Nova Scotia Posts Third Consecutive Balanced Budget

The Nova Scotia government posted a balanced budget for 1998-99, marking the third consecutive year the province has finished in the black.

The fourth-quarter, or year-end, forecast released today shows a surplus of $22.6 million.

"Only three times in the past 20 years has the Nova Scotia government managed to balance the budget and record a surplus --and it happened in each of the past three years," said Finance Minister Don Downe.

Three factors contributed to the solid financial performance, the minister said. Revenues from federal sources were higher than expected; provincial revenues grew, reflecting increasing strength in the Nova Scotia economy; and, outside of health care, the province restricted spending.

"Those achievements allowed us to overcome a significant budget challenge created by a record-low Canadian dollar and increasing health care expenditures," said Mr. Downe.

The low value of the dollar throughout the year drove up Nova Scotia's debt payments, as much of the debt is held in U.S. currency. Health care costs, at $1.51 billion, were more than $50 million over the original estimate. Pressure for additional health spending came from commitments to the new blood supply system, improvements to emergency health delivery, and increased service demands.

As for the economy, 1998 saw Nova Scotia record its best economic growth performance in a decade.

"We have seen strong investment and increased consumer spending," said the minister. "This translates into a number of positives, including jobs for Nova Scotians."

The growing economy created nearly 12,000 more jobs for Nova Scotians in 1998, pushing unemployment to its lowest level in a decade. The promising job trend continues in 1999 with the latest report from Statistics Canada showing a 9.2 per cent provincial unemployment rate as of April 1999.

The year-end forecast update provides fiscal and revenue summaries, highlights expenditures in each department and reports on the provincial economy.

NOTE TO EDITORS: The Fourth Year-End Forecast Update is available at the Nova Scotia Government Bookstore, 1700 Granville Street, Halifax, 902-424-7580 or 1-800-526-6575.