Budget Bulletin: Revenue Up from Many Sources

The province is expecting an increase of about $159 million in revenue in fiscal 2002-03, compared to the current forecast for 2001-02. Total revenues for fiscal 2002-03 are expected to reach $5.31 billion, up from $5.15 billion now forecast for 2001-02. A growing provincial economy, gas and tobacco tax increases, higher fees and higher profits from provincial Crown corporations account for virtually all the increase.

The government has asked the Nova Scotia Liquor Corporation to increase its profits by about $15 million, to $160 million in 2002-03. The Nova Scotia Liquor Corporation's business-like approach to revenue generation, marketing and promotion will help achieve higher returns based on retail price increases and improved efficiencies.

The Nova Scotia Gaming Corporation expects to increase its overall profits by $13 million in 2002-03. The gaming corporation anticipates total net revenues of $170.3 million for the year.

Economic growth will account for additional revenues, as Nova Scotia is expected to recover from the sluggish after-effects of 2001, with increasing growth through 2002. Growth is expected to accelerate to a healthy 3.7 per cent in 2003.

Increased employment is expected to add about $40 million in personal income tax revenue to the province in 2002-03. Consumer confidence is expected to remain strong, resulting in an increase in sales tax revenue of $36 million. These gains are partially offset by revenue declines elsewhere, including those from federal sources.

Nova Scotia is paying more of its own way. Three years ago the split in provincial/federal revenues was about 62/38. In 2002-03, 64 per cent of the province's revenue is coming from provincial sources and only 36 per cent from Ottawa.

Tax increases for gasoline, tobacco and gypsum production will amount to $47.1 million in added revenue in 2002-03.

The gas tax increases two cents per litre, from 13.5 cents to 15.5 cents, effective midnight April 4. The increase will add $23.2 million, all of which is dedicated to highway improvements.

A carton of cigarettes increases by $5 in provincial tax and the taxes on other tobacco products increase accordingly, also effective midnight April 4. This measure will bring in $23.6 million.

The gypsum tax will increase by four cents per ton and is expected to add $300,000 in revenue. The tax had not been adjusted since 1975 and goes from 12 cents to 16 cents per ton.

Increases in user fees, cost recoveries and the Pharmacare premium total $26.5 million.

NOTE: For further 2002-03 budget information, visit the Department of Finance Web site at www.gov.ns.ca/finance .