Island economy well positioned to meet challenges, continue supporting Islanders

The Government of Prince Edward Island has released its second quarter Fiscal and Economic Update for the 2025-2026 fiscal year.

The update reflects increased expenditures in several key areas: Agricultural insurance claims related to extreme weather, healthcare delivery costs, increased social program support funding, and enhanced educational resources.

The current forecast for fiscal year 2025-2026 is a deficit of $367.4 million, a $183.4 million increase from the 2025-2026 Operating Budget, tabled in April 2025. These pressures are expected to result in an estimated increase of $124.8 million in operating expenditures. 

While expenditures have increased, the update shows PEI’s economy remains strong and resilient. 

• PEI led all provinces in the growth of manufacturing shipments and continued to benefit from strong activity in housing starts, construction, and tourism.
• As demographic pressures eased, growth in population-related sectors moderated, with retail and employment seeing modest growth
• Prince Edward Island led all provinces in average weekly earnings.
• The update also outlines ongoing investments into social development, healthcare, and measures supporting those in the agricultural industry impacted by extreme weather.

“These expenditures are necessary to fulfil our government's commitment to improving Islanders' access to the programs and services they need, while supporting our primary industries. We know there are prudent spending decisions to be made that balance our key budget anchors, economic growth and support for Islanders.”

— Finance Minister Jill Burridge

The Fiscal and Economic update is provided following the second quarter and outlines the provincial government’s current expectations for financial results by the end of the fiscal year, based on information available since the release of the spring operating budget. The update also provides an economic outlook for 2026.

For more information, visit Fiscal and Economic Updates.

Media contact:
Janice Fogarty
Department of Finance
jefogarty@gov.pe.ca

Backgrounder

2025-2026 Economic Highlights: 

• Average weekly earnings are up 5.5 per cent through November, to total $1,126.63 the fastest growth amongst provinces.
• Real GDP grew by 3.8 per cent on the Island in 2024 following growth of 2.9 per cent in 2023 and 5.1 per cent in 2022. Growth for 2025 is forecast at 2.4 per cent.
• There were 1,451 new housing starts through the third quarter of 2025, an increase of 8.5 per cent from 2024.
• On a year-to-date basis through November, employment on the Island has grown by 1.0 per cent.
• Manufacturing shipments are up 10.1 per cent on a year-to-date basis through September, the fastest growth amongst provinces.
• As of July 1, 2025, PEI’s population was estimated to be 182,657. This is a yearly increase of 2,948 people for a growth rate of 1.6 per cent. International immigration continues to be a main driver of population growth.