CHARLOTTETOWN – The P.E.I. government unveiled a smaller plan for long-term investments Tuesday afternoon, as some Islanders struggle to afford housing and other essentials. The 2027-28 capital budget earmarks $1.34 billion over five years, $289 million less than last year’s plan. Nearly 60 per cent of the funding is dedicated to health care and education, with a focus on maintaining existing assets and building new infrastructure where the government sees urgent and critical needs. “We are doing the most we can, inside our guardrails,” said Finance and Affordability Minister Jill Burridge. She said the lower total partly reflects major projects nearing completion. Other work is being deferred as the province prioritizes finishing what it already started. With demand for skilled labour and building materials high, Burridge said scheduling too many projects at once could drive up costs and delay delivery. Additional projects would also increase borrowing and interest payments, putting pressure on future budgets, she said. Two credit rating agencies, Moody’s and S&P, have assigned negative outlooks to the province’s credit ratings, signalling a risk of downgrades. In the legislature, Premier Rob Lantz said every project had to pass a test: is it needed or wanted? “Every dollar we spend on capital investments is another dollar in debt,” he said. Highlights from the budget Highlights from the capital budget include $418 million to improve the safety and reliability of the health-care system and $380 million for education, with funding for construction and upgrades, including a new school in Summerside. Another $285 million is allocated to rehabilitating and improving roads, bridges and highways, while $60 million is set aside for housing. That housing commitment “pales in comparison” to what’s needed, said Christine Saulnier, a director with the Canadian Centre for Policy Alternatives (CCPA). “When you’re seeing a target in housing that isn’t even half of what you’re spending on roads, where are your priorities?” she asked. While capital spending is not designed to provide immediate relief from grocery bills or raise wages, it can help reduce housing, transportation, and childcare costs over time. Saulnier pointed to 2021 census data showing more than 4,000 P.E.I. households were in need of core housing. That means their homes needed major repairs, were too crowded or unaffordable. That number has likely risen since the census, Saulnier said. Figures provided by the Finance Department show the province added 262 government-owned social housing units in the last two years and plans to build another 42 over the next five. Living wage rises A new report from the Canadian Centre for Policy Alternatives released this week, suggests Islanders need to make about $24 an hour on average to cover basic living expenses. That’s nearly $7 more than the province’s minimum wage, which was raised to $17.30 in October. The living wage calculation increased by 5.75 per cent this year, reflecting higher rent and fuel costs, along with a revised transportation budget. P.E.I. recorded the highest inflation rate among provinces at 5.7 per cent in September, well above the national rate of 3.1 per cent. “If you’re earning less than that, then you are making difficult choices,” Saulnier said. The reference is a family of two parents working full time, raising a couple children, aged two and seven. It assumes the household relies on full-time childcare, plus care before and after school and during breaks, with the parents using three weeks of vacation to cover some of those needs. But it doesn’t account for every real-world situation, like someone living with a chronic illness or disability. An earlier CCPA analysis found nearly one in four P.E.I. workers earned less than $20 an hour in 2025, the minimum wage the organization has been advocating for. Responding to concerns about housing, Minister Burridge pointed to what she called record investments over the past three years, citing higher vacancy rates as a sign of progress. The Finance Department said it’s also seeking clarity from the federal government on how the Build Communities Strong Fund could help pay for road and bridge work in the capital plan. Saulnier credited the province with investing in buses and regional transportation, which can help families spend less on gas. But she said she’s hearing that services aren’t frequent or accessible enough for some people to get to work on time. She also welcomed the province’s child benefit and essentials benefit, along with the addition of a tax bracket for higher income earners. “All those things together could actually make a difference,” she said. “But we need to see more of that coming forward so that households are actually receiving some benefits.”
