Government Committed to a Balanced Budget

The provincial government is committed to a balanced budget and is making some "course corrections" to get there, Finance Minister Peter Christie said today, Sept. 19, when he released the province's update on the 2003-04 budget.

"This government remains committed to a balanced budget," Mr. Christie said, "but challenges and uncertainty lie ahead."

A national economic slowdown and increased health-care costs in the district health authorities are the primary reasons for a new budget surplus projection of $500,000. The minister said the government will reduce $32 million in spending to balance the budget.

Slower consumer spending is affecting provincial revenues. Lower than anticipated revenues from HST, fuel and tobacco taxes are responsible for the drop in income. The current revenue forecast is $19.6 million lower than the budget estimate.

"In addition to lower than projected revenues, the province continues to face increased demand for spending in health care," Mr. Christie said.

Increased funding to the district health authorities is adding $19.2 million to the budget forecast.

To offset the anticipated revenue decline and meet additional spending pressures, the government will be reducing spending in most other areas to ensure that the budget remains balanced.

Mr. Christie said, "We have developed a budget management plan that is designed to keep us on target. Government departments and organizations will be required to reduce spending by up to one per cent of their previously approved budget. We expect this measure will return about $32 million to our balance sheet."

The minister said the cut does not affect funding for patients in need of direct hospital care, or for students in grades primary to 12.

A revised economic outlook for 2003 projects real GDP at 2.3 per cent, compared to 2.9 per cent at budget time. Employment growth is holding steady at 1.8 per cent.