Nova Scotia's Liberal government presented a $9.9-billion budget on Thursday with a projected deficit of $279 million, while warning the province of tough times ahead.
Finance Minister Diana Whalen had warned that the budget would be in the red, and while revenues are up slightly mainly due to a bump in personal income tax, that's offset by $455 million in increased spending.
"The status quo in our province is not working," Whalen said Thursday in her first budget address in the Nova Scotia House of Assembly.
"We are facing significant economic and fiscal challenges. Our population is shrinking and aging. And while there are some positive signs on the horizon in terms of economic prospects and growth, there remains a steep hill to climb."
In total, the government will increase spending by $455 million this year — a 5.4 per cent jump — with the largest departmental spending increases in the Department of Health and Wellness and the Department of Education.
Most of the spending increases are due to previously negotiated wage settlements and election commitments.
The province's net debt is now $14.6 billion and is projected to hit $15 billion by the end of this fiscal year. At $14.6 billion, the debt amounts to about $16,000 for every man, woman and child in Nova Scotia.
"These are the realities facing our province. Investments in health and education are critical for the well-being of our citizens as are investments in social supports, infrastructure and the primary industries that help drive the economy," Whalen said.
"But we do have to make choices. We cannot do everything and we cannot continue to do what we have always done."
The budget for the Department of Health and Wellness — the province's largest expenditure — ballooned to an all-time high of $4.1 billion.
The $194-million increase over last year includes $4.2 million to try to reduce wait times for hip and knee replacements, $32.6 million to fund more home-care services and another $10.6 million for programs aimed at recruiting and hiring doctors in rural areas of the province.
"We are at a crossroads with our health-care system," Whalen said.
"While this problem is not unique to Nova Scotia, we do need to find solutions that address our unique demographic and health challenges."
Whalen had said the government would be laying out the beginnings of a plan of fiscal prudence that would lead to a surplus.
She had also warned the government was still trying to find its fiscal feet after six months in power and suggested bolder measures would likely have to wait until next year.