Nova Scotia’s Liberal government says it’s still expecting to reap the savings from contract offers that two unions recently rejected.
Thursday’s fiscal update shows the government has a surplus of $12.1 million. That’s down $5 million from the surplus estimated in the April budget.
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Finance Minister Randy Delorey gave the second budget forecast for 2016-17 just one day after the Nova Scotia Government and General Employees Union (NSGEU) rejected a contract offer by 94 per cent.
Despite both the NSGEU and the Nova Scotia Teachers Union (NSTU) rejecting their offers, the government’s surplus is based on both compensation packages being accepted. The rejected offers would have saved the government money on the long service award.
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Both contracts would have frozen wages for two years, then have wages increased by three per cent over the final two years. It would also have frozen the long-service award retroactive to 2015. The latter change is saving the government a considerable amount of money.
While the unions haven’t agreed to freezing the long service award, the government has already budgeted for the expected savings in the 2015-16 and 2016-17 budgets. It removed a $40 million liability from its books in each of the last two budgets.
On Thursday Delorey told reporters that despite the unions rejected the offers, the government is still confident in its numbers.
“We’ll have to see where negotiations go, but our fiscal plan will be respected,” Delorey said.
When asked if that means the government will legislate contracts on unions, Delorey said the government would “wait and see.”
NSGEU President Jason MacLean said Thursday the plan the government has put forward is “unrealistic to Nova Scotians.” He also said freezing the long service award is a deal breaker for his members.
“We’re not looking for anything, they are looking to take things from people. Who here in Nova Scotia wants to go tomorrow with things taken from them from their employer?” he asked.
READ MORE: Nova Scotia government, teachers union to return to contract talks
Nova Scotia posted a razor-thin surplus of $17.1 million in its 2016-17 budget tabled last April and projected a slightly increased surplus of $18.9 million in September.
The government is attributing the hit to a projected revenue decrease of $118.4 million in revenue to $10.2 billion. Most of that — 72.9 million — is due to delays in the construction of the controversial new Nova Centre convention centre.
The rest — $45.5 million — can be blamed on lower revenues from personal income tax, motive fuel tax and HST.
The financial forecast also accounts for the estimated 17.5 million the government expects to spend helping Cape Breton recover from extensive flood damage the region sustained during the Thanksgiving Day storm.
Budget surplus a ‘house of cards’: Progressive Conservatives
The Progressive Conservatives say the surplus is based on the government ignoring “high” risk factors.
Calling it a “house of cards,” Tory finance critic Tim Houston said the unratified contracts are a “risk” for the province. He also said the declining labour force and employment rates are “a real problem” for the province as it tries to increase the cash it brings in.
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NDP Leader Gary Burrill says the Liberal’s fiscal update shows they will “pay any price in order to avoid being in a deficit.” He’s calling on the government to repeal Bill 148 which would impose a compensation package on the public sector. It has passed through the legislature but has not been proclaimed.
— With files from The Canadian Press.
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