Province's Fiscal Plan on Track

Figures released today show the Nova Scotia government's fiscal plan is on track, with a slightly smaller deficit than expected for 2000-01.

The forecast deficit of $259.8 million, $8.2 million less than estimated in the April budget, could have been much lower, but for increased departmental and debt-servicing costs.

"Virtually all other areas of spending are under control or have experienced manageable increases, but health-care costs continue to be a major challenge," Finance Minister Neil LeBlanc said today.

"While the cost of providing quality health care remains a concern, the most important number is on the bottom line, and that number shows our fiscal plan to be on course for this year," said Mr. LeBlanc.

Revenues are forecast to be $105.2 million higher than budgeted. More than half this increase is from personal income taxes ($28.2 million) and federal equalization payments ($28.8 million). Adjustments to prior years' payments ($45 million) account for most of the rest. HST revenues are forecast to be up because of changes made by the federal government to the estimated total of the national HST and GST revenue pool. Petroleum royalties are forecast to increase $3 million. Fuel tax revenue is forecast to be down $12.3 million. The drop is due in part to a $5 million rebate to a commercial gasoline retailer and in part to lower- than-expected gasoline sales. The slumping Canadian dollar has caused the forecast for debt servicing costs to increase by $10 million.

Departmental spending is forecast to be $34.9 million higher than budgeted in April. Higher health-care, education and community services spending accounts for most of the increase. These increases were offset by lower-than-budgeted spending in other areas, primarily restructuring costs, which are forecast to be $10 million less than anticipated. Delayed implementation of hospital and health board business plans accounts for a $34.5 million forecast increase in those areas.

Mr. LeBlanc also released the 1999-2000 year-end financial statements. These figures show that the province finished the last fiscal year with a $773.2 million deficit, one per cent above the deficit forecast in April. Of this deficit figure, $475.3 million represents an accounting provision for environmental clean-up, pension liability and severance costs associated with Sydney Steel Corporation. This provision was first reported in the March 2000 forecast update.