N.S. to end fiscal year with big deficit: finance minister
The Nova Scotia government will end the current fiscal year with a deficit of $590 million, Finance Minister Graham Steele said Monday.
He broke the bad news at a Halifax Chamber of Commerce luncheon, telling the business crowd that it’s too late to make changes to try to balance the books for 2009-10 because departments are already halfway into their spending year. The fiscal year goes to the end of March 2010.
The government is reviewing expenses, Steele said, and has not given up on balancing the 2010-11 budget.
Earlier this year, the former Tory government of Rodney MacDonald had predicted a small surplus.
Finance Minister Jamie Muir tabled the 2009-10 budget on May 4, calling it the province's eighth consecutive balanced budget, and forecasted a $4-million surplus. At the time, NDP Leader Darrell Dexter said this was really a deficit budget and the Tories should simply admit to overspending.
"They need to bring forward an honest statement of the financial position of the province to the people. They deserve no less," Dexter had said.
Last Friday, Steele wouldn't say if the 2008-09 budget was balanced.
"If you go on generally accepted accounting principles, there's a surplus. If you go to the different definition that's contained in the Provincial Finance Act, it isn't," he said.
Under the act, brought in under John Hamm, all offshore revenues must go to pay down the debt. However, under generally accepted accounting principles, the money can be used for day-to-day expenses.
The Tory minority government was defeated last spring after it lost a vote on a key government bill that would have allowed the MacDonald government to spend $260 million that was earmarked to pay down the province's debt.
It was replaced in the June election by the NDP, which soundly defeated the Progressive Conservatives, who fell to third place.
In August, Steele said an audit of provincial finances found that spending has been rising while revenue is flat or declining because of the recession and reduced offshore and equalization payments.
He said if the province continued on the path set by the previous Progressive Conservative government, the annual deficit would be $1.3 billion and the debt $16.7 billion by 2012-13.
Steele said Friday that the province’s net direct debt is $12.3 billion, up $208 million from that projected by the previous Tory government.