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Amid speculation about a snap election, Prince Edward Island’s Liberal government was in a particularly boastful mood Friday when it tabled its second consecutive balanced budget.

Finance Minister Heath MacDonald is projecting a $1.5 million surplus for the 2018-19 fiscal year, saying the province’s economy is booming.

“Little Prince Edward Island continues to surprise everyone,” MacDonald told the legislature. “Our economy is stronger than it’s ever been, and it’s growing faster than the region and the country.”

However, a closer look at the numbers shows that a $62 million increase in federal transfers was key to helping the province record a surplus while boosting operating expenditures by 4.5%. Federal funds account for 39% of the P.E.I. budget.

“The equalization numbers have a bit of a bonus, and the economy has been doing quite well, so their own tax revenue would have held up nicely,” said Jim Sentance, an economics professor at the University of Prince Edward Island.

“At the end of the day they decided to spend it all … It is boastful, but they do tend to do that here.”

The centrepiece of the $1.7-billion fiscal plan is an increase in spending for health care. The extra $32.5 million for health — an increase of 4.8% — will be used to pay for, among other things, 100 new long-term care beds over the next two years and a variety of new mental-health initiatives.

Health-care costs will consume 36% of P.E.I.’s budget, by far the largest departmental expenditure.

On the education front — the other big line item of every provincial budget — the government committed to adding $17 million. More teachers will be hired and new grants for lower-income post-secondary students will cover more costs, resulting in free tuition for 1,000 students.

The feel-good document also includes a tax cut for small businesses, the creation of up to 400 new child-care spaces and new front-line positions in the classroom.

The next general election is set for October 2019 under provincial legislation, but there has been speculation Premier Wade MacLauchlan could call for a vote as early as next month or in June.

Political observers have suggested MacLauchlan may be inclined to capitalize on the province’s robust economy and the 8.7% increase in federal transfers.

Quoting from a recent analysis produced by the independent Atlantic Provinces Economic Council, the finance minister said: “Prince Edward Island is on a tear.”

MacDonald said the Island’s population surpassed 152,000 last year, an annual increase of 1.7% — the fastest growth in the country. And for first time since 1967, the Island’s median age dropped in 2017, he said.

As well, the provincial jobless rate dropped slightly to 9.8%, the lowest annual average since 1978.

The finance minister also pointed to rising incomes, higher retail sales and housing starts, and “never-before-seen revenues in agriculture, fisheries and tourism.”