Nova Scotia posts $143M surplus rather than expected $279M deficit

Nova Scotia closed the books on last year's budget with a $143-million surplus rather than the $279-million deficit it predicted last spring, thanks in part to an unexpected jump in taxes collected from a growing population.

Government spending for the 2023-24 fiscal year topped $16.38 billion — about $643 million more than budgeted — but revenue growth outpaced that.

Total revenues were more than a billion dollars above what was budgeted, landing at $16.52 billion.

This is the second time the Progressive Conservative government has turned a deficit budget into a surplus.

Finance Minister Allan MacMaster said that's a reflection of broad economic trends and population growth that are outside the government's control and aren't unique to Nova Scotia.

"If we believe, and others believe, that the economy will behave in a certain way and our revenues will be a certain amount, we have to go with those assumptions, and if they change, well that gives the government flexibility along the way."

The number of people who filed taxes in Nova Scotia grew by 3.4 per cent last year and GDP grew 3.9 per cent.

"We're willing to spend, if we do have the money to spend," MacMaster added.

$1.3B in unbudgeted spending

Nova Scotia recorded more than $1.3 billion in additional appropriations — that is, money that was not budgeted and approved by the legislature. It's typically for unforeseen or unexpected expenses.

Some of those appropriations were for cleanup and relief efforts for last year's multiple extreme weather events, remediation of abandoned mines and travel staff for health care.

A recent settlement agreement with Paper Excellence factored into the province's final accounting for 2023-24, with a revaluing of Nova Scotia's loans to the operator of the shuttered Northern Pulp mill that adds $35 million to the province's expenses. 

MacMaster said despite two consecutive years of bringing in more money than expected, the government intends to be careful with its approach to spending.

"The economy is cooling a bit and we have to be wary that we don't expect to continue to get the same kinds of revenue we've been seeing … the unexpected revenue, because if the economy cools, those revenues may not be as high anymore," he said.

"We don't want to be spending money that we don't think we're going to get, and that's why our budgets have been as they have been."

Opposition reaction

NDP finance critic Lisa Lachance said that's not a satisfying justification for the amount of spending that's happening through additional appropriations, which they said lacks transparency and accountability.

"We're not seeing the results in the outcomes and the impacts for Nova Scotians that we want to see," they told reporters.

Lachance pointed to the long list of people without regular access to primary health care and the growing number of people experiencing homelessness.

Nova Scotia's auditor general has also criticized the government's spending through additional appropriations.

Liberal Leader Zach Churchill said the posted surplus is proof that the government should cut sales tax — a pitch his party made earlier this year.

In a news release, the Liberal leader contrasted last year's extra tax revenue with the challenges "working families" are facing with the rising cost of living.

"Our team hears from Nova Scotians every day, in every corner of the province, how tough it has become to afford the basic necessities," Churchill is quoted as saying.

"The government is being irresponsible with the public purse."