Island of opportunity
P.E.I. set up for economic success, but threats could stunt growth
Aging populations, high taxes and economies dependent on commodity prices are some of the threats to Atlantic Canada’s fiscal future. A recent report issued by the Atlantic Provinces Economic Council says that, of the four Atlantic provinces, P.E.I. might be in the best shape to fight off those threats.
“P.E.I. is not suddenly going to be Hong Kong,” says APEC’s president and CEO Finn Poschmann (right). “But there is a positive economic future there if it’s managed well.”
According to APEC, the key metrics in the gentle island’s favour are a growing population that will be the youngest among the four Atlantic provinces, a government on the path to balancing the budget, and an economy with a number of businesses thriving in the light industries and technology sectors.
However, there are some dark clouds messing with P.E.I.’s sunny economic forecast. The island is tied with another Atlantic province (Nova Scotia) for having the highest corporate tax rates in Canada, which could dissuade some businesses from moving to P.E.I. and current ones from expanding. In addition, its tiny population (approximately 145,000) makes it expensive to deliver all the programs and services expected of a province. And its important agricultural sector is facing succession issues as many farm owners near retirement age.
Those threats could stymie the island’s path to fiscal security. But Poschmann says if solutions are found, such as for the farm succession problem, the province will be stronger for it. “That issue is going to change what small communities look like there. But there are always opportunities when smart people tackle these things,” he says.