Update Shows Challenging Fiscal Situation

Finance and Treasury Board Minister Randy Delorey outlined Nova Scotia's vulnerable fiscal situation and pledged continued spending discipline during government's second 2015-16 forecast update today, Dec. 14.

The deficit is forecasted to be $241.2 million, an increase of $118.6 million from the September forecast update and $143.6 million above the original budget estimate of $97.6 million. Reduced tax revenues and offshore royalties are driving up the deficit.

"This update clearly shows how vulnerable our fiscal position is and how significantly a negative swing in revenues impacts us," said Mr. Delorey. "In areas where we have control, on the spending side, we have made progress. We need to continue to be disciplined if we are to reach a sustainable fiscal position.

"As finance minister, I would love to be able to invest more in areas that matter to Nova Scotians - new and improved schools, state-of-the-art hospitals, better programs for seniors and those in need. Quite frankly, we can't get there if we don't stick to a fiscal plan that matches our programs and services to our ability to pay."

Highlights of the update include:

• total revenues forecast to be $9.8 billion, down $135 million from budget day
• provincial tax revenues forecast down $79.5 million, with reductions in corporate income tax of $44.9 million (down 9.1 per cent), HST, fuel and tobacco taxes
• total expenses forecast to be $10 billion, down $4.3 million
• net departmental expenses are up $4.4 million from estimate (Department of Community Services requires an additional appropriation of $14.4 million because of increased expenses in support programs, Pharmacare and other areas)
• a prior year's adjustment reduces revenue by $86.1 million (increases in personal income tax and HST are offset by a reduction in corporate income tax, offshore royalties and other areas)
• a $98.2 million reduction in prior year royalties from the Sable offshore as estimated costs to wind up the project continue to rise
• forecasted real GDP growth has been revised down to 1.0 per cent from 1.7 per cent for 2015 and the 2016 real GDP growth has been reduced to 0.8 per cent from 1.5 per cent

For more information, see the Department of Finance and Treasury Board website at http://novascotia.ca/finance .