N.S. Liberals’ first budget since election forecasts $279M deficit

HALIFAX – The Nova Scotia government has delivered a $9.6-billion budget that forecasts a deficit of $279 million in 2014-15.

The Liberals had warned that the budget, their first since winning power in October, would be in the red.

Although revenues are up slightly at $9.9 billion, mainly due to a bump in personal income tax, overall departmental spending has increased by $455 million resulting in the deficit.

The government is increasing spending for health by $194.1 million, with $32.6 million to support home care services and another $10.6 million for programs aimed at recruiting and hiring doctors in rural areas of the province.

The new budget will also remove the efficiency tax from Nova Scotia Power electricity bills as of Jan. 1, 2015.

In education, the government will spend $18.6 million this year, including $7.2 million toward capping class sizes from Primary to Grade 2.

Another $3.5 million has been set aside for early literacy initiatives including the re-introduction of a reading program.

Less than a week after eliminating interest on the provincial portion of student loans, the government is killing a graduate retention rebate that gave grads a maximum annual tax credit of $2,500, saving an estimated $49.5 million.

Nova Scotia Progressive Conservative leader Jamie Baillie said the new budget did not meet his expectations.

“They chose instead to spend more and more — a record amount of spending. That’s why there’s a deficit. That’s why there’s no tax relief.”

Acting Nova Scotia NDP leader Maureen MacDonald was also critical of the document and what she said were troubling tactics put into play.

“The minister of finance has made it crystal clear that austerity for public sector workers is going to be a significant piece of what this government is going to do in the coming years in other budgets,” she said.

“Whether that means a wage freeze or wage rollbacks, we don’t know yet. But it’s clear to me that these are the things this government is ultimately contemplating.”

Nova Scotia budget highlights

• Deficit of $279 million in a spending plan of $9.9 billion.
• Revenue of $9.6 billion due to a bump in personal income tax collection, but that’s offset by $9.9 billion in total expenditures, about $80 million of which is new spending.
• Health expenditures to reach $4.1 billion or 46.4 per cent of total spending, while spending on education will be $1.2 billion or 13.8 per cent of budget expenditures.
• Province to eliminate the Graduate Retention Rebate, saving $49.5 million while holding all other fees, tax credits and rebates steady.
• No new tax measures while maintaining the Harmonized Sales Tax at 15 per cent.
• $7.2 million to cap classroom sizes from Primary to Grade 2 at 20 students from the current 25.
• $32.6 million on home care support and a further $10.6 million to recruit and train doctors in rural and remote areas.

*with files from Global News reporters Mayya Assouad and Brett Ruskin

BELOW: Read the highlights of the 2014 Nova Scotia provincial budget

BELOW: Read the budget address

BELOW: Read the budget assumptions and schedules document