Nova Scotia closed the books on fiscal year 2015-16 with a deficit lower than budgeted by almost $87 million.

The public accounts for the last fiscal year were released on Tuesday showing the deficit for the last fiscal year was $10.7 million.

The change from the budget is due mostly to higher than expected revenue from income taxes, net income from government enterprises and other revenue sources.

Net debt up slightly

The net debt crept up slightly to $15.1 billion. The increase results in the per capita net debt topping $16,000 for the first time. Meanwhile, net debt to GDP has dipped back below 38 per cent.

The net debt to total revenue fell three percentage points to 138 per cent.

The increase in personal income tax revenue is a strong departure from a recent fiscal update when the finance minister voiced concern about softening revenues that were well below expected levels.

Department officials say the change stems from improved yields on 2014 income taxes, something that continued in the months leading up to the last budget.

Making progress

Finance Minister Randy Delorey said the numbers show his government is making progress while still being able to make strategic investments.

"With class caps, with math and literacy, with orthopedic wait times and home care. We continue to invest in those areas because those are the priorities of Nova Scotians."

The minister defended the decision to build into the numbers the financial arrangements the government is proposing to all of its unions. While the majority of public sector workers have yet to sign new contracts, the Liberals have said they will not budge from proposed annual increases of zero, zero, one and 1.5 per cent.

Delorey and Finance Department officials said that is a standard calculation based on the best available information at the time.

Petroleum royalties decline

Petroleum royalties for the province continue to decline in the face of low natural gas prices and reduced production at the Sable and Deep Panuke offshore projects.

And the now-defunct and controversial Nova Scotia Jobs Fund continues to cost Nova Scotians money, this year requiring $74.3 million to service previously signed agreements.

The prior year's adjustment, calculated when previously estimated fiscal items are closed with final figures, was a negative of $68 million. This was due mostly to petroleum royalties and lower corporate income tax.

Departmental spending was mostly as predicted, with the biggest decrease being at the Department of Health and Wellness. The department was $31 million under budget, due mostly to delayed construction starts. The biggest increase was at Internal Services, where costs came in $38 million above budget due to accrual for the Boat Harbour remediation project.

Opposition parties voice concerns

NDP Leader Gary Burrill said the price paid to get the deficit lower is too high. That includes no new nursing beds, less money for nursing homes and not enough investments in post-secondary education, he said.

In December during the last fiscal update, the government was predicting a major jump in the deficit. At about the same time it tabled its wage restraint legislation that, if proclaimed, would impose contracts on the province's public sector workers.

Given what we know now about the province's finances, Burrill said the shift in numbers has him skeptical.

"I am inclined always now to question the integrity of anything that comes from the present government. It seems to me one of their greatest shortcomings is the basic truthfulness of their word."

'Inching forward a little bit'

Tory finance critic Tim Houston said one of his big concerns is there isn't enough progress on getting more people into the workforce. The decrease in corporate income tax causes makes him wonder if companies are growing and wanting to come here.

"It's kind of like the province is in a race to move forward and that their feet are tied together. And maybe we're inching forward a little bit, but the potential of this province is not anywhere near being recognized."

Houston said the personal income tax numbers may be up, but it's not because more people are working and more people are earning more money.

"If you tell me that less people are working and tax revenues are going up, that's not a good thing."