Nova Scotia Budget Highlights

Highlights of the Nova Scotia budget presented today, June 1, 1999:

The Nova Scotia government today tabled its fiscal plan for 1999-2000. The centrepiece of the budget is a $600-million Health Investment Fund to enhance the quality of care and improve the efficiency of the health care system.

The fund will invest in continuing and community care and management systems that will support more appropriate health care and reduce the rate of growth in health care expenditures.

The fund carries a commitment to repay no later than fiscal 2012-2013, using a combination of budget surpluses, revenues from Sable gas royalties, and budgeted principal repayments.

ECONOMIC FOUNDATION

• The Nova Scotia economy is showing prosperity in several areas.
• The unemployment rate is 9.2 per cent -- the lowest rate in 23 years. Today, 51,400 more Nova Scotians are working than in 1993.
• The two-year $3-billion Sable Offshore Energy Project is on budget and on time to begin gas delivery this fall. At its peak this summer, more than 5,000 Nova Scotians will be working on the project directly and indirectly. More than $0.5 billion is now committed for additional exploration spending over the next five years.

MEETING FISCAL CHALLENGES 1998-1999

• Demand is rising for health care services and investments.
• Outside of health care, program spending remained within one per cent of target.
• The low Canadian dollar resulted in upward pressure on debt-servicing costs.
• Total revenue gain was $143.2 million above budget.
• The province recorded a forecasted surplus of $22.6 million.

SECURING A HEALTHY FUTURE Health Investment Fund

• Nova Scotia government will make a three-year $600-million investment in health care through the Health Investment Fund -- the largest single investment in Nova Scotia health care since the start of medicare three decades ago. It is designed to strengthen continuing care and relieve the burden on acute care.
• A portion of the fund will be used to bridge the gap for health boards and hospitals while they put new systems in place over the next two years.
• The majority of the funds will be used for long-term investments to make the health care system sustainable.
• Without these investments, the Department of Health is forecasting a sharp rise in the annual health department budget, to $2.7 billion within five years from $1.6 billion.
• The budget also gives hospitals and regional health boards a clean slate by removing their debts.

Other Health Highlights

• An additional $107 million is added to the regular health care budget.
• From the regular budget, the government is committing $10 million for nurses. The majority of this funding will add 400 full-time nursing positions across the province.
• Additional funding is committed for cancer detection programs, for the recruitment and retention of specialists, for medical research, for home care, for doctors, and for long-term care workers.

COMMITMENT TO CHILDREN

• An additional $38.8 million will go to the public school system for teachers and leases for new schools.
• A comprehensive program of school construction will mean a total of 55 new schools by the year 2005-06, with the majority to open in the next two years.
• Nova Scotia's investment in the National Child Benefit program increases to $20.4 million.
• Funds are provided for new facilities and services for children and youth in government care.
• More day-care spaces will be funded.

FAMILIES AND COMMUNITIES

• The province is committing $5 million in support of the federal-provincial Fisheries Retirement Program to help Nova Scotian fisheries workers bridge the gap to retirement. More than 500 people are expected to qualify.
• The province has announced steps to improve the delivery of tax relief in respect of the harmonized sales tax. Beginning in the spring of 2000, the provincial Direct Assistance Program will automatically be paid to those eligible through the personal income tax system. This eliminates the need for people to apply for these benefits and will ensure that all those who are eligible receive payment. A total of 105,000 Nova Scotians are expected to be eligible.
• Government has added $276,000 to the budget for Nova Scotia's six women's centres. The funding recognizes their efforts to deliver quality community-based services to women and will raise grant funding for each centre to $100,000 from $54,000.
• Accredited firefighter volunteers will receive complimentary motor vehicle registrations and plates starting July 1, 1999.

STRENGTHENING THE ECONOMY

• Enterprise Zones have been created to provide tax and investment incentives for businesses that establish themselves and employ people outside the Halifax, Dartmouth, Bedford and Lower Sackville areas. Incentives include:
  equity tax credit increased to 35 per cent
  film tax credit enhanced to 37.5 per cent
• two-year extension of new small business tax holiday
• labour-sponsored venture capital corporations to
  receive $3 credit for every $1 invested in zone area
• Support for the film industry will continue with a two-year extension of the film tax credit, including amendments to provide for use by large Nova Scotia-based production companies.
• Government introduces a new multimedia tax credit on labour expenses. Effective April 1, 1999, companies combining traditional media and digital output will receive a 15 per cent tax credit on the salaries and wages paid to employees.
• Natural resources industries are supported by programs such as the Agricultural Income Disaster Assistance program, which provides a minimum of $7.5 million in assistance to Nova Scotia farmers.
• Silviculture funding is increased by $1 million to a total of $4 million annually.
• Construction on the aquaculture wing of the Nova Scotia Agricultural College is scheduled for completion this fall.

FISCAL RESPONSIBILITY

• The budget supports a federal tax reduction with the result that Nova Scotia provincial personal income taxes are reduced by $20 million on a full-year basis starting July 1, 1999.
• The government is expecting to make significant productivity gains in government operations through better management of travel, printing, telecommunications, and other administrative expenses. A long-term review of office space rentals, government warehouses and vehicle purchases is also under way.

FISCAL PLAN ($ Millions)

Actual Estimate Forecast 1997-98 1998-99 1998-99

4,446.8 Net Revenue 4,382.7 4,525.9 3,688.6 Net Program Expenditures 3,687.7 3,758.8
Current/Capital
54.3 Restructuring Costs/Savings 3.1 2.8
797.8 Debt-Servicing Costs 821.9 874.4
132.4 Sinking Fund Earnings 131.2 132.7
665.4 Net Debt-Servicing Costs 690.7 741.7
38.5 Budgetary Surplus/(Deficit)* 1.2 22.6

Forecast (contd)
1999-00 2000-01 2001-02 2002-03

Net Revenue 4,604.2 4,615.3 4,723.4 4,824.3 Net Program Expenditures 3,879.0 3,951.5 4,001.1 4,070.8
Current/Capital Restructuring Costs/Savings 0.6 (80.0) (10.0) 2.0 Debt-Servicing Costs 847.0 873.1 873.5 883.9 Sinking Fund Earnings 124.0 133.1 145.1 134.3 Net Debt-Servicing Costs 723.0 740.0 728.4 749.6 Budgetary Surplus/(Deficit)* 1.6 3.8 3.9 1.9

• Note: Does not include expenditures from the Health Investment Fund.