The Prince Edward Island government will increase the harmonized sales tax to 15% as of Oct. 1, and is delaying plans to balance the provincial budget by one year.

Finance Minister Allen Roach unveiled the Liberal government’s second budget Tuesday, saying the changes are necessary because of slow economic growth and a need to maintain essential public services.

“Islanders have told us that a balanced budget should not come at the expense of essential public services, such as health care and education. More investments are necessary to sustain these critical services,” he said.

But Darlene Compton, the Opposition finance critic, says raising the tax rate won’t create jobs or grow the economy.

“Once again Islanders are being asked to weather more pain for little gain. More than $30 million in new taxes, fees, licences and permits but still no balanced budget,” Compton told the legislature.

She said the Island government is following the lead of other Liberal governments in the region and going for the “quick buck.”

The government will boost funding for health, education and services to help settle immigrants and refugees.

Last year, Roach projected a balanced budget for 2016-2017, but instead he expects a $9.6 million deficit to be followed by a $9.2 million surplus in 2017-18.

While the population of Prince Edward Island increased by 0.2% last year, the number of people moving to the Island only slightly outpaced the number of people leaving.

Roach says this year’s spending plan is a “good budget.” He said it may not go as fast as some people may have wanted in achieving balance, “but I think it works better for Islanders.”

He says the budget builds on the Island’s primary industries like farming, fishing and tourism.

While last year’s budget aimed to reduce the size of the public service through attrition, Roach says there are no expected cuts in the civil service this year.

Health PEI’s budget is being increased by 3.1% to $605 million, or 35% of the total budget.

Education — early years and K-12 funding will increase by 3% to $243 million in the coming year.

A 1% increase in the operating grants for UPEI, Holland College and College Acadie.

The government will spend $100,000 in additional settlement supports to integrate immigrants and refugees.

The provincial portion of the HST will increase to 10% on Oct. 1, raising the tax to 15% from 14%, and making it the same throughout the Maritimes. The change is expected to result in additional revenue of $11 million in 2016-2017 and $22 million in 2017-2018.

The government is bringing in a number of measures to provide tax relief to low income Islanders.

It is also eliminating the 1% Real Property Transfer Tax to all first-time home buyers effective Oct. 1, 2016.

Overall employment in Prince Edward Island declined for the second year in a row in 2015, down 1.1% from 2014.

Population grew in 2015, increasing by 0.2%, the fastest growth in the Atlantic region.

In 2015, Prince Edward Island had 1,336 international immigrants, and 2,202 inter-provincial migrants. However 3,445 people left for other parts of the country.

The deficit for 2015-2016 is now forecast at $27.7 million, up $7.8 million from the budgeted deficit of $19.9 million. Roach says the main reason for the jump was an increase in health expenditures.

The projected deficit for 2016-2017 is $9.6 million, while a surplus of $9.2 million is forecast for 2017-2018.

The 2016-2017 budget increases the net debt by $19 million to $2.2 billion by the end of March 2017 — about $15,000 for every Islander.