Nova Scotia reports lower than forecast deficit as health spending delayed

HALIFAX – Just seven months after Nova Scotia’s government warned of troubling revenue declines, its finance minister has announced the final deficit number has plummeted $87 million lower than original budget estimates.

Randy Delorey provided the $10.7-million deficit figure in the consolidated financial statements released Tuesday.

He pointed to fresh numbers on revenues, with taxpayers chipping in about $25.3 million more than original budget forecasts in income taxes, as part of the rosier picture.

“The 2015-2016 public accounts demonstrates we are on the right track and continue to move toward a sustainable, balanced budget,” said Delorey in a news conference after the figures were released.

The figures also confirmed spending restraints in areas such as long-term care for the elderly and continuing delays in spending on health infrastructure.

The documents say that expenses at the Health Department fell $31.3 million, “primarily due to savings of $28 million in capital grants as a result of delays with major construction projects.”

There was also about $6.8 million less in expenses for various health programs, including delays in information technology projects and savings on long-term care spending.

Opposition critics pounced on the announcement as a signal of service cuts, and raised questions about why Delorey’s pessimism in December evaporated after the Liberals pushed through wage restraint legislation affecting public sector unions.

Tim Houston, the Conservative finance critic, said he’s not convinced the figures on rising tax revenues reflect a healthier economy, adding that at best Nova Scotia is “inching forward.”

He was critical of the wide swings from the original budget estimate of a deficit of $97.6 million down to the final figure that is almost one tenth of that.

“I don’t think any company would take great comfort there is so much instability and swings in the numbers,” he said.

NDP leader Gary Burrill said deficit reductions came at the expense of nursing home budgets, a lack of new facilities for the elderly, and cuts to community-based organizations that provide mental health support.

“In my judgment the price that has been paid for this has been far too high,” said Burrill.

Burrill also expressed suspicion about the turnaround in the government’s tone since the dire December budget forecast — which came as the province indicated it would impose a wage package on its public servants.

The Dec. 14, 2015 forecast said “provincial tax revenues are forecast to decline” by close to $80 million.

Meanwhile, just before Christmas, Premier Stephen McNeil’s government pushed through the Public Services Sustainability Act.

If proclaimed, the law would impose a two-year wage freeze on nearly all public servants in the province, followed by a three per cent raise over the following two years.

However, Delorey said the dire forecast was simply reflecting the realities of figures his department was receiving at the time from Ottawa, and a sharp reduction in offshore natural gas royalties due to the decommissioning of a major project.

The documents show the province is continuing to see its overall debt grow.

The finalized figures show the province has a debt of $15.1 billion, up $66.3 million from 2014-15.