Province Posts Higher Surplus in 2005-06

The province of Nova Scotia ended the 2005-06 fiscal year with a surplus of $228 million and a lower net direct debt, according to annual financial statements released today, Sept. 29.

The 2005-06 public accounts, which detail the financial results of the year ended March 31, 2006, show that revenues exceeded expenses by $228 million, $165 million higher than budgeted.

Nova Scotia's net direct debt -- the difference between the province's financial liabilities and financial assets -- dropped for the second time in as many years. As of March 31, net direct debt was $12.2 billion, $66 million lower than the previous year.

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

"Nova Scotia's financial results for the last fiscal year are very positive," said Finance Minister Michael Baker. "We made some key investments in our province's future, while reducing our debt for the second year in a row."

Revenues from all sources were $7.8 billion, up $459 million from the year before. This was largely due to increased offshore royalties and fees for offshore licence forfeitures, along with higher provincial income tax revenues and increases in federal transfer payments.

The province of Nova Scotia's total expenses were $7.6 billion, $401 million higher than the previous year. The results reflect a $49 million decrease in debt servicing costs.

Government made a number of additional strategic investments in economic development, health, universities and other areas in 2005-06. Net program expenses of the consolidated fund - representing most government programs and services - exceeded the budgeted amount by $70 million, or 1.3 per cent, for a total of $5.6 billion.

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 2005, with real Gross Domestic Product growth of 1.3 per cent and unemployment dropping to 8.4 per cent.

All three bond rating agencies recently acknowledged Nova Scotia's financial progress with upgrades to the province's credit rating.

The March 31, 2006 financial statements are in accordance with generally accepted accounting principles. Nova Scotia's auditor general has signed off on the statements by providing an unqualified auditor's report that is reproduced in the publication.