CHARLOTTETOWN - The P.E.I. government says the provincial pension fund will have lost $275 million by the end of the fiscal year and more losses are expected as global markets continue to drop.
Treasurer Wes Sheridan says that means the province will have to spend millions more to cover those losses.
The public service pension fund holds about $1 billion and covers about 10,000 people, including retirees and civil servants currently paying into the fund.
Despite the fact the fund has been depleted by 17.1 per cent in less than a year, those who have paid into it continue to have their benefits guaranteed by the government.
But Island taxpayers won't get off so easy.
At the end of 2008, when it was first noted the pension fund had lost over $110 million, the province came up with a plan to pay off the losses over 15 years, allocating $40 million for this year.
With those losses now growing, the province has bumped this year's allocation to $50 million.
Sheridan says that will have a substantial impact on the province's operating budget this year.
''Over the next year we'll be impacted quite heavily on our bottom line, but I'm hoping that by the end of 2009 we'll see a very hefty correction,'' says Sheridan.
Opposition Leader Olive Crane says she is highly concerned about the pension fund losses and the way the treasurer is handling them.
''This is huge,'' says Crane.
''People are saying this is very unusual. It's not like the recessions of the '80s and '90s, this is almost mirroring back to some of the things that happened in the late 1920s, so the big question is, what's he doing to try to lessen the risk?''
The only thing that can be done is to hold on and wait for the markets to recover, says Sheridan.