N.S. delivers modest help in surprise-free budget
The Dexter government has sprinkled in modest tax breaks and initiatives for low-income Nova Scotians in what it says will be its last deficit budget before an expected election.
The 2012-13 budget, unveiled Tuesday, contains few surprises since many cuts and spending announcements have already been made.
The NDP government expects to overspend by $211.2 million in 2012-13, but promises a balanced budget after that — which could be an election year.
"There are no magic wands, no silver bullets, no quick fixes on the path back to balance," said Finance Minister Graham Steele.
"There is only a good plan, hard work, and sustained discipline. That is what Budget 2012 delivers."
The NDP says it's limiting the growth of government and shuffling money from one department to another. Its projected deficit for 2011-12 is less than first anticipated.
The government expects to bring in $9.27 billion — $391.7 million more than the last fiscal year. Income taxes and HST account for about half of that, with federal transfers accounting for much of the rest.
However, the NDP expects to spend $9.5 billion, with $8.5 billion going to the departments. The rest of the money is to finance the province's net direct debt, which is expected to climb to $13.7 billion next March.
It's been a tough few years, Steele said, but Nova Scotia's prospects are looking good. He cited the federal shipbuilding contract, the Lower Churchill hydroelectricity link, as well as Shell Canada's offshore exploration plan.
This comes as royalties from oil and gas projects are expected to drop 74.9 per cent this year, to just $27.7 million.
Only 13 per cent of Nova Scotians will get a break on income tax.
The budget includes modest tax breaks for seniors, Nova Scotians with disabilities and people with dependents. The most anyone will save is $203 — and that's if they're disabled.
Two tax credits for low-income Nova Scotians are going up. The Affordable Living Tax Credit will mean $255 for an adult and $60 for a dependent child. The Poverty Reduction Credit will be $250.
Seniors who are eligible for the guaranteed income supplement will get back anywhere between $50 and $10,000, money they would pay in provincial taxes. Only six people were eligible for the highest amount last year.
"We would like to do more but we’re doing what we can," Steele said.
The HST remains at 15 per cent, but the government promises to cut that to 13 per cent starting in 2014 — after its four-year mandate is up.
The income tax rate for small business is dropping to 3.5 per cent from 4.0 per cent, as of next January. This is expected to save businesses $10 million a year.
The large corporation capital tax is eliminated, as promised earlier.
At $3.86 billion, health continues to be Nova Scotia's biggest expense. Spending is up slightly from last year.
Steele said this isn't surprising, even though funding cuts to the nine health boards and IWK Health Centre were announced well before the budget.
"I don’t think anyone went into this process thinking there would be an actual reduction," he said.
Up to four more collaborative emergency centres are expected to open this year, which means an extra $2 million for staffing.
This includes Tatamagouche, which has already been announced.
An extra $20 million is going into home care. The province expects to spend $17 million less on prescription drugs this year as it reaps the rewards of its Fair Drug Pricing law.
Education is the second largest spending expense by department. At $1.11 billion, that's down from $1.13 billion last year.
Like with the health boards, the government announced it was cutting funding to the school boards months ago.
As for new initiatives, the province is bringing in a new course in Grade 11 to get students ready for jobs in manufacturing.
Jobs and training are key focuses of this budget.
There is $1.5 million to help businesses compete or expand internationally.
There is $400,000 for a new graduate placement program to help Nova Scotia students find jobs in the province. It's a wage subsidy that is expected to support 50 graduates this year. The province will pay half their salary for their first three months on the job.
The government plans to continue to push the trades, putting money into apprenticeships and workplace education.
There are no changes to the $610-million capital plan that was announced last fall.
Highways and bridges account for nearly half of the capital money, at 46.1 per cent. This is $281 million to upgrade roads, such as Highway 104 near Antigonish.
Other projects include renovations to the South Shore Regional Hospital and new or upgraded schools in Baddeck, Dartmouth, Glace Bay, Liverpool and New Glasgow.
The government is closing its office in Ottawa, which should save $505,000 a year. It was set up to lobby the federal government on issues important to Nova Scotia.
Former MP Bill Casey — who was kicked out of the Tories for voting against his party — currently runs the office.
Steele said Casey did a good job but there are other ways to lobby for the province.
"When you can’t do everything you have to make choices," he said.
The Dexter government is in its third year of a four-year mandate. It warned of cuts and austere measures as it tried to get the province's finances back in order.
Nova Scotia's debt-to-GDP ratio is currently 35.2 per cent, putting it near the bottom of the list of provinces. One rating has it in fourth place from the bottom.
But the government expects the province to climb higher in the next few years due to spending constraints and a steady growth in the economy.