Province Posts Higher Surplus in 2004-05

The province of Nova Scotia ended the 2004-05 fiscal year with a $165-million surplus and a lower net direct debt, according to annual financial statements released today, Sept. 28, in Halifax.

The 2004-05 public accounts, which detail the financial results of the year ended March 31, 2005, show that revenues exceeded expenses by $165.3 million, $127 million higher than the year before.

Nova Scotia's net direct debt -- the difference between the province's financial liabilities and financial assets -- dropped for the first time in many years. As of March 31, net direct debt was $12.3 billion, $19.4 million lower than the previous year.

"The government of Nova Scotia has been working to slow the growth of Nova Scotia's debt in recent years, and it's gratifying to see our net direct debt drop earlier than expected," said Finance Minister Peter Christie. "We still have a long way to go, but it's an important milestone."

This is the fourth year in a row that the province has brought in a balanced budget and recorded a surplus in its year-end financial statements.

Consolidated fund revenues were $283 million higher than budgeted in 2004-05. This was largely due to increased revenues from federal transfers, provincial corporate income tax, and offshore forfeiture payments.

This gave government the opportunity to make a number of strategic investments in economic development, health, and other areas. Net program expenses of the consolidated fund exceeded budget by $115 million in 2004-05. Government also designated $60 million for much-needed capital infrastructure improvements in 2005-06 and 2006-07.

In 2005-06, the province paid off $830 million in unmatured debt with funds from the federal offshore offset agreement. The $830 million will be recognized for accounting purposes in 2005-06 and beyond.

Provincial surpluses in the last five years have been factored into net direct debt. Net direct debt is scheduled to drop again in 2007-08 under the province's legislated debt reduction plan.

Nova Scotia's economy performed well overall in 2004-05, with 1.3 per cent real economic growth and unemployment dropping to 8.8 per cent in 2004 from 9.1 per cent in 2003.

Bond rating agencies have responded to Nova Scotia's positive indicators by upgrading the province's credit rating and outlook in 2004 and 2005.

As part of ongoing efforts to make financial documents more understandable, government revised the content and layout of the Public Accounts 2004-05 Volume I document. The content changes are consistent with the recommendations of the public sector accounting board.

"One of our goals this year is to improve our financial documents to help Nova Scotians understand the province's financial picture," Mr. Christie said. "It's part of our commitment to transparency and accountability."

The March 31, 2005 financial statements are in accordance with generally accepted accounting principles (GAAP). Nova Scotia's auditor general has signed off on the statements by providing an unqualified auditor's report that is reproduced in the publication.