Province closes 2016-2017 fiscal year with $150M surplus
The provincial government officially closed the books on the last fiscal year Thursday with a surplus almost $110 million higher than they had indicated in April's spring budget.
The 2016-17 public accounts showed a $150-million surplus. That's also higher than the forecast in last year's budget, which predicted a surplus of $127 million.
Both the consolidated revenues and expenses were slightly up from what was budgeted, coming in at $11.23 billion and $11.08 billion, respectively.
The net debt decreased by $120 million and now stands at $14.9 billion. The debt-to-GDP ratio now sits at 36.4 per cent, a 1.1-percentage-point improvement.
Coincidental timing helps Liberals
The government's surplus is also above and beyond its major pre-election spending spree this spring.
Finance Minister Karen Casey said the improved financial picture started to become evident last winter. She said it was "coincidental" that the election call and the end of the fiscal year came together at the same time.
"As you get closer to the end of the fiscal year, you have a better idea of how much you can invest, what spending you can partake in," she said.
Final appropriation numbers for 2016-17 total $234 million, including a $10.5-million bailout recently approved for Acadia University.
Lower health spending
Major savings included lower-than-expected departmental spending. For instance, the Health and Wellness Department came in $27.6 million under budget while restructuring costs were down $133 million.
Government documents tabled Thursday attributed the dip in health spending mainly to delayed projects and lower capital grants. The restructuring fund, which is generally used to address labour costs, was down "due to lower-than-anticipated budget requirements for corporate initiatives."
The McNeil government has yet to reach contract agreements with health-care workers and civil servants, two of the three largest unions in the province. Finance department officials said the savings in the restructuring fund have nothing to do with ongoing labour negotiations, but would not say what they do relate to.
Approach on contracts won't change
Casey said the juxtaposition of an increasing surplus and government talking points about fiscal prudence and holding the line on public sector wages is not a contradiction.
"What our government was doing was saying, 'We have to live within our means.' Too many times for too many years, governments have lived beyond their means and racked up a debt to leave to our future generations."
Casey said the Liberals' approach to contract negotiations will not change simply because the surplus has increased. She said projections for future surpluses aren't as big as this most recent one, although past final numbers have also outperformed projections.
A surplus at the public's expense
Tory finance critic Tim Houston said the government's improved surplus comes at a time when people can't get the health-care services they need and roads around the province are crumbling.
He also pointed to worrying revenue figures.
"We see our tax base is shrinking [and] our tax yield is increasing. So they're squeezing more tax dollars out of those of us that are fortunate enough to have a job here."
NDP Leader Gary Burrill said a large surplus isn't worth much when thousands of people are without doctors or can't access mental-health services.
"It's a false economy," he said. "It's no time for the government to say, 'Yeah for us, we've put more money in the bank.'"
He noted that the increase for household incomes and wages are at the lowest increase level since 2012. It's time to invest and stimulate the economy, he said, not be obsessed with building surpluses.
