Taxpayers: Islanders need a debt plan, not a debt committee
The Canadian Taxpayers Federation is calling on Premier Rob Lantz to pay down Prince Edward Island’s debt instead of studying it, after the Lantz government launched a new debt advisory committee.
“P.E.I. doesn’t need a committee to manage its debt, it needs a government with a plan to pay it off,” said Devin Drover, CTF Atlantic Director. “Here’s some advice for free: Stop borrowing and start paying it back.”
The Lantz government launched the Debt and Risk Advisory Committee last week. The committee’s targets are focused on managing the debt rather than paying it off.
The committee’s main target ties debt to the size of the economy. That means the government can keep borrowing hundreds of millions of dollars every year and still hit its target, as long as the economy grows.
“A family with a maxed-out credit card can’t tell the bank everything is fine because the neighbours got raises,” Drover said. “Taxpayers don’t pay interest with ratios, they pay with real dollars taken off their paycheques.”
This year’s budget includes borrowing a record $410 million. That borrowing will push the province’s debt up nearly 20 per cent in a single year, with $1.3 billion in added debt planned in the next three years.
Debt interest costs will take $201 million from taxpayers this year. That’s about $1,100 for every Islander.
Auditor General Darren Noonan has been sounding the alarm about provincial debt for years. His latest report notes the Parliamentary Budget Officer rates P.E.I.’s finances as unsustainable.
“Escalating net debt puts a tremendous burden on future generations, and increases in interest costs associated with rising debt levels will take money away from programs and services that benefit Islanders,” Noonan wrote in the report.
The CTF is calling on the Lantz government to reduce the debt every year, balance the budget and cut debt interest costs.
“The committee’s first report should include one number above all others: The year P.E.I.’s debt hits zero,” Drover said. “Anything less is a red herring wrapped in a ratio.”
