Rising N.S. budget worries opposition, business
Nova Scotia opposition and business leaders are criticizing the NDP government's decision to increase spending by nine per cent in its 2009-10 budget at a time when revenues are down.
Leanne Hachey of the Canadian Federation of Independent Business — which represents small, independent business owners — said that level of spending is unsustainable when provincial exports and revenues have dropped.
"Departmental expenses look like they're up about 10 per cent over estimates from last year. This is at a time when our economic growth is projected to be less than one per cent," Hachey said Thursday.
"So, we're spending about 33 times more that our projected economic growth, which is concerning. The current government has already said that that path is unsustainable, and we're definitely on board with them. It is clearly unsustainable."
Government spending for 2009-10 will be $9.1 billion, driving the provincial deficit to $592 million.
NDP Finance Minister Graham Steele said he chose not to cut government spending halfway through the fiscal year because it would create "instability."
"You can damage the economy if you pull back too far, too fast. What we're trying to do is recognize the fiscal situation that we're in, while living within our means," Steele said Thursday.
"It's just like when you're driving a car and you need to deal with speed and safety at the same time. We're trying to find that right balance, and it's an ongoing struggle."
He said it was too late to take drastic action, and he blamed the size of the deficit on the previous Progressive Conservative government, defeated at the polls in June.
"The first budget we consider to be truly our own is going to be next spring," Steele said.
'Clearly an NDP budget'
The budget numbers suggest the government will need to find $570 million in cuts to services between now and then if it intends to deliver a balanced budget next year without tax hikes.
Liberal Leader Stephen McNeil said the government shouldn't wait for spring to deal with the ballooning deficit, or it will risk having to make huge cuts to government jobs and services next year.
McNeil said he believes Premier Darrell Dexter's NDP also contributed to this year's red ink.
"This is clearly an NDP budget. This deficit squarely belongs at the feet of Mr. Dexter. It's an NDP deficit that has been created by this government in the decisions that it has made since the election campaign," he said.
"There is a $341-million advance payment to post-secondary institutions that is not due to next year."
Interim Conservative leader Karen Casey was also critical of the NDP's blaming higher spending and a growing provincial debt on decisions her party made while in government.
She also assailed the government for not keeping all the commitments made during the election campaign last June.
"There is no money in this budget for a justice centre in Springhill, or anywhere else," she said.
The Tories had promised to spend $17 million on a new jail for the Cumberland County town, which is in the riding of Cumberland South, held by Tory MLA Murray Scott, a former Springhill police officer.
Justice Minister Ross Landry said the government will spend $1 million on a study to find out whether there is a business case for building a new jail in Springhill.