The 2026-27 Prince Edward Island Budget
PEI Finance Minister Jill Burridge delivered the 2026-27 budget address earlier today, which forecasts a deficit of nearly $410 million and $269 million in new spending. Compared with 2025-26 budget, program expenditures are increasing by 6.7 per cent.
Affordability Overview
Significant spending is being allotted to measures to address affordability concerns, including:
- Island Essentials Benefit – $26 million
- PEI Home Heating program – $7.2 million
- $10/day childcare – $81.6 million
- PEI School Food program – $8.3 million
Communities, Land and Economy
Under the heading of “Communities, Land and Economy” funds are allocated for:
- Infrastructure grants to communities – $54.6 million
- Rural Growth Initiative – $7.5 million
- Rural transit routes – $3.0 million
- Oil-to-Heat Pump Affordability program – $15.6 million
- Home Insulation programs – $10.1 million
- Business development, innovation, and export programs – $61.4 million
- Trade and market development initiatives – $2.3 million
- Sustainable Canadian Agriculture Partnership programs – $7.0 million
- Aquaculture contingency fund – $6.0 million
Healthcare and Education
Healthcare and education expenditures also featured prominently:
- Fund 85 new long-term care beds – $5 million
- Continuing seniors at-home healthcare support programs, including Self-Managed Care and At-Home Caregiver Support program – $15 million
- Continuing Pharmacare programs – $76 million
- Recruitment and retention of healthcare workers – $30.9 million
- Advancing the patient medical home model, increasing access to more holistic care – $57.8 million
- UPEI Faculty of Medicine and Health Sciences Centre – $25.8 million
- Prince County Hospital Foundation Learning and Innovation Centre – $4 million
- Addressing MRI testing, lab results and cataract surgeries wait times – $9.3 million
- 400 new early centre spaces – $4.2 million
- Additional educational assistants and youth service workers – $3.7 million
- Post-secondary bursaries for Island students – $12 million
- Training PEI/LMDA, including 100% tuition subsidy programs for health professions – $10 million
Projected Deficit
- In addition to this year’s projected deficit of $409 million, the 2025-26 projected deficit is $449.5 million, up from the original forecast of $183.9 million. Total interest and amortization sits at $368.6 million. The budget projects revenues of $3.4 billion and planned spending of $3.8 billion.
- Several departments have substantial budget increases year over year, and their 2025-26 expenditure exceeded last year’s budget estimate, including Education, Health and Social Services and Seniors.
- The budget for Health PEI alone stands at $1.2 billion, while last year’s budget was over $1 billion, with a renewed 2025-26 estimate of $1.1 billion.
- According to budget documents, employment on the Island increased by 1.1 per cent in 2025, or 1,000 people to reach a new all-time high of 93,500. This was the slowest rate of employment growth since 2016, as growth in the working age population has slowed. PEI has an unemployment rate of 8%, the second highest among the provinces.
- Housing starts increased by 4.4 per cent in 2025 to total 1,769 starts. This was the second-highest number of starts on record. Dry weather conditions in 2025 severely impacted PEI’s vital potato sector, with overall production declining by 15.9 percent. It was also a difficult year in relation to the lobster and oyster sectors. The value of manufacturing shipments from the Island grew by 10.2 per cent in 2025, the fastest growth amongst provinces.
Conclusion
Overall, the economy is projected to have grown by 2.4 per cent in 2025 before slowing in 2026 and 2027 to around 2 per cent before increasing to back over 2 per cent over the latter part of the forecast period.