Nova Scotia ended the 2010-11 fiscal year with a $447-million surplus, Premier Darrell Dexter said Monday during a speech in the legislature.
"Tonight, I can announce that through good fortune and good management, not only did the NDP balance the budget on the schedule we outlined, it has proven possible to reduce the net debt of this province, in the year that just ended," he said.
"I am also pleased to announce that in 2010-2011 spending was to be reduced by $133.5 million, because the NDP doesn't just talk the talk about spending control. This is a government that really does control spending."
Dexter said the surplus would allow the province to reduce its net debt for only the seventh time since 1951.
"And we will be one of only a few jurisdictions in North America that will pay down their debt this year," he said.
"Nova Scotia's better-than-expected performance through the economic recession and deliberate efforts to control government spending resulted in a larger-than-expected surplus.
"Rather than spend this surplus at year-end, which has been the practice of past governments, we took the view 'a penny saved is a penny saved' and used the funds to reduce the provincial debt."
The difference between the estimated deficit of $222.1 million for 2010-11, and the forecasted surplus is:
- $133.5 million in reduced departmental spending.
- $80 million in reduced debt servicing costs.
- $39.4 million in other savings.
- $220.3 million in better than estimated provincial revenue.
- $196.1 million in prior-year revenue adjustments.
With the year-end surplus, the province eliminated the need to borrow money to pay for infrastructure and reduced the provincial net debt to $13 billion as of March 31. That is nearly $1 billion less debt than forecast.
"We did not spend the surplus. The NDP is using the surplus to reduce the debt of the province," Dexter said.
"Simply put, because of our decisions the debt of this province is almost $1 billion lower than estimated just last year."
But Dexter warned that this year's surplus does not change the province's financial challenges.
"In this year's budget, the province is forecasting a deficit, almost exactly as laid out in the multi-year Back to Balance plan," he said. "The expected deficit is due largely to the return of clear, accountable annual operating grants for universities."
The province's 2011-12 budget will be tabled Tuesday.
The province has already announced it will trim funding to school boards by $17.6 million or 1.65 per cent, while holding the line on funding for health boards and municipalities.
Nova Scotia's 11 universities would also see a $14 million cut to their operating grants next academic year.