P.E.I. deficit brings pressure, not crisis, says credit ratings agency

Prince Edward Island's provincial flag flies on a flagpole in Ottawa, Monday, July 6, 2020. THE CANADIAN PRESS/Adrian Wyld

CHARLOTTETOWN — At least one credit rating agency deems Prince Edward Island’s finances manageable, despite a recent budget that projects a record deficit.

Still, Morningstar DBRS says the 2026-27 budget suggests a weaker fiscal performance than previously estimated as the province spends more than it brings in.

It says in a brief report that a 38.1 per cent net debt-to-GDP ratio remains manageable but is rising as the province borrows more cash to fund projected deficits and capital projects.

The Progressive Conservative government tabled a budget on Tuesday that projected a record $410-million deficit, adding to a net debt expected to grow to $4.9 billion over the next two years.

The Opposition Liberals said the budget reflects a government with a spending problem.

Morningstar notes the budget predicts new infrastructure and increased population that it says will help the economy recover in the medium term.

This report by The Canadian Press was first published April 17, 2026.

The Canadian Press