N.S. Tories left finances in bad shape: NDP

Nova Scotia's new government says the Tories were on an "unsustainable" fiscal road that would have seen the debt climb about $4 billion in three years.

The NDP released an external report Monday into the province's finances.

Finance Minister Graham Steele said the audit found that spending has been rising, while revenue is flat or declining due to the recession and reduced offshore and equalization payments.

He said if the province continued on the path set by the previous Progressive Conservative government, the annual deficit would be $1.3 billion and the debt $16.7 billion by 2012-13.

The provincial debt is currently $12 billion.

Steele blamed the Tories, saying they didn't reveal the true extent of the province's desperate financial situation.

"The previous government was on an unsustainable path," he told reporters in Halifax.

Steele refused to say what the NDP will do about it.

But he promised the government would have a "considered response," with the first steps coming on Tuesday. He also said the NDP plans to balance the budget in the next fiscal year, 2010-11.

Deloitte, the firm that produced the report, said one option available to the NDP is to alter the legislation that requires rapid debt repayment — a move that essentially mirrors what the Tories wanted to do before their defeat.

PC Leader Karen Casey said there are no surprises in the report and the NDP faces the same choices that her party did.

"We had some tough decisions to make in May. And I'm interested to hear what [Steele's] tough decisions will be, because you cannot sustain what was there, you cannot balance a budget with what was there unless you make some drastic changes," she said.

Casey said the Tory plan meant jobs and no cuts to programs.

The Liberals say the NDP government hasn't been honest.

Liberal Leader Stephen McNeil said while the Tories underestimated expenses, the New Democrats are inflating the figures to make it appear like they're doing a good job of controlling costs.

Premier Darrell Dexter announced the fiscal review in June, shortly after his party formed a majority government. He said he wanted an independent audit to provide a "fresh perspective" on the province's finances.

The NDP government will present its first budget this fall, after MLAs return to the legislature on Sept. 17.