Nova Scotia Budget Highlights

Highlights of the Nova Scotia budget presented today, June 4, 1998:

ECONOMIC CLIMATE Opportunity Ahead

• More Nova Scotians are working. Between April 1997 and April 1998, employment increased by nearly 20,000.
• Nova Scotia is showing impressive economic growth. Growth of two per cent occurred in 1997 -- more than double the previous year. For 1998, forecasted growth is 3.7 per cent -- the largest jump in 13 years. This marks the best back-to-back growth rates in more than a decade.

FISCAL PROGRESS 1997 98 A Solid Foundation

• A budget surplus of $37.4 million is forecast for 1997 98.
• This is Nova Scotia's second consecutive balanced budget.
• Surplus includes provisions for:
  increased commitments of $133 million in health care,
  including an allowance of $49.8 million for potential
  uncollectible receivables within the health care system.
• fair wage settlements for public-sector workers.
• The surplus will be used for debt reduction and a rebate of HST for residential electrical consumers.
• HST relief will take the form of a five per cent rebate on all electricity purchased by residential consumers between Nov. 1, 1997, and March 31, 1998.

DEBT MANAGEMENT A Secure Future

• Provincial public service workers and pensioners will receive benefits from the significant surplus in the Nova Scotia Superannuation Plan.
  Employees to have contribution holiday for 1998 99.
  Full pension indexing extended to older pensioners.
• Increase in spousal pensions from 60 per cent to
  66 2/3 per cent.
• The plan will continue to be secure for the future -- with a surplus of 108 per cent as of March 31, 1998.
• The pension plan surplus will help reduce the liabilities of the province. The net direct debt of Nova Scotia is forecast to have declined by $219.8 million as of March 31, 1998.

SOCIAL RESPONSIBILITY Children, Families, and Healthy Communities

• Students will see the benefits of increased funding in public schools -- $82 million more will be invested in Nova Scotia's public school system. This means new school programs, more textbooks, professional development, technology, smaller classes, and more teachers and teachers' aides.
• Nova Scotian universities will receive nearly $24 million more over the next three years to help stabilize tuition fees and help students succeed.
• Nova Scotians will benefit from a quality health care system they can count on. The system will be secured through a commitment to add $80 million to the health care budget.

HEALTH SPENDING

Third-quarter report February 1998 $1,375 million Budget 1998 99 June 1998 $1,455 million Total increase $80 million

• Planning has begun for an additional 170 long-term care beds.
• Other health care spending areas include: funding for MS treatments, more money for home care, doctors, and new health care facilities in selected communities.
• Children in low-income families will have every opportunity to reach their full potential. Nova Scotia is working with the federal government to improve opportunities for children in low-income families. A range of healthy child development initiatives will be developed.
• These healthy child development initiatives will focus on prevention and early intervention programs to give children a better start in life, as well as on expanded child-care services to help low-income Nova Scotian parents cover the cost of working.

ECONOMIC FUTURE Opportunity for Nova Scotians

• A new economic strategy will be developed in consultation with Nova Scotians. Its goal will be to encourage a climate of self-reliance and build on natural strengths of communities and individuals.
• A new Economic Advisory Council will consult widely and examine how to make the most of economic development opportunities in Nova Scotia.
• A commitment to forest renewal through $3 million for silviculture.

FISCAL RESPONSIBILITY 1998 99 Security for Nova Scotians

• The budget will be balanced in 1998 99 -- marking the third consecutive balanced budget in Nova Scotia's history.
• Budget 1998 99 allows for legislated tax-reduction commitments. This includes the reduction in the transitional tax on motor vehicles from two per cent to one per cent. 1998 is also the first full year of the reduction in personal income tax for all Nova Scotians. The benefits of the enhanced Low Income Tax Reduction Program were realized this spring when many Nova Scotians filed income tax returns.
• The tax credit for television and film production in Nova Scotia will be increased from 30 per cent to 32.5 per cent.
• Farmers will benefit from the reinstatement of the Farm Land Tax Exemption Program effective April 1, 1998.
• The province's four-year fiscal plan shows fiscal security for Nova Scotia.

FISCAL PLAN ($ Millions)

Actual Estimate Forecast 1996 97 1997 98 1997 98

4,246.0 Net Revenue 4,240.7 4,441.0 3,514.9 Net Program Expenditures 3,477.9 3,677.0
Current/Capital
35.6 Restructuring Costs/Savings 31.5 55.2
811.1 Debt-Servicing Costs 855.2 803.6
123.9 Sinking Fund Earnings 127.9 132.2
687.2 Net Debt-Servicing Costs 727.3 671.4
8.3 Budgetary Surplus/(Deficit) 4.0 37.4

Forecast (contd)
1998 99 1999 00 2000 01 2001 02

Net Revenue 4,382.7 4,472.0 4,498.0 4,581.4 Net Program Expenditures 3,687.7 3,817.5 3,835.5 3,903.4 Current/Capital Restructuring Costs/Savings 3.1 (69.2) (69.2) (69.2)

Debt-Servicing Costs 821.9 855.4 869.6 870.9 Sinking Fund Earnings 131.2 137.1 143.8 142.9 Net Debt-Servicing Costs 690.7 718.3 725.8 728.0 Budgetary Surplus/(Deficit) 1.2 5.4 6.0 19.2

• Nova Scotia is renewing efforts to establish federal fiscal fairness in transfer arrangements and cost-shared programs.
• Financial accountability will be improved according to a three-year timetable.

INTERNET ADDRESS:
http://www.gov.ns.ca/fina/financial/budget98/index.htm