The 2025-2026 Prince Edward Island Budget
Overview
PEI Finance Minister Jill Burridge delivered the province’s 2025-26 budget earlier today, projecting a deficit of $183.9 million – the largest in the history of the province. This is the first budget under the leadership of Premier Rob Lantz, who became PC party interim leader and therefore premier after the surprise resignation of former Premier Dennis King, who accepted the role of Canada’s Ambassador to Ireland.
The threat of US tariffs is a feature of this budget, along with additional health and education spending and support for communities.
The 2025-26 operating budget includes $294.6 million in new spending, an increase of 9.1 percent over last year. Revenues are projected to grow by $195.7 million, or 6.2 percent. The projected deficit includes a $32 million Tariff and Trade Contingency Fund.
Highlights from the 2025-26 budget include:
Securing Our Economy
- $9.3 million to lower the corporate income tax rate and raise the small business threshold
- $3.6 million to support the oyster industry, including a Genome Surveillance Project and contingency fund
- $353,000 to expand air access and restore hub airport connections
- $42 million for tariff and trade response funding, including contingency support and flexible loans
Securing Our Workforce
- $5.1 million to reduce personal income tax and accelerate tax bracket changes
- $1.5 million to support worker reskilling and upskilling
- Increase in minimum wage to $17/hour
- $663,000 to increase the George Coles Bursary to $3,500
- $155,000 to expand the Marion L. Reid Bursary for in-demand occupations
- $100,000 to support future farmers and expand bursaries through the PEI Young Farmers Association
Securing Our Healthcare System
- $1.1 million to support healthcare training programs, including a new accelerated administrative support course
- $500,000 to expand the Student Nursing Employment Program
- $650,000 to hire more internationally trained registered nurses through bridging programs
- $215,000 to support LPNs becoming RNs
- $10.5 million to add more Patient Medical Homes and affiliate 10,000 Islanders
- $100,000 for a new medical transportation assistance program for rural Islanders
- $4.8 million to expand virtual care access via phone, video, or text
- $4 million to expand programs helping seniors stay in their homes
Securing Our Communities and Infrastructure
- $160,000 to maintain free student transit and subsidized passes
- $800,000 to create a Joint Enforcement Team targeting drug trafficking and organized crime
- $3 million to expand the Home Heating Assistance Program
- $5.5 million in increased funding to municipalities through a new interim agreement
- $3.2 million in core funding for non-profit community groups, including food banks
Securing Our Future
- $10.5 million to create or transition 190 early learning spaces, add family home centres, and raise wages
- $470,000 to support before and after-school care programming
- $2.5 million to expand the school food lunch program, bringing the total to $7.5 million with federal support
- $9.2 million to invest in education staffing, prep time, and front-line support
- $128,000 to provide a $200 Back to School benefit and a $200 Change in Season benefit for children in care
Fiscal and Economic Forecast
The net debt to GDP ratio for PEI is projected to be 32.6 percent this year, up from the 2024-25 forecast of 29 percent. The ratio is expected to increase to 35 percent and 35.9 percent in the next two fiscal years. PEI’s projected net debt is projected to rise by $500 million to $3.5 billion. In its 2025 Budget Paper on the Economy, the Department of Finance notes:
“Overall, growth on the Island is projected to remain positive over the forecast horizon, growing by 2.5 per cent in 2025 before slowing to approximately 2 per cent in 2026 and 2027 as the slowdown in population growth is more acutely felt. The imposition of tariffs, their size, duration and the goods they target have the potential to materially negatively alter the forecast, while a lessening of overall geopolitical instability could provide some upside.”