Nova Scotia

Province squirrelling away $150M more for big-ticket projects

The McNeil government is signalling that two projects it has promised to fund — the Boat Harbour cleanup and bringing high-speed internet to communities without it now — are likely to be much more expensive than first anticipated.

Anticipated cost to clean up Boat Harbour balloons from $133M to $217M

Nova Scotia Finance Minister Karen Casey. (Andrew Vaughan/Canadian Press)

The McNeil government is closing the books on the 2017-18 year with a $230 million surplus, while also setting aside an additional $150 million to fulfil two high-profile political promises — cleaning up Boat Harbour and connecting rural communities to high-speed internet.

It's able to do that thanks to one-time adjustments coming from Ottawa linked to offshore petroleum royalties and a related arbitration case, higher-than-expected personal income tax revenue, and a tax credit the province learned it did not need to repay to the federal government.

All told, the unexpected windfall means $230.1 million more in revenue than the province anticipated just three months ago. Finance Minister Karen Casey's government is taking credit for the larger-than-expected surplus.

"We worked hard to get the province's finances on a sustainable path," she told reporters Thursday during a news conference to release the public accounts for the fiscal year ended March 31, 2018.

The province has pledged to close the Boat Harbour treatment site by 2020. (Steve Lawrence/CBC)

The documents show the province set aside $82 million more last year for the cleanup of Boat Harbour, which is now forecast to cost $217 million.

The 140-hectare waste-water lagoon in Pictou County has for 50 years been used to treat effluent from Northern Pulp. The province has pledged to close the government-owned site by January 2020.

The estimated cost of cleaning up Nova Scotia's largest environmental contamination site has risen steadily since the project was first announced, from $52 million in 2015 to $88 million in 2016 to $133 million a year ago.

According to a government official, the latest $217 million estimate comes from the engineering firm GHD, which surveyed the site and submitted a report to government in May.

Nova Scotia has spent $12 million on preliminary work, leaving $205 million in the fund.

Asked if there was enough money set aside to cover the actual cost of restoring Boat Harbour to its previous state as a tidal estuary, Casey responded: "One of the things we need to make sure is we have capacity if there's a greater need."

"We'll make sure there's capacity," she said. "It's a commitment that we made."

Making sure all households in Nova Scotia are connected to high-speed internet could cost up to $500 million. (Tim Wimborne/Reuters)

Nova Scotia taxpayers are also chipping in more to bring high-speed internet to areas of the province still without it. In the spring budget, the McNeil government promised $120 million to pay for the project. The money will be placed in a trust managed outside government.

Taxpayers are adding another $73 million to that amount, bringing the total public contribution to $193 million. 

A consulting firm hired by the province to evaluate the situation and recommend a course of action said connecting under-served households to fast, reliable internet service provincewide could total up to $500 million.

Casey acknowledged the money currently set aside by the province wouldn't be enough.

"I would expect the delivery of high-speed internet to all parts of the province, the cost of that will continue to grow," she said. "It will grow again based on the need as the providers get out there looking at what's needed."

But unlike the money for the Boat Harbour project, the government is not committing to contribute whatever is needed to get the job done. 

"There's no anticipation of future contribution," said Geoff Gatien, the associate deputy minister of finance. "While there may be more money needed, it may not be provincial money."

The Nova Scotia government expects private companies or other groups to come to the table with funds to hook up as many homes as is feasible or practical.