Nova Scotia’s budget, released yesterday, projects a $506 million deficit, a stark contrast from the $108 million surplus for 2021/2022. Revenue falls due to a large prior year adjustment for taxes in 2021/2022. Expenses are up for over half of provincial departments with health care spending a top priority.
Over the next four years deficits amounting to $1.6 billion are forecast, with the net-debt-to-GDP ratio reaching a two-decade high. The budget is missing a plan to reign in debt accumulation and return to balance. A plan to ensure fiscal sustainability is critical given long-term fiscal pressures facing the province. Spending has outpaced own-source revenue growth over the last five years.