Financial Accountability Plan on Track

The Nova Scotia government's four-year fiscal plan is on track, with the province expecting to record a slightly smaller deficit this year than was estimated in the budget of April 2000.

The quarterly update released today for the period ending June 30, 2000, forecasts a deficit of $261.8 million, $6.3 million less than estimated in April.

"So far, so good," Finance Minister Neil LeBlanc said today. "These numbers represent only the first three months of the fiscal year, and it is encouraging to see that our targets are within reach. But it is still very early and we will not become complacent. There is a lot of year left ahead of us."

Figures also show department spending to be relatively on track, coming within less than a third of a percentage point over the amount budgeted.

"Still, one-third of a per cent of a $4.1-billion budget is $13 million, which is a lot of money by any standard," Mr. LeBlanc said. "We'll be working to close this gap over the coming months."

Revenues from harmonized sales tax and personal income tax are forecast to be $24.1 million higher than budgeted. Prior years adjustments, which are revisions to revenues collected in previous years, account for an additional $25.6 million in revenue.

The forecast deficit would have been lower but for the deficits expected at health and hospital boards. In June, these organizations were permitted to run deficits, expected to be $30.2 million for this fiscal year, recognizing that cost savings from restructuring would not be fully realized in 2000-01. In keeping with the government's transparent accounting policies, these deficits must be recorded when they are known.

Another change from the April budget is that the Nova Scotia economy is performing much better than expected. Real Gross Domestic Product, the measurement of all goods and services produced in Nova Scotia, is expected to increase by 2.4 per cent in 2000, 0.6 per cent higher than estimated in April.

Employment, personal income, corporate profits and exports are all expected to show greater growth than was expected in April.

The government's four-year fiscal plan includes progressively smaller budget deficits for the first two years, followed by a balanced budget in 2002-03 and a personal income tax cut in 2003- 04.

NOTE TO EDITORS: Finance Minister Neil LeBlanc will be available to the media in Province House following today's cabinet meeting, at about 11:30 a.m.

The Year End Forecast Update is available on the Internet at www.gov.ns.ca/finance . Click on Year End Forecasts and follow the links. Copies are also available in the Howe Room of Province House.