Even with increased spending, N.S. projects smaller deficit in 2021-22

·3 min read
Allan MacMaster is Nova Scotia's finance minister. (CBC - image credit)
Allan MacMaster is Nova Scotia's finance minister. (CBC - image credit)

Nova Scotia Finance Minister Allan MacMaster says his government will not wait for the spring budget before making its mark on the province's finances.

MacMaster released the forecast update for the 2021-22 budget on Wednesday. Among other things, it shows the projected deficit has shrunk from $585 million to $445 million since the budget was tabled last March.

Finance Department officials say that improvement is due to several factors, including more money from Ottawa and higher compensation for employees. The latter resulted in more personal taxes paid to the province.

Spending has also increased by $397.1 million since the budget was released, with $124.3 million of that related to COVID-19 expenses. But the spending also includes $103.6 million in funding announcements made by the Tories since they formed government last month.

Along with announcements already made related to virtual health care, more money for municipalities and gravel road maintenance, MacMaster made official $32 million for a new seniors care grant. Although details of the program will be released at a later date, Premier Tim Houston said during the election campaign the money will help seniors stay in their homes longer by covering minor expenses such as snow shoveling and small repairs.

Affordable childcare agreement progressing

The new spending also includes about $53 million in the Education Department related to the initial rollout of the new affordable childcare agreement Nova Scotia signed in July with Ottawa. Included in that money is the one-time $500 grants being paid to all eligible early childhood educators.

The Tories committed during the election to deficit spending to improve the health-care system. While the promise during the campaign was to run a deficit of about $1 billion in their first budget, MacMaster said the government would still be prudent with their fiscal decisions.

But the health-care spending, which is expected to run into the hundreds of millions of dollars, won't wait for the spring budget to be delivered, the minister told reporters during a news conference in Halifax.

"If there are things that we can do now, we will do them if they make sense to do," he said.

"There is no point in waiting. We've been elected to implement change and to fix the health-care system."

Anjuli Patil/CBC
Anjuli Patil/CBC

Finance Department officials also provided more details about efforts to remove the tolls from the Cobequid Pass.

In her mandate letter, Public Works Minister Kim Masland is instructed to get the tolls off for all vehicles as soon as possible.

As part of that effort, bond holders were provided with the required 30-days notice on Monday of the government's intention to pay off the bond early. There will be a payment of $5.5 million required to cover interest payments that would have run through March 31, 2026, and there is also $25 million remaining on the bond.

Although details remain to be settled, government officials said Wednesday that they expect those bills to be paid from the coffers of the Highway 104 Western Alignment Corporation. The corporation's remaining money will likely go toward road maintenance, but that's one of the topics still being discussed.

More help for housing?

In a news release, NDP finance critic Lisa Lachance said she was disappointed the update didn't include more funding related to housing or climate change.

New spending on housing comes in at about $24 million, and is related mostly to the recommendations from the Nova Scotia Affordable Housing Commission. The previous government had already committed to implementing those recommdendations.

There was no additional spending related to climate change, although the Tories are working on new legislation on the issue expected to come during the fall sitting of the legislature.

"Nova Scotians expect to see action from the [Progressive] Conservatives on these two pressing issues," Lachance said in the release.

"COVID-19 has had an unprecedented impact on the province's finances. Addressing the housing and climate crises must be a part of our recovery plan moving forward."

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