P.E.I. in strong fiscal position to weather looming U.S. tariffs, premier says
With U.S. tariffs expected to come into effect soon, Dennis King says Prince Edward Island is in a good financial position to navigate the economic challenges ahead.
The P.E.I. premier announced during his state-of-the-province address this week that a new export enhancement and market development fund would be included in the upcoming 2025 budget.
King said the fund will support Island exporters amid the potential impacts of President Donald Trump's proposed 25 per cent tariffs on the goods Canada exports to the U.S.
Trump is expected to announce the tariffs Saturday, according to White House Press Secretary Karoline Leavitt during a briefing Friday.
'We're in a good position'
There have been some concerns about the P.E.I. government's financial health.
In November, the province's auditor general raised concerns in a report about rising debt levels and their impact on long-term fiscal sustainability. P.E.I.'s net debt has grown by 26 per cent over the last decade, reaching $2.65 billion as of March 31, 2024.
In an interview Thursday prior to the tariff announcement, King said the province is in a solid position to manage the economic uncertainty.
"We're in a good position to withstand this to a certain degree, but once again, how long we're able to do that, how long we need to do that, will be the question," he told CBC News: Compass host Louise Martin.
King said the province will be asking Ottawa to step in to be a significant investment partner in the new funding.
The federal government has provided critical support during past crises, he said, and discussions are already underway for similar assistance.
There have been talks about implementing COVID-style relief measures, such as more flexible rules for employment insurance eligibility, loan assistance, and tax deferrals for exporters.
"We'll do everything we can as a provincial government, in partnership with the federal government, to respond in a positive way and to use the wherewithal we have to make the investments we need to make to make everybody as whole as we can," he said.
'We'll try to walk the line'
When asked about the auditor general's report, King said he doesn't believe the province's debt is unsustainable. He said four of six budgets his Progressive Conservative government has passed have returned surpluses.
"Are we concerned about our expenditures and how that grows and the impact it has on us and our next generation? Absolutely," he said.
"But we do have a responsibility to make sure that Islanders are able to live in today and to make sure that they're as whole as possible when they're impacted by something like this that is outside of their control… So we'll try to walk the line."
He also pointed to the province's ability to navigate past crises, including the pandemic, post-tropical storm Fiona and potato wart as evidence of the province's fiscal resilience.
"We've done a very, very good job to respond to Islanders in real time, and we'll continue to do so."