HALIFAX – Nova Scotia’s NDP government is forecasting a surplus of $18.3 million for this fiscal year in an updated economic forecast released Monday that could be one of the final pieces in the puzzle before an election is called.
The thin surplus for 2013-14 is $1.9 million more than the government predicted when it delivered a $9.5-billion budget in April.
Economic Development Minister Graham Steele, who is filling in this month as finance minister, said while revenues went down by $9.6 million, expenses decreased by $11.5 million.
For the entire fiscal year, he said the government is forecasting a $9.1 million drop in departmental spending than was shown in April’s budget. There is also a projected $14.5 million increase in revenues from personal income tax for 2013-14.
“Some budget lines are up and some budget lines are down,” said Steele. “But overall, there are no big changes, which accounts for why our balanced budget remains solid.”
The latest projection covers departmental spending from the beginning of April until July 21 and is based on economic growth forecasts that were done in early June.
The government has said it would release a fiscal update before calling an election. The Opposition Liberals called for a new forecast before a Sept. 30 deadline, saying if an election is called, voters should know the state of the province’s finances.
Steele said releasing the update weeks ahead of the deadline in September is not unusual, adding that it was released in early August by the previous Conservative government in 2007.
“This is the earliest our government has done it,” said Steele, who has temporarily taken over for MacDonald because she has shingles. “I don’t think there’s anything particularly unusual about this date and I don’t think anything special should be read into it.”
The government’s bottom line was sweetened by the transfer of more than $12 million in local fundraising for the new Queen’s County hospital project when ownership of it was transferred to the province in August 2012. Steele called it “a bit of an oddball case,” but added it was done to avoid the costly delays the government inherited with the Colchester Regional Hospital in 2009.
Liberal Leader Stephen McNeil cast doubt on the government’s new set of numbers and used a $30-million payment to universities for this fiscal year that was included in last year’s budget to argue that the books are actually in the red by $12 million.
He also questioned whether the government can realistically expect to get more money from personal income taxes.
“This government says it’s going to collect more in personal income tax yet there are fewer Nova Scotians working, and HST revenues are supposed to be increased yet retail sales are decreasing,” said McNeil.
Progressive Conservative Leader Jamie Baillie also disputed the government’s claim of a balanced budget.
“An update on a fantasy is still a fantasy,” said Baillie, calling the money from the hospital fundraising effort “another $12 million paper shuffle that only adds to the evidence that (the budget’s) not balanced.”
The NDP is in its fifth year of its mandate but does not have to call an election until next year. The party won a majority government in June 2009, becoming the first NDP government in Atlantic Canada.