Nova Scotia moves from surplus to $853M deficit due to pandemic
The province's net debt has increased to $16.9 billion from $15.7 billion
HALIFAX — After tabling a budget in February forecasting a $55-million surplus, the Nova Scotia government is now looking at a deficit that has ballooned to $853 million.
Finance Minister Karen Casey says the COVID-19 pandemic is to blame for the $908-million reversal in the books for the 2020-21 fiscal year.
Casey says an additional $443 million in appropriations are required for nine departments, with the majority of the expenses related to protecting the public and boosting the economy during the pandemic.
That’s in addition to $228 million announced last month for more than 200 “shovel ready” infrastructure projects to help kick-start the economy.
The previous funding for highway paving, bridge replacements, green energy projects, school repairs and museum upgrades was added to an already record $1-billion capital plan.
Casey says total revenue is projected to be $11.06 billion, down $532.1 million from the budget — mainly due to decreased revenue from HST and corporate income tax, while overall expenses are projected at $12.09 billion — up $470.3 million, mainly due to increased expenses related to the COVID-19 response.
She says the province’s net debt has increased to $16.9 billion from $15.7 billion, although debt-servicing costs have been revised downwards by $21.9 million from the budget, mainly due to reduced interest rates.
“Our strong economy was an advantage entering this pandemic.” Casey said in a news release. “However, we cannot diminish or underestimate the magnitude of what we are facing as a province and as a country.”
She vowed to provide “the fiscal management needed to return the province to a position of economic strength, while continuing to support Nova Scotians.”
The minister said Nova Scotia’s share of the federal Safe Restart program, which is expected to be more than $250 million, and associated expenses would be included in the next forecast update.