N.S. closes financial books on 2019-20 with slight surplus

COVID-19 started battering the budget books in Nova Scotia last March, but not enough to wash away the surplus.

Nova Scotia officially closed the books on 2019-20 on Thursday, posting a $2.3-million surplus. That's down by $31.3 million from last year's budget estimate and down almost $39 million from the last fiscal update for the year.

"Our province was strong coming into this pandemic, and we will continue to focus on the health and well-being of Nova Scotians and we will continue to apply the same principles of good fiscal management as we move through the recover phase in the months ahead," said Finance Minister Karen Casey.

Revenues were up $454.1 million from the original budget. That is due mainly to increased tax revenues and federal transfer payments.

Expenses increased by $485.5 million, largely due to $120 million in COVID-19 relief spending.

Finance Department officials announced Thursday that Dalhousie University will receive an addition $50 million for a support fund it is managing, bringing the total size of the fund to $100 million.

Nearly $200M in additional department spending

In total, there was a final $198.9 million in additional department spending. Along with the money for Dalhousie, one of the largest additional costs was $40 million for the Boat Harbour remediation project. The new estimated cost of that work is $292 million, only about $30 million of which has been spent so far. 

None of these changes should come as a surprise. The province already released its fiscal update for 2020-21, which showed the government is on track for a deficit of $853 million.

It's a more clear picture of the effects COVID-19 and related response efforts are having on Nova Scotia's finances.

Federal transfers to the province continue to increase. For 2019-20, money from Ottawa accounted for 32 per cent of what the province took in. Casey said the increase largely reflects per-capita funding models and the fact the provincial population has hit an all-time high.

Premier Stephen McNeil said the additional funding going to Dalhousie would be used for the Nova Scotia COVID Research Council.

The council will set the criteria to determine how the money is spent, but McNeil said the province has asked that it consider the needs of the province's tourism industry, which has projected losses of $1 billion this year. In particular, he'd like a focus on large operators who a large employers.

'Our priority is the public health of Nova Scotians'

Although the province is facing a massive deficit, Casey said it would not affect the government's approach to helping people and businesses as further need related to the pandemic emerges. 

"Our priority is the public health of Nova Scotians, and we will continue to provide supports either to individuals or to small businesses as required."

NDP Leader Gary Burrill said he has questions about how the arrangement will work with the new funding for Dalhousie, including why the government is only suggesting what should happen with the money.

"I don't understand why the government wouldn't say, 'We are the Government of Nova Scotia, this is a priority for us, our resources are going to be directed toward it and we are going to be spending X million of dollars on Y programming ourselves.'"

Burrill said Thursday's numbers prove it was a mistake for the province to bring in a corporate tax reduction earlier this year. He said that is money that could have been useful in trying to help respond to the pandemic.

Like Burrill, Tory MLA Tim Halman said questions related to much of the government's COVID-19 response should be asked and answered in the legislature, or within legislative committees.

A date has not been set for when Province House will be recalled, nor has McNeil said when committees will resume operations after being shut down in March.

He has said previously that it would be sometime this fall. House leaders are currently discussing how a return to legislative business will look in light of public health protocols.

"Unfortunately, we're not able to use the formal mechanisms to ask folks those questions," Halman told reporters on a sidewalk outside Province House.