Budget 2012 Continues Strong Fiscal Discipline

NOTE: A social media release with high-res downloadable photos video and audio is available at http://www.gov.ns.ca/news/smr/2012-04-03-Budget-2012

Finance Minister Graham Steele tabled the 2012-13 provincial budget today, April 3. This budget illustrates that the government's fiscal plan is working.

"This budget reflects strong discipline and follows through on the government's commitment to make life better for families in Nova Scotia," said Mr. Steele. "Through good management, we have restored sense to the province's finances. Getting back to balance has not been easy, but now a balanced budget is just one year away."

"We have many reasons to be optimistic about our province's economic future and Budget 2012 supports the game-changing opportunities that lie ahead."

Key initiatives include:

• investing in the jobsHere plan to help businesses be more productive, innovative and competitive
• reducing the small business tax rate for the third year in a row
• providing modest income tax reductions for tens of thousands of Nova Scotians
• supporting low-income Nova Scotians by increasing the Income Assistance Personal Allowance, the Nova Scotia Child Benefit, the Affordable Living Tax Credit, and the Poverty Reduction Credit
• providing Better Care Sooner through investments in Collaborative Emergency Centres, hospitals and treatment options, and mental health and addictions
• helping seniors stay in their homes longer, and
• investing in the new Kids and Learning First plan and increasing the per-student funding to its highest level ever.

The 2012-13 budget projects a deficit of $211.2 million. This is slightly better than the $215.8 million deficit anticipated in the province's four-year fiscal plan.

Revenues for 2012-13, including net income from government business enterprises, are estimated at $9.3 billion, an increase of $391.7 million over the 2011-12 estimates.

Total expenses for fiscal 2012-13 are budgeted at $9.5 billion. Departmental expenses are budgeted at $8.5 billion, up $189.9 million from 2011-12.

The 2012-13 budget will reduce the provincial tax rate for small businesses for the third year in a row. Effective Jan. 1, 2013, the rate of corporate income tax for small businesses will drop to 3.5 per cent from four per cent. The small business tax rate, which was five per cent in 2010, was lowered half a percentage point in both 2011 and 2012. These decreases represent a 30 per cent drop in the small business tax rate. Eligible small businesses can apply this rate on the first $400,000 of taxable income.

This budget also outlines changes to personal income tax, which will return $7.5 million to about 78,000 Nova Scotian taxpayers this year. The dependent amount and spouse amount will increase to $8,481 to match the basic personal amount. Additionally, the disability amount will increase to $7,341. These changes will be in effect for the 2012 tax year.

As reflected in March's 2011-12 forecast update, the province's spending came in below estimate. This is the first time since at least 1967 that this has happened three years in a row. Continued restraint and good fiscal management will result in a $260.8-million deficit for 2011-12, an improvement of $128.8 million from the budget estimate.

Nova Scotia's overall net debt is estimated at $13.3 billion as of March 31, 2012, $457 million less than was estimated in April 2011. The province's debt-to-GDP ratio, a widely used indicator of fiscal health, continues to get better. It now stands at 35.2 per cent.

For more information on the 2012-13 provincial budget, visit www.gov.ns.ca.