No New Equalization Money for Nova Scotia

Nova Scotia will not receive any additional money from the federal government for equalization transfers for the current fiscal year, Finance Minister Neil LeBlanc said today.

Earlier reports had claimed Nova Scotia would receive more than $90 million in transfer payments from Ottawa for 2001-02, but the province's finance minister said that claim is incorrect.

"We will actually receive $5 million less than what we had anticipated, and that is what the federal government has now confirmed," Mr. LeBlanc added.

"The federal government is recognizing that our projections are more accurate than their own," he said.

"We had already taken several economic conditions into account at budget time last year and updated our calculations again in the fall to reflect the economic slowdown around the country during the second half of the year."

The finance minister said the province has reliable information about the provincial economy, which allows his staff to make reasonable projections, while the federal government bases its calculations on existing data and does not project into the future.

"The federal Department of Finance has made the adjustments to bring their numbers closer in line to what the province forecast," Mr. LeBlanc said. "Nova Scotia will not receive any new money as a result. As we get closer to budget day, these numbers will likely change again, as we get more current data to plug into the equalization formula."

He added that because of the different formulas applied by both governments, the federal numbers will probably differ by several million dollars again next year.

The recently released federal numbers cover the past three years and will have little bearing on the upcoming budget.