to any deal with federal government on HST, but did not rule it out for the future.
"As of today we're still saying no to HST, but you know, we'll continue to look at things into the future," Ghiz said.