Province to Adopt Full Financial Disclosure

Neil LeBlanc, Nova Scotia's Minister of Finance, has announced today major changes to how the province accounts for revenues, spending and debt.

"We have firmly adopted the principle of full and open disclosure on the province's financial position," said Mr. LeBlanc. "By moving toward Generally Accepted Accounting Principles, Nova Scotians will have a better understanding of where the province stands financially."

"I am pleased that the new government is prepared to move ahead and adopt Generally Accepted Accounting Principles," said Auditor General Roy Salmon. "We have been recommending more disclosure for many years now, and the move toward full disclosure and consolidation of accounts has my full support."

Mr. LeBlanc said: "Consolidation and full compliance with generally accepted accounting standards is a critical part of the mandate Nova Scotians provided to the new government, and fulfils a long-standing commitment Premier John Hamm made to Nova Scotians when he promised that a government he leads will be upfront and honest about the province's finances."

The details on the new policy of full disclosure are being finalized by staff in the Department of Finance and the Office of the Auditor General. However, the principles and the timetable have already been agreed to. By the end of September, the province will release a revised year-end forecast update for 1998-99. This report will reflect the forecast results for the year-end using the new accounting standards. These standards include consolidation, as well as other issues, to bring the province into compliance with Generally Accepted Accounting Principles.

"These changes will make it much clearer to everyone what services actually cost, and how much debt has actually been built-up," said Mr. LeBlanc.

Although work is not complete, it appears that the results will show a significant deficit for 1998-99. For the first time the provincial deficit will include Crown corporations such as Sysco and Nova Scotia Resources. It will also include the financial results of other major provincially funded or owned entities such as the Municipal Finance Corp. and the Halifax-Dartmouth Bridge Commission. Calculating a final audited consolidated statement that includes all major entities for 1998-99 will require more time, but it is expected to be completed with the release of the Public Accounts later this year.

The final audited financial report will be in substantive compliance with most Generally Accepted Accounting Principles. The major exceptions will be for the reporting of tangible capital assets and the accounting for pensions. The research required to implement these changes will be complete in early 2000. Full and complete consolidated statements, in complete compliance with Generally Accepted Accounting Principles, including comparisons with the previous year will be released next fall for the year ending March 31, 2000.

NOTE TO EDITORS: Finance Minister Neil LeBlanc will be available after 10 a.m. today to comment on changes to accounting policies.