Good morning, Mr. Chair, and welcome to you and your committee members. Let me take the opportunity to welcome you to P.E.I. on behalf of the Province of P.E.I. and all the constituents and residents of Prince Edward Island.
We look forward to having the opportunity to present to you this morning. What we're going to do is pass out a few summaries of our economic performance. It's not my intention to review those with you this morning, but once you look at them, you're free to ask questions.
I know you have a difficult job to do. It is an important one, and I recognize that. I will be doing the very same outreach come January and February this year, when we'll be looking at our own budget here in the province.
Time is short, so I will get to the point. I have three areas that I would like to address.
The first one is infrastructure. We are pleased with the new programs, particularly with water and sewer. We're happy to see the fifty-fifty cost-sharing, but anything that large for a province of this size has a few wrinkles for us. Fiscal capacity is a limiting factor here.
There is a demand locally for projects that don't qualify under the rules of the federal program. It strains our ability to use these funds. We feel that there is a need for broader rules for qualifying for these projects, rules that possibly could be tailored. We believe they should be tailored to small jurisdictions such as ours, and I'm sure you recognize that. We also believe that the process is a bit cumbersome. We know there has to be accountability; however, it is always better to look at local versus national projects.
The second item that I want to speak of is health care. It's a constant financial pressure. We're a small jurisdiction, yet we're expected to provide the health care that's seen in other jurisdictions. Certainly, there's a lot of pressure on this government and on our budget to continue to move forward with that. Your move to drop the health transfers from 6% to 3% in 2017-18 will hurt us. The CHT covers approximately 25% of health costs at present, and the 3% decline will drop this percentage significantly over time.
As in other provinces, new services are required for mental health, home care, drugs, and innovation. Our population is aging, and costs are going to rise above 5%, as an older population requires more health care services.
Certainly, speaking anecdotally, I notice that even in my own district the number of people who have moved for retirement purposes to Prince Edward Island is increasing at an incredible rate. To give you a quick example in my own district, probably half a dozen families of teachers that have retired from the province of Ontario have come here for retirement purposes. Certainly, as they age, those needs will increase, and that's just a small portion. We're starting to see this as a trend. Home care demands are increasing. They have increased already. Pharmacare, or pharmacy, has increased.
I note that the premiers have instructed health ministers and finance ministers to report back to them this fall on a new health funding arrangement. I was on a conference call yesterday with the health ministers in Toronto to review phase one. We need to see action now, because our 2017-18 budgets are just around the corner.
The final item I would like to talk about is the carbon tax. Prince Edward Island is a low carbon emitter. Charts will show that we have lowered our emission rates significantly. Approximately 25% of our emissions come from agriculture and fisheries, 40% from transportation, and 25% from structures, buildings. Not a lot of mitigation is available to these sectors without massive investments in new technologies.
We're in the process now of developing a new energy strategy. It's due to be released later this fall. It will involve making electricity usage more practical as a way to mitigate our carbon footprint. We have no single large users or emitters of carbon. We'd like you to consider policy alternatives to encourage building and transportation conversion to allow a low carbon economy.
One of the things I'd like to point out, certainly, is that the Province of Prince Edward Island has been concerned about carbon emissions for a number of years. For anybody who follows what has taken place here, you will know that the Province of Prince Edward Island has made significant investments in wind energy over the years. Those investments certainly have been made in the past, to the point where we now generate 35% of the electricity ourselves, here on Prince Edward Island. When you look at a small jurisdiction, that's a significant number, and as a province that has been looking toward green and getting away from carbon for a long time, it's one that we hope doesn't get lost.
With that, I want to thank you very much for giving us the time here today and for listening to us. We'll certainly take any questions you may have.