Budget Highlights for Fiscal Year 2015-16

Budget 2015-2016 holds the line on spending, restructures and reduces the size of government, and continues to clear the way for private-sector growth.

BUDGET OVERVIEW
The budget focuses on the core responsibilities of government and makes the changes needed to protect key government priorities like health care, education and support for seniors and low-income Nova Scotians.

Revenues for 2015-16, including net income from government business enterprises, are an estimated $9.9 billion, a 3.7 per cent increase from 2014-15. Expenses are an estimated $10 billion, an increase of 0.9 per cent from 2014-15. The projected deficit is $97.6 million.

DEPARTMENTAL SPENDING
Budget 2015-16 holds the line on spending by focusing on the core responsibilities of government and making structural change that will make it work better and cost less. By making thoughtful, strategic spending decisions and reductions, overall departmental spending is up 0.7 per cent over 2014-15, when taking into account wage increases that were some of the highest in Canada for the sectors.

• Begin to right-size the civil service by reducing 320 full-time equivalent jobs as government restructures programs and services
• Program Review to date will save taxpayers $119 million. Program Review has become a permanent initiative with future savings contributing to sustainable finances
• Department of Health and Wellness spending will rise 0.8 per cent, the smallest increase in more than a decade. Five other departments have smaller budgets than last year
• Invest an additional $20.4 million this year to renew, refocus and rebuild our education system
• Protect our vulnerable citizens by increasing funding to a number of programs

HEALTH AND WELLNESS Nova Scotians invest greatly in their health system, yet the province faces significant economic, fiscal and demographic challenges that put exceptional pressure on that investment. Budget 2015-16 will ensure the more than four billion health dollars are spent wisely to address the health needs of the population today, and the future.

• The Nova Scotia Health Authority (NSHA) came into place April 1, 2015, with a new, streamlined leadership team and volunteer board
• Work with the NSHA and IWK Health Centre to develop the province's first, multi-year provincial health plan that will ensure the most effective and efficient use of resources
• $2.6 million to develop the One Person One Record plan, which if fully implemented, will become a single, secure electronic record that connects all of a person's health information
• $700,000 to expand the Sexual Assault Nurse Examiner program to two more areas
• $2 million more to help address orthopaedic surgery wait times, providing 450 more surgeries
• Increase age of eligibility from 19 to 25 years for insulin-pump funding
• Expand vaccinations for meningococcal meningitis, including introducing the quadrivalent meningococcal vaccine in the school program
• Add the Human Papillomavirus Vaccine (HPV) for Grade 7 males through the school program
• Provide Early Intensive Behavioural Intervention to meet the needs of pre-schoolers with autism preparing to enter school
• $1.8 million to provide the Caregiver Benefit to support 385 more families (additional funding)
• $3.8 million for home-care services (additional funding)

STUDENT SUCCESS
Budget 2015-16 directly supports Nova Scotia's Action Plan for Education. Funding will help to ensure children have the support they need for a positive start to school, and that students benefit from a quality Primary-to-12 education, doing better in core areas like math and literacy. Budget 2015-16 also provides the funding universities need to protect quality over the long term. Budget decisions are also focused on keeping education accessible for Nova Scotia students studying at Nova Scotia universities.

• $3.6-million increase for grades Primary to 2 class-size caps, $3.45 million for grades 3 and 4 class-size caps
• $3-million increase for the math strategy; $4.4 million for early literacy (a $973,000 increase)
• $6.5 million towards Nova Scotia's Action Plan for Education
• Offer early intervention in math for grades Primary to 3 students
• $1.3-million increase to reduce the wait lists for community-based Early Intervention
• $700,000 increase for Early Learning Initiatives; $500,000 increase for four new SchoolsPlus sites
• $3.2 million to increase university operating grants by one per cent
• Allow universities to make one-time market adjustments to tuition, to charge similar amounts for similar programs. Maintain the three per cent cap on tuition increases for Nova Scotia undergrads once market adjustments are applied; remove cap for out-of-province and graduate students
• $1.6 million in up-front grants to help more Nova Scotia students pay for school
• Forgive up to $15,000 in provincial student loans for Nova Scotia students at Nova Scotia universities through the Nova Scotia Loan Forgiveness Program
• $24.8 million to maintain the Nova Scotia Bursary, which automatically takes $1,283 off tuition for Nova Scotia students studying here at home
• $3.8 million for the 0 Per Cent Interest Program, to pay the interest on provincial student loans for Nova Scotia graduates

TAX MEASURES
Government will take a long-term, measured and thoughtful approach to implementing changes to Nova Scotia's tax system. Fairness, simplicity, competitiveness and sustainability will guide government decision-making, as it makes every effort to ensure that changes to the taxation mix do not harm vulnerable Nova Scotians.

• Maintain the volunteer firefighter and ground search and rescue tax credit, as well as HST rebates on children's clothing, footwear and diapers, feminine hygiene products and printed books, and maintain the Affordable Living Tax Credit
• Increase tobacco taxes by two cents per cigarette, two cents per gram of fine-cut tobacco and two cents per pre-proportioned tobacco stick
• Lower the non-eligible dividend tax credit, which has not kept pace with changing conditions, from 5.87 per cent to 3.5 per cent
• The Film Industry Tax Credit will give companies the first 25 per cent as refundable, but the remaining 75 per cent of the credit will be applied to any taxes owing
• These changes take effect July 1, 2015 to ensure projects currently in progress can continue
• Eliminate the Healthy Living Tax Credit which is not helping low-income Nova Scotians

PROGRAM AND SERVICE REVIEW AND STRUCTURAL CHANGE Over the decades, government has introduced a complex web of often overlapping programs that need rigorous examination and review to respect and maximize taxpayer dollars and ensure value.

• Program Review to date will save taxpayers $119 million. Savings come primarily from:
• program changes ($10.2 million) that include converting seven underutilized camping parks to self-registration, closing two underutilized visitor information centres, and ending the Environmental Home Assessment Program and a duplicated flood-mitigation program
• grant and tax changes ($56.8 million) that include rebalancing support to the creative sector by revising the Film Industry Tax Credit and phasing out equity investments in film projects. The changes also include refreshing the Sustainable Transportation Strategy and eliminating the out-of-province university student bursary
• structural changes ($42.7 million) that include eliminating the Department of Economic and Rural Development and Tourism, phasing out the Nova Scotia Gateway Office, merging Nova Scotia Lands and Waterfront Development Corporation Ltd. to eliminate duplication, eliminating Film and Creative Industries Nova Scotia and consolidating Land Registry Offices to five locations to reflect declining office visits and increased online use
• other changes ($9.4 million) that include various revenue adjustments and administrative efficiencies
• Program Review is now a permanent part of government that will deliver more savings and efficiencies as government moves to sustainable finances

BUSINESS AND INNOVATION
Government has an important role to play in clearing the way for the private sector to pursue growth by maintaining a policy and regulatory environment that creates a climate to enable business and social enterprise growth. Budget 2015-16, will take a bold new approach to economic development and innovation, supported by major structural change.

• New Department of Business will help create one of the most competitive and business-friendly environments in Canada, allowing the private sector to drive economic growth in Nova Scotia.
• Provide strategic planning and policy direction, foster entrepreneurship and innovation, and ensure business development is co-ordinated across government and beyond
• Department will house the Office of Regulatory and Service Effectiveness to implement regulatory recommendations in the Nova Scotia Tax and Regulatory Review and work with New Brunswick to create a modern, consistent and fair regulatory environment
• $2 million this year to Invest Nova Scotia for initiatives that provide broad economic benefits across the province
• $400,000 for Brilliant Labs in all eight school boards, to help teachers incorporate technology, creativity and entrepreneurship in the classroom
• $1.6 million this year for the Graduate to Opportunity program

CREATIVE ECONOMY
The contributions made by all businesses in the creative sector help to drive our economy. Budget 2015-16 will align the creative sector with Nova Scotia Business Inc. to provide business development support and promotion for creative industries. Government will provide almost $70 million this year in support of the cultural sector, including:

• $12.5 million in direct culture and heritage development programming, including $2.6 million for Arts Nova Scotia
• $14 million for libraries
• $10 million in operational funding and programming, including museums and the Art Gallery of Nova Scotia
• $24 million for the Film Industry Tax Credit
• $7.5 million for the Digital Media Tax Credit
• Government will rebalance industry funding, creating a climate that supports entrepreneurship, innovation and growth in business and social enterprise
• The $6-million Creative Economy Fund will begin April 1, 2016, and NSBI will work with the sectors in establishing the criteria for the fund

WAGE CHALLENGE
The inflated wage pattern of the past several years has prevented a return to balance. The fact that economic growth stalled in tandem with this wage pattern made the situation even more difficult.

• The generosity of two, 2.5 and three per cent wage increases has left a major burden for all Nova Scotians
• Real economic growth in this period was only 1.6 per cent
• Over $700 million in total was added to government's labour costs over the last three years - these costs are now embedded permanently
• 58 per cent of our departmental spending is spent on wages - about $5.2 billion of the province's total budget of $8.9 billion
• If labour settlements had matched the real growth in the economy, our wage bill would be $300 million lower and we would have a $200-million surplus
• Government has announced a three-year wage freeze for excluded employees and froze their public service awards