Prince Edward Island - Economy

Economy

The provincial economy is dominated by the seasonal industries of agriculture, tourism, and the fishery. The province is limited in terms of heavy industry and manufacturing. Although commercial deposits of minerals have not been found, exploration for natural gas beneath the eastern end of the province has resulted in the discovery of an undisclosed quantity of gas.

Agriculture remains the dominant industry in the provincial economy, as it has since colonial times. During the 20th century, potatoes replaced mixed farming as the leading cash crop, accounting for one-third of provincial farm income. The province currently accounts for a third of Canada's total potato production, producing approximately 1.3 billion kilograms annually. Comparatively, the state of Idaho produces approximately 6.2 billion kilograms annually, with a population approximately 9.5 times greater. The province is a major producer of seed potatoes, exporting to more than twenty countries around the world.

The island's economy has grown significantly over the last decade in key areas of innovation. Aerospace, Bioscience, ICT and Renewable energy have been a focus for growth and diversification. Aerospace alone now accounts for over 25% of the province's international exports and is the island's fourth largest industry at $355 million in annual sales.

As a legacy of the island's colonial history, the provincial government enforces extremely strict rules for non-resident land ownership. Residents and corporations are limited to maximum holdings of 400 and 1,200 hectares respectively. There are also restrictions on non-resident ownership of shorelines.

Many of the province's coastal communities rely upon shellfish harvesting, particularly lobster fishing as well as oyster fishing and mussel farming.

The provincial government provides consumer protection in the form of regulation for certain items, ranging from apartment rent increases to petroleum products including gas, diesel, propane and heating oil. These are regulated through the Prince Edward Island Regulatory and Appeals Commission (IRAC). IRAC is authorised to limit the number of companies who are permitted to sell petroleum products.

The sale of carbonated beverages such as beer and soft drinks in non-refillable containers, such as aluminum cans or plastic bottles, was banned in 1976 as an environmental measure in response to public concerns over litter. Beer and soft drink companies opted to use refillable glass bottles for their products which were redeemable at stores and bottle depots. The introduction of recycling programs for cans and plastic bottles in neighbouring provinces in recent years (also using a redemption system) has seen the provincial government introduce legislation to reverse this ban with the restriction lifted on May 3, 2008.

Prince Edward Island has Canada's highest provincial retail sales tax rate, currently (2008) established at 10%. The tax is applied to almost all goods and services except some clothing, food and home heating fuel. The tax is also applied to the Federal Goods and Services Tax.

At present, approximately fifteen percent of electricity consumed on the island is generated from renewable energy (largely wind turbines); the provincial government has set renewable energy targets as high as 30-50% for electricity consumed by 2015. Until wind generation, the province relied entirely on electricity imports on a submarine cable from New Brunswick. A thermal oil-fired generating station in Charlottetown is also available.

The average family income on Prince Edward Island is $62,110/year, and the minimum wage of $9.60/hour as of October 1, 2011.