Financial risks high for Nova Scotia: Auditor General

HALIFAX – Nova Scotia’s auditor general says the cost of benefits for retirees in the public sector is a growing risk to provincial finances.

Michael Pickup said health benefits, allowances and accumulated sick leave for retirees totalled $1.8 billion as of March 31st, 2014 – an increase of 81 million dollars from 2013.

Union and non-union civil servants, along with workers in the health and education sectors, account for 88 per cent of the total liability.

Pickup warns the liability is unfunded, which means the government will have to pay for the plans through future taxes and other revenue.

The report comes as the government faces contract negotiations with a number of public-sector unions, including teachers.

Finance Minister Diana Whalen said there is nothing the province can do about benefits that have been previously won through contract negotiations. However, she said negotiations on future contracts will have to examine all aspects of public-sector pay and benefits.

Future programs and services at risk: Auditor General

The report released Wednesday also raises concerns about the province’s growing net debt, which now sits at $15 billion.

Pickup said the province’s per capita net debt has seen its largest annual increase in the last five years. Pickup says the net debt boiled down to $15,659 for each Nova Scotian in 2013-14, a six per cent increase from the year before.