Nova Scotia posts a $351M surplus in 2021-22 budget, much higher than anticipated
$585M deficit was initially projected last spring
Thanks to a stronger than anticipated economy and a one-time adjustment from previous budget figures, Nova Scotia has a sizeable budget surplus, rather than a deep deficit.
At a briefing with reporters on Friday, Finance Minister Allan MacMaster announced his department would be closing the books on the 2021-22 fiscal year with a $351-million surplus. It's a far cry from the $585-million deficit estimated when the previous Liberal government introduced that fiscal plan in March 2021. It's also better than the $108-million surplus forecast last December.
MacMaster told reporters the change reflected "our province's stronger than anticipated economic recovery in 2021, coming out of the COVID 19 pandemic."
"Nova Scotia had a smaller economic contraction in 2020 and stronger growth in 2021 than most other provinces," he said.
The figures also show revenues were up a total of $1.3 billion from the original budget estimates "mainly due to improvements in tax revenues, offshore licence forfeitures, investment income, as well as federal recoveries and other federal transfers."
In fact, the province was able to post a "prior year's adjustment" of $389 million. That's a reconciliation of a host of figures, including tax collection between what was forecast and money actually collected. Prior year's adjustments are hard to predict and can vary wildly from year to year.
Surplus a surprise, minister says
MacMaster said there was no way his department could have predicted this year's adjustment windfall.
"I suppose we could say, based on our experience last year, maybe we're going to have more revenues this coming year than we're predicting, but until we actually have evidence to show us that, we prefer to use the evidence because to do otherwise we might as well get a crystal ball," he said.
But NDP finance critic Lisa Lachance isn't buying the minister's claim he only found out about the change a few weeks ago.
The MLA for Halifax Citadel-Sable Island called the last budget "a lost opportunity."
"Nova Scotians are struggling," Lachance told reporters after the briefing. "They're working harder than they've ever worked before.
"It's clear that the government had the flexibility to provide support, to do some things that might make a real difference in the lives of Nova Scotians, and they didn't, and they continue to choose not to."
Liberal finance critic Fred Tilley offered a similar view.
"Certainly the government knew they had a surplus — granted they may not have known exactly how big — they knew there was going to be a surplus," said the MLA for Northside Westmount from his office in North Sydney.
"They should have helped Nova Scotians to get through this cost-of-living crisis that we're in today."
Asked why the Houston government didn't do more to help individuals and families struggling with higher costs given the size of the surplus, MacMaster responded with a rhetorical question.
"Would we have spent more if we had it?" he said." It's really a question — we didn't have the money at the time, we didn't think we had it.
"So we're not going to make decisions if we don't have the information, good information to make them. And yes, we're reporting a bigger surplus today, but we didn't know that in the spring."
Along with revenues higher than budgeted, the province also saw higher-than-budgeted expenses.
Total expenses were $386.3 million over estimates, an increase driven largely by additional spending by the Health Department and Seniors and Long-Term Care Department related to the COVID-19 pandemic, more Advanced Education Department funding for university infrastructure and increased transfers to municipalities.