Nova Scotia Getting Back to Balance,Op-Ed

NOTE: The following is an op-ed piece by Finance Minister Graham Steele.

In the budget I delivered on April 6, I announced that the HST would be restored to 15 per cent on July 1. It's part of government's multi-year plan to get the province's finances back to balance.

Nobody likes taxes. Not you, not me, not anybody.

But we all like great public healthcare, a quality education system, decent roads, a sustainable environment, and good jobs. And it's taxes that pay for those things.

I wanted to take the opportunity to remind Nova Scotians about what this government is doing to ensure government lives within its means while at the same time protecting the vital services that Nova Scotians expect will be there for them and their families for years to come.

Last summer, the government had an independent consultant examine the province's books to get a clear picture of the state of the province’s finances. The report told us that government was spending much more than it took in and that the cost of providing goods and services to Nova Scotians was growing steadily.

The financial mess this government inherited left us on an unsustainable path to a $1.4 billion annual deficit. When we received that report, we knew that government was going to have to make difficult decisions to get back to balance.

We wish things were different. We wish the legacy of unsustainable spending we have inherited didn't exist. But it does. It is our responsibility to deal with it -- to clean up the mess -- so that Nova Scotia's future is not compromised.

Last year, I launched the largest and most extensive public consultation in the history of the finance department. Those Back to Balance consultations allowed Nova Scotians to share their thoughts on how to eliminate our deficit.

We were told, very plainly, that we cannot turn to Nova Scotians for more revenue unless we commit to using every single existing revenue dollar as wisely and efficiently as possible.

We agree. Of the $1.4 billion fiscal gap referred to above, we will eliminate $1.1 billion through spending restraint and expenditure management. Of that $1.1 billion, about $250 million will come from ongoing wage restraint in the public sector. This includes freezing the wages for MLA's, senior officials, and political staff and reducing MLA allowances.

Just as importantly, Nova Scotians also said if government was going to increase revenue, it needed to ensure that those who are most vulnerable to consumption taxes were protected.

Again, we agree.

Government's new Affordable Living Tax Credit starts today. That credit, valued at $70 million, will put money back into the hands of Nova Scotians living on low or modest incomes.

This important measure means that households earning less than $30,000 will receive quarterly payments, similar to the existing GST credit. It will return about $240 per household and $57 per dependent child every year. Those earning up to $34,800 will also receive a portion of the credit. This is the right decision for Nova Scotia families.

Government is also making life more affordable for senior citizens. Starting this year, this government will ensure that any senior who receives the Guaranteed Income Supplement will no longer have to pay any provincial income tax. This means about $12.5 million will be returned to about 18,000 senior citizens across the province. And of course, seniors with low and modest incomes will also be eligible for the Affordable Living Tax Credit.

Government also established a new Poverty Reduction Credit. This credit will return about $3 million annually to about 15,000 individuals living in poverty, many of whom are disabled. This credit will amount to $200 annually.

Also, starting today this government will eliminate the provincial portion of the HST on children's clothing and shoes, diapers and feminine hygiene products. These tax cuts alone will return approximately $7.7 million to families in every region of the province in 2010-2011, growing to over $11 million in 2011-12 and beyond.

The government already returns almost $84 million annually to Nova Scotians with the removal of the provincial portion of the HST on basic home energy.

Already, the province of Nova Scotia has made significant progress in getting back to balance. The forecasted deficit this year is $222 million down from a deficit forecast of $592 million just last fall.

Together with Nova Scotians we are accomplishing this using a balanced approach of reduced spending, growing the economy and increasing revenue.

We are accomplishing this while still protecting those Nova Scotians with the lowest incomes.

And we are accomplishing this because we must take on the hard the work to get back to balance in order to protect critically important services like health care and education.