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HALIFAX \u2014 With revenues down and spending up due to a slowing economy, Nova Scotia is forecasting a record deficit of $1.2 billion for the current fiscal year.<\/p>\n
The figure released by Finance Minister John Lohr is significantly higher than the $697.5-million deficit projected in February\u2019s budget.<\/p>\n
Lohr said provincial revenues have dropped $44.9 million due, in part, to decreases in population growth and consumer spending.<\/p>\n
But he stopped short of saying whether the government would need to tighten spending.<\/p>\n
\u201cIt is concerning, but we know that we were elected in 2021 to fix health care and we see largely these costs being in the health care sector\u2026we are committed to meeting the needs of Nova Scotians. In terms of how this affects future budgets, I can\u2019t predict that right now,\u201d the minister said.<\/p>\n
Officials said the province\u2019s real GDP growth rate is projected at 1.4 per cent, which is down from the two per cent forecast in the budget. Flat population growth of 0.9 per cent has also affected labour force and employment numbers, while global trade shocks due to tariffs, especially Chinese tariffs on seafood, has affected the growth of exports.<\/p>\n
Despite that, officials said the government still had not used a $200 million reserve fund that was included in the budget to assist if provincial revenues fall due to tariffs.\u00a0<\/p>\n
Government spending, meanwhile, is up by $503 million more than forecast, primarily in the health sector, which accounted for $410.9 million more in spending, mainly due to increased staffing and inflationary costs.<\/p>\n
Health spending now accounts for 46 per cent of the overall budget at $8.3 billion this year, finance department officials said.<\/p>\n
Lohr was asked whether that kind of spending on health care is sustainable.<\/p>\n
\u201cI think that if you look across the nation that would be very close to a typical number,\u201d Lohr said.<\/p>\n
He added that the government is making investments that he believes will pay off in the future.<\/p>\n
NDP Leader Claudia Chender noted that the government in recent years has projected deficits only to end up with small surpluses.<\/p>\n
\u201cThis government has become masters of what I can only call creative accounting, we never know if a projection is going to swing wildly in one direction or another,\u201d said Chender. \u201cBut the bottom line is we have the most spending in history and we don\u2019t have a lot to show for it.\u201d<\/p>\n
Interim Liberal Leader Derek Mombourquette said having a deficit of over $1 billion is significant for a province of just over one million people.<\/p>\n
\u201cThey need to start looking at ways that they can actually grow the economy \u2026 this is generational debt that we are taking on,\u201d he said.<\/p>\n
Officials noted the net debt as of March 31, was $20.84 billion, which is $1.7 billion higher than the previous fiscal year. That was mainly due to an accounting change that saw $879.9 million in government loans for long-term care being recognized as tangible capital assets on the books.\u00a0<\/p>\n
Meanwhile, Lohr said the province ended the last fiscal year with a surplus of $264.8 million, up from a projected deficit of $467.4 million.<\/p>\n
\u00a92025 The Canadian Press<\/strong><\/p>\n<\/p><\/div>\n