What did PEI stand to gain/lose by joining confederation in 1867?

In 1867 Prince Edward Island had actually more to lose than gain by joining Confederation. Although the first conference was held in Charlottetown, and PEI representatives were present at Quebec to argue in favour of regional representation in the Senate, the fact remained that PEI had a very small population. The main "goals" of Confederation were primarily economic. A inter-colonial railway was to be built and financed by the new national government to promote East-West trade as opposed to the previous North-South pattern. Owing the fact that PEI was an island, there was little incentive for this small population to pay taxes to fund this initiative. Furthermore, the PEI economy was based almost entirely on agriculture and fisheries. These industries could expect little benefit from joining Confederation and the farmers and fishermen would actually be in a worse position as protective tariffs would increase the costs of goods they needed to purchase.

There is also the fact that unlike the other colonies, PEI was almost entirely dominated by absentee landholders. In fact, much of the island was owned and leased by 13 landholders in Britain. Understandibly, the residents of the island did not like this situation. However, when efforts were made in the 1850s to appropriate the land, the colonial office quashed it. As such, the people were much less willing to listen to the colonial office when it pushed them to favour Confederation. In many ways, the islanders could view opposing Confederation as opposing the colonial office.

Obviously PEI did join Confederation, but not until 1873. By that time, the island was almost bankrupted by the exorbriant cost of building railroad, and Britain (with Canada's urging) had blocked trade agreements negotiated between the island and the US. After John A. Macdonald had also come back to the table with better term--including the guarantee of all weather transportation links with the mainland, an assumption of the railroad debt, and money to buy out the landowners--Charlottetown was in a position to actually gain from Confederation and joined.