(October 26 – 11:45 ET) – Islanders are enjoying the strongest back-to-back economic performances since construction of the Confederation Bridge boosted overall growth in the mid-1990s, according to a report released today by the Investment Dealers Association of Canada. The report attributed the surge in economic growth to buoyant domestic demand and strong exports. Provincial expansion is expected to be faster this year than 1999’s 3.5%.
“Prince Edward Island is enjoying a high level of consumer confidence in the wake of tax cuts and strong employment growth,” says Jim Stevens, the IDA’s Atlantic regional director. Employment in the first eight months this year was 6.5% higher than the same period in 1999.
The annual IDA Fiscal and Economic Review and Outlook: Prince Edward Island describes recent economic and fiscal developments in the province, and sets out near-term prospects for the economy and provincial finances.
If the pace of employment continues in 2000, the IDA predicts that P.E.I.’s jobless rate will go down to 11%-12%, making it the lowest unemployment rate in two decades.
Elevated consumer confidence was reflected in buoyant retail sales that increased 10% year-to-year in the first half 2000. Consumer optimism was also reflected in the second straight year of double-digit increases in housing starts and residential building permits in 1999. The IDA expects housing expenditures to remain high, stimulating construction activity and provincial growth this year.
The IDA commends the province for providing a second cut in personal taxes this year. After reducing its personal tax rate for the first time ever in 1999, P.E.I. is cutting taxes a further one percentage point to 57.5%of federal taxes for the 2000 tax year. Its top personal marginal tax rate falls from 49.6%to 48.8% this year, the fourth lowest top marginal rate among all provinces.
-IE Staff