Nova Scotia tables budget with surplus, new spending, tobacco tax hike

Surplus figure is an improvement on the $241.2 million deficit forecast in December

HALIFAX — As governments in Atlantic Canada and elsewhere table austere cost-cutting budgets, Nova Scotia bucked the trend Tuesday tabling a 2016-17 budget with a razor-thin surplus of $17.1 million.

The province’s Liberal government was largely able to do so by holding the line on departmental spending while reaping the benefit of a $234 million increase in tax revenues largely through personal income taxes. That’s a 2.6 per cent jump over last year.

The new surplus figure is an improvement on the $241.2 million deficit forecast in December, in a budget with $10.1 billion in spending.

Finance Minister Randy Delorey highlighted the budgetary good fortune, but cautioned things could change quickly because the province is “not immune” to global economic slowdowns and shocks.

“We know economic ups and downs will continue,” said Delorey.

“We also know we are not powerless. We can grow our surplus so we can become a source of stability in this region.”

The budget promises include modest amounts for a series of spending initiatives, many of which were previously announced, while continuing promised multi-year spending in education.

There is $6.6 million to improve a childcare system which a report released last month said employs the lowest paid early childhood educators in Canada. The government says the money will be used to improve wages and subsidies to parents, although the amount of the increases won’t be released until Education Minister Karen Casey gives her official response to her department’s report within the next week.

Another $7.5 million will go towards increasing income assistance by $20 a month beginning May 1 for up to 25,000 people who are eligible.

Other spending measures include $3.6 million to help children with autism access specialized therapy and a 25 per cent refundable food bank tax credit for farmers that will cost $300,000.

Education will get $21 million as part of a four-year $65 million government pledge. The money includes $6.4 million to cap class sizes up to Grade 6 and $7.5 million to help improve literacy and math skills.

The only tax increase in the entire budget hits smokers, with cigarettes going up two cents each or 50 cents a pack and the tax rate on cigars going up by four per cent at midnight. The moves are expected to bring $15.8 million to provincial coffers.

Health spending at $4.1 billion takes up 40 per cent of the overall budget. It includes $14.4 million for home care including home support and nursing.

As previously announced there is $3.7 million toward the redesign of the decrepit Victoria General Hospital in Halifax, but no money to replace it.

However, in an accounting measure the government said it was taking a one-time $110 million payment from Ottawa and the Halifax Regional Municipality for the city’s new convention centre and applying it to the debt.

Officials said the payment on the debt would free up money in the future to launch a multi-year redevelopment of the Queen Elizabeth II Health Sciences Centre.