The second forecast update for the 2013-14 budget shows Nova Scotia is projecting a deficit of $481.7 million, with softening revenues and a large one-time expense.
Finance and Treasury Board Minister Diana Whalen issued the update today, Dec. 19.
"While our province is facing real fiscal challenges, this not a surprise, nor is it unique to Nova Scotia," said Ms. Whalen.
"We expressed doubts about the state of the province's finances. It's why we kept our commitments realistic and it's why we will keep them.
"Today's update is the start of a frank, honest and transparent discussion about the provinces finances."
The largest contributor to the deficit is a one-time pension valuation adjustment required by an auditor general decision on the treatment of pension liabilities. Revenues are also lower than expected and include a significant negative prior years' adjustment.
Highlights of the update include:
-- Total revenues, including net income from government business enterprises, are forecast to be $9.3 billion, down $157.8 million from budget
-- Prior years' adjustments from provincial revenues sources are forecast to be a negative $124.8 million
-- Total expenses are forecast to be $9.9 billion, up $328.5 million from budget. The auditor general's Nov. 29 decision on accounting for the pension liability had a $280.3-million impact
-- While, departmental spending is forecast to be $85.6 million higher than budget, $36.4 million of that is offset by of this is money the province receives or recovers from other levels of government
-- Gross debt-servicing costs are forecast to be $34.1 million lower than budget, primarily from the pension valuation adjustment
-- Six additional appropriations, totaling $360.6 million, were needed, including the pension valuation adjustment,and departmental costs: primarily at Community Services and Health and Wellness, as well as funds for the Yarmouth Ferry
The forecast update includes revisions to economic assumptions. Since the budget release in April, there have been economic news and events that have altered the outlook. The real economic growth rate for Nova Scotia has been revised to of 0.7 per cent in 2013, down from the budget forecast of 1.3 per cent.
"Our plan forward will include specific measures to help Nova Scotia's small- and medium-sized businesses compete, renewed support for education, and a firm commitment to control government spending," said Ms. Whalen.
Forecast update materials are available at www.novascotia.ca/finance .