Budget Forecast Update Shows Continued Savings

Nova Scotia is making progress toward living within its means according to the provincial budget forecast released today, Dec. 22, but Finance Minister Graham Steele warned the province still faces serious long-term fiscal challenges.

The province is now forecasting a surplus for this year of $97.2 million. The surplus is a result of a number of one-time changes in revenue sources, tax revenue, pension valuation adjustments, delayed and reduced departmental spending, lower debt servicing costs and prior year adjustments.

"Although we are making genuine progress, Nova Scotia has not yet turned the corner when it comes to our deficit," said Mr. Steele. "The immense fiscal challenge facing this province exists today, just as it existed yesterday and just as it will exist when we bring forward a new budget in spring 2011."

The quarterly update shows a surplus because it does not include typical annual expenditures for university funding or funding for student bursaries. In 2009-10, the expense for universities was about $360 million.

Although no decision has been made for the amount next year, these expenses will recur next year and every year thereafter as the province transitions back to annual budgeting for these expenses.

Delays in planned projects also add to the expenses next year. The province still anticipates a significant deficit, about $370 million, as predicted in the four-year plan that accompanied the spring budget.

The budget forecast update shows that departmental spending stayed within the reduced levels set by the budget. Delayed spending and cost control means every department, with one exception, has forecast expenses on, or below, budget. The exception was Transportation and Infrastructure Renewal, which is over, in part, because of storm damage in Meat Cove and southwestern Nova Scotia.

Mr. Steele used today's budget forecast to re-affirm government's commitment to continue to reduce spending in the years ahead.

"There will be no government spending spree in March, we will continue to exercise wage restraint in the public sector and continue our plan to have departments, agencies, boards, and commissions work on budget-reduction scenarios," he said. "Today, I am happy to see positive results, and give credit to the individuals and organizations that are helping us live within our means. But we cannot, and will not, let that distract us from continuing the hard work to get back to balance."