Canadian Manufacturing

Nova Scotia to continue ‘tough budget’ trend sweeping Canada

The province's premier warned that difficult decisions are ahead and the public would have to share in the debt-reduction pain

HALIFAX—Nova Scotia Premier Stephen McNeil says the April 9 budget will be a tough one that signals his government is serious about balancing the province’s books during this mandate.

McNeil has cautioned for months that difficult decisions are ahead and the public would have to share in the pain as the province tries to bring down its deficit, which was last projected to be $220.6 million.

He repeated those warnings on Wednesday.

“There are challenges facing this province and all Nova Scotians are going to have to participate in helping the province get back to fiscal health,” said McNeil.

The budget will reshape government services and the way they are delivered to the public, he said, adding that such changes need to happen in order to ensure core services such as health care and education remain at levels the public expects.

He did not reveal any specifics Wednesday, but the government has already announced some steps and dropped strong hints on the areas the budget will address.

Finance Minister Diana Whalen has ruled out a spending freeze, saying the budget would instead include “first steps” in adopting recommendations from a report on the province’s tax system.

She’s been largely non-committal on one of the tax review’s major recommendations _ a carbon tax _ but has said the province needs to find new sources of revenue because of a shrinking workforce and aging population.

One of those sources was the recent announcement of a three per cent hike to 1,400 user fees that the government says will generate $7.7 million in 2015-16.

Whalen has also said a number of tax exemptions and credits that cost the government $350 million a year are under review, including an incentive for the province’s film industry.

That move in particular sparked a backlash from the industry, which on Wednesday presented Whalen with a petition in support of keeping an annual $24-million tax credit.

James Sawler, an associate professor of economics at Mount Saint Vincent University, said he believes the government should be wary of deep spending cuts.

“If we are going to have substantial cuts to government, then that’s going to take a direct hit on our economy,” he said.

Sawler said he doesn’t believe the province’s fiscal house is “all that out of order,” pointing to low interest rates which in turn mean debt servicing costs are relatively low.

He believes there should be investments in areas that will have a long-term impact on economic growth, such as infrastructure and early childhood education.

Opposition Progressive Conservative Leader Jamie Baillie said he wants to see a plan to improve the economy and create jobs.

“The government is speculating about carbon taxes and health premiums and small business increases and I don’t want to see any of that. But I do hope they get their own spending in line.”

NDP Leader Maureen MacDonald said the budget would be a big test of the government’s resolve and priorities.

“This is a premier that talks tough,” MacDonald said. “We’ll get to see whether it’s a tough budget or just a sheep in wolf’s clothing.”

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