Province Posts Higher Surplus in 2007-08

The province had a record-high surplus for the 2007-08 fiscal year, according to annual financial statements released today, Aug. 5.

The public accounts for the year ended March 31 indicate a surplus of $419 million, $301 million higher than budgeted. This is the highest surplus since the government introduced the first of seven consecutive balanced budgets in 2002.

"We have met, and in fact exceeded, our financial targets again this year," said Finance Minister Michael Baker. "At the same time, we were able to make some crucial investments to grow our economy."

Total 2007-08 revenues from all sources were $9.253 billion, $959 million higher than 2006-07. This was because of higher revenues from natural gas royalties, income taxes and the federal Crown Share payment.

Total expenses from all sources were $8.834 billion, $723 million higher than 2006-07, as the government continued to address spending priorities in health care, education and universities.

Financial results of the consolidated fund, which includes government departments and public-service units, showed an overall increase in revenue of $886 million compared with the previous year, and $506 million more than budgeted.

Consolidated fund expenses were $625 million higher than the previous year, mainly because of increased costs in health and education, as well as Crown Share commitments. They were $193 million, or 2.4 per cent, more than budgeted.

Nova Scotia's net direct debt, the difference between the province's liabilities and financial assets, decreased $242 million to $12.1 billion in 2007-08. This is consistent with the province's debt-reduction plan, which required government to budget for debt reduction last year.

"In addition to the funds budgeted in 2007 for debt reduction, we have a Crown Share agreement that will further reduce the debt this year," said Mr. Baker. "We have also committed to applying the rest of the Crown Share settlement to the surplus in the years ahead."

Provincial debt as a percentage of Gross Domestic Product dropped from 48.7 per cent in 1999-2000 to 35.9 per cent in 2007-2008.

The consolidated fund spent $315 million on tangible capital assets, or $44 million more than budgeted, to accommodate additional spending on roads, schools, and other infrastructure.

Nova Scotia's economy recorded a slightly higher level of growth compared with 2006. Real Gross Domestic Product grew 1.7 per cent in 2007 compared with 0.9 per cent in 2006.

Overall employment levels increased 1.3 per cent, and unemployment increased to 8.0 per cent, compared with 7.9 per cent in 2006.

The March 31 financial statements are in accordance with generally accepted accounting principles. Nova Scotia's auditor general has provided an unqualified auditor's report that is included in Public Accounts Volume 1.