Budget Bulletin: Debt Management

Nova Scotia continues to make progress when it comes to managing our long-term debt. Two successive balanced budgets have put us on the right path. The release of A Balanced Approach to Surplus and Debt Management by the Department of Finance highlights our commitment to manage our debt appropriately, according to all generally accepted accounting principles.

In the past three years, as a result of carefully controlled spending and a growing economy, one of the most important economic indicators, which shows our net direct debt as a percentage of the province's overall economic activity, has improved. What this means is that the burden of debt carried by taxpayers is less onerous. We have a greater ability to repay our debt.

The ratio of net direct debt (NDD) to gross domestic product (GDP) has dropped from more than 46 per cent in 1999-2000, to an estimated 41.1 per cent for the fiscal year 2003-04. It is progress. And it shows that the province's strategy of managing the debt is working.

While the ratio of net direct debt to overall economic activity continues to decline, the actual debt will increase in 2003-04, to $11.8 billion, because we continue to borrow to build new schools, and improve highways. These are assets that will provide real benefits to Nova Scotians for years to come.

The cost of servicing the province's debt will increase to $893 million in 2003-04, from $883 million last year.

NOTE: For further 2003-04 budget information, visit the Department of Finance Web site at www.gov.ns.ca/finance .