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‘Nobody wins’: Financial forecast shows increasing deficit, overspending by 8 departments

HALIFAX – The forecast keeps getting worse, with larger deficits and dropping revenues coming our way, according the province’s financial update.

In the forecast update released by finance minister Randy Delorey on Monday, the province said the deficit will increase by $143 million from the original budget estimates , putting the forecast for the provincial deficit at more than $240 million. A drastic change since the September financial update when the deficit was predicted to be $122.5 million for 2015-2016.

“This update clearly shows how vulnerable our fiscal position is and how significantly a negative swing in revenues impacts us,” Delorey said.

READ MORE: Province recognizes “continuing economic uncertainty” in budget update

The September update saw another large jump in the deficit, with it growing $25 million over the spring forecast.

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Eight departments overspent on their original budgets this year, the biggest overture being that of the Community Services department, which exceeded their budget by more than $14 million.

Forecast Update, December 14, 2015.
Forecast Update, December 14, 2015. Province of Nova Scotia

Revenue losses

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The update also states that revenue is growing slower and provincial tax revenues are expected to decline by almost $80 million from the budget estimates. Revenue from offshore oil and gas royalties are also down.

READ MORE: Speculation and concern brewing around pending provincial budget

Forecast Update, December 14, 2015.
Forecast Update, December 14, 2015. Province of Nova Scotia

The report says that total revenue is forecast to be $9.8 billion, which is $135 million less than predicted in the 2015-2016 budget.

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Personal income taxes are down $18 million and corporate income taxes are down nearly $45 million.

Fiscal plan failing

The Nova Scotia Progressive Conservative Party puts the blame for the dim economic outlook squarely on the shoulders of the government.

In a news release Monday, opposition leader Jamie Baillie said this forecast update “proves the [Stephen] McNeil government’s fiscal plan is failing.”

“People need work, and families need stable incomes. They need to see the promise of job-creating conditions in Nova Scotia. Instead, this government has shut the door on new jobs and investment,” the release said.

The release also points out that GDP growth for next year has been cut in half because of declining corporate income tax projections and fewer people having work and spending money in the province.

“Stephen McNeil’s attempt to cut his way out of this financial hole, with no plan for job creation highlights the main problem with this Liberal government. It’s more than fiscal incompetence,” Baillie said.

“While Nova Scotians are struggling to pay the bills or moving away, the Liberals are drowning in red ink and random cuts. Nobody wins.”

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