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Nova Scotia Liberals to table first deficit budget in six years because of COVID-19

HALIFAX — Nova Scotia's budget is to be tabled Thursday and will include a plan to bring the province back to fiscal balance within four years, according to a government source.
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HALIFAX — Nova Scotia's budget is to be tabled Thursday and will include a plan to bring the province back to fiscal balance within four years, according to a government source.

The source with knowledge of the budget — the first under new Premier Iain Rankin — said it will "set out a path" for getting back to balanced books after a string of five consecutive budgets with small surpluses.

"This does show discipline, it's not crazy spending and the goal is to do this (balance) over four years … it starts with this budget," the source said.

There will be no tax or fee increases and the budget will contain a "good-sized" investment in health and long-term care, the source said. "That's a big increase from last year and also for mental health as well."

Finance Minister Labi Kousoulis has already said the budget will be in deficit because of spending required to address the ongoing COVID-19 pandemic. Kousoulis was appointed finance minister as part of Rankin's new cabinet, which was sworn in last month.

Kousoulis, however, has said that as a percentage of GDP, Nova Scotia's deficit will be a fraction of what will be seen in most other provinces. 

"We are in good shape going forward," he said following a cabinet meeting last week. 

Before he left office in early February, former premier Stephen McNeil said he believed the deficit for 2020-21 would be in the $500-million range, after being forecasted at $778.8 million in December. Last February, the provincial budget estimated a $55-million surplus for fiscal 2020-21. 

Although Kousoulis didn't reveal the new deficit number, he said he believes it's a bit better than the previous forecast, but he didn't see "any path of getting it down to $500-million." 

Rankin has said that despite a "significant deficit," the budget will provide spending in areas where people need immediate help. 

The premier singled out mental health as an area of health care that would get increased spending. 

"I know last time (budget) it was less than a $1-million increase — it will be substantively more than that," Rankin said. There would also be more spending on long-term care, the premier said, because of "gaps that were exposed" during the pandemic. 

Meanwhile, the Liberal government released its 2021-22 capital budget on Tuesday with $1.17 billion designated for highways, schools and hospital projects.

A total of $467 million will go to road, highway and bridge improvements, with $217.2 million earmarked for the design and construction of 15 schools and for the purchase of the province's four remaining public-private partnership schools.

There is also $178.2 million for the continuing redevelopment of hospitals in Halifax and Sydney, N.S., with another $95.5 million for the construction and repair of other medical facilities and $22.4 million to replace medical equipment, including $6.1 million for new ambulances.

This report by The Canadian Press was first published March, 25, 2021.

Keith Doucette, The Canadian Press

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