Nova Scotia budget deficit grows to over $241M
Total revenues for 2015-16 are forecast to be $9.8 billion
Nova Scotia's deficit continues to grow. The latest fiscal update forecasts the province will end the year $241 million in the red.
When the Liberal government brought in their budget last spring, they planned to end the year with a $97.5 million deficit.
The reason that didn't happen isn't overspending — it's that almost every revenue source is down. Tax revenue fell across the board:
- Personal income taxes down $18 million
- Corporate income taxes down $45 million
- Harmonized sales tax down $3.6 million
- Motive fuel taxes down $5 million
- Tobacco tax down $5.3 million
The picture isn't any better when it comes to other provincial revenue such as petroleum royalties, which are down $2.6 million.
There's also a whopping $86-million hit to the province in what is called a prior year's adjustment. It's a one-time adjustment to fiscal items that have been reported using estimates in previous years by the province, but are now only being closed with final figures.
It's a line item that can fluctuate wildly and includes a variety of forecasted figures.
Department spending close to budget
Finance Minister Randy Delorey summed up the budget update.
"The reality is that right now we're hit with a scenario in the economy that is affecting all jurisdictions — our entire country," he said.
"The federal government recently gave an update. They too are showing significant variances. This is not a Nova Scotia-isolated economic challenge."
Overall department spending is within .05 per cent of their original budgets. The department most over budget is Community Services. In September, the department overspent by $13 million. Since September it has overspent by another $14 million.
The province said the additional funds were needed primarily to cover the rising costs of child, youth and family support programs, as well a drug therapies now covered by provincial Pharmacare.
Delorey says the provincial government has made progress on keeping spending in check, but the latest budget figures show how vulnerable Nova Scotia is to negative swings in revenue.
Total revenues for 2015-16 are forecast to be $9.8 billion, down $135 million from when the budget was released.