Nova Scotia Unaffected by Federal Decision on Tax Overpayments

FINANCE--Nova Scotia Unaffected by Federal Decision on Tax Overpayments

Nova Scotia Finance Minister Neil LeBlanc said he is relieved that Nova Scotia will not be unduly penalized for a federal government accounting error, discovered last January.

"Nova Scotia will not receive any new money from Ottawa, but neither will we be slapped with a clawback on federal transfers from previous years," said Mr. LeBlanc.

The federal government overpaid some provinces a total of $3.4 billion under the tax collection agreements from 1993 to 1999. While Nova Scotia was not directly affected by the overpayments, federal transfer payments could have been adjusted downwards without the clarification announced Wednesday, Sept. 4.

The minister said he is pleased the federal government came up with a solution to deal with the error. He said that the information should remove some of the uncertainty surrounding any possible repayment by Nova Scotia for the past several years.

"We are not yet free and clear of any potential repayment to the federal government," said Mr. LeBlanc. "There may still be an adjustment for the years 2000 and beyond, but the magnitude of such an adjustment will not be known for some time."