Government Introduces Sixth Consecutive Balanced Budget

Nova Scotia's sixth consecutive balanced budget was tabled today, March 23, at Province House by Finance Minister Michael Baker. The budget focuses on debt management and making key investments now to ensure the province prospers in the future.

The province's $7.3-billion budget follows through on tax breaks for consumers and business, and includes targeted investments in communities, cancer care, recreational infrastructure, IT, education and health promotion.

"We are making significant investments that will create opportunities for many years to come," said Mr. Baker.

The province is projecting improved economic growth in 2007, with real GDP anticipated to grow by 2.3 per cent.

The budget forecasts an increase of $440 million in ordinary revenue over last year's budget. Offshore royalties remain an important source of provincial revenues and are forecast to grow by $140.5 million from 2006-07.

"Nova Scotia is protecting and enhancing programs and services and reducing the debt, without raising personal income taxes or cutting programs," said Mr. Baker. "To do so meant choosing the federal equalization option that provided more federal funding. Make no mistake, however, we will continue to fight Ottawa for fair treatment and recognition of our offshore accord."

Nova Scotia's commitment to good fiscal management has resulted in a strong debt-management plan. This year is the first time Nova Scotia has budgeted for debt reduction. It is estimated that the province's net direct debt for 2007-08 will be $12.4 billion. That is $7 million lower than the projection for the time period under the Debt Reduction Plan released in April 2005.

"Nova Scotians still carry one of the highest debt per capita ratios in the country," said Mr. Baker. "That's why we are focusing on debt reduction. This is not an easy thing to do, but it is the right thing to do."

Net program spending is forecast to increase by $391.2 million, with more education dollars for tuition relief and several public school initiatives.

Nova Scotia is creating winning opportunities now, and in the future, through an investment of $10 million to begin bringing broadband access to every area of the province by the end of 2009. A new 10-year, $50-million program to build, replace and upgrade recreation facilities in Nova Scotia is being put in place.

The province will continue to provide tax relief to Nova Scotians in 2007-08 and beyond through changes to personal income taxes that began last year. Government will also continue to phase out the Large Corporations Capital Tax by 2012.

This year, key tax measures include increasing the amount of the graduate tax credit to $2,000, a digital media refundable tax credit of 35 per cent of eligible expenditures on digital media productions, a volunteer firefighters refundable tax credit of $250 for this year, growing to $500 in 2009, and a tours and convention credit that will complement the recently announced federal measure, to help attract tourists.

This year there will also be increases in tobacco taxes and the aviation fuel tax.

Most user fees will be increased by 6.8 per cent to help cover the rising costs of programs and services. The increase is tied to the CPI increases for Nova Scotia over the last three years. Most fees will increase on April 1. The last government-wide increase to user fees was in April 2004.

Nova Scotia consumers, regardless of income, can continue to look forward to relief from rising home-energy costs through the Your Energy Rebate Program. The estimated cost of this program is $75 million.

"We are making responsible, affordable choices for Nova Scotians," said Mr. Baker. "Choices that will make a difference to families, businesses, and communities across the province."

Other funding priorities include initiatives to provide relief to the farm sector, more long-term-care beds for seniors in the community, the promotion of healthy lifestyles, energy conservation, protection of the environment and advancement of cultural diversity.

For further budget information, see the Department of Finance website at www.gov.ns.ca/finance.