Province suddenly in black: premier announces surplus

Nova Scotia is – unexpectedly – back in the black.

Premier Darrell Dexter announced the province is ending the fiscal year 2010-11 with a $447 million surplus in the House of Assembly during an evening session on Monday.

Replying to last week’s throne speech, the premier said the money will be used to reduce the province’s massive $13-billion debt.

“Rather than spend the surplus at year-end…this government took the view that a penny saved is a penny saved,” he said.

Dexter says the surplus breaks down as follows:

$133.5 million in reduced departmental spending.
$80 million in reduced debt servicing costs.
$39.4 million in other savings.
$220.3 million in better than estimated provincial revenue.
$196.1 million in prior-year revenue adjustments.

In light of the recent figures, Progressive Conservative Party Leader Jamie Baillie is calling on the government to lower the HST, noting last year’s two per cent hike last year generated about $220.3 million.

“The NDP government has created a one-year surplus by charging Nova Scotians the highest taxes in the country,” said Baillie in a media release, Monday. “It would be better to achieve a surplus at a competitive level of tax in a growing economy.”

Since the surplus outweighs the revenue from the HST hike the Liberal leader is also calling for the tax to be cut.

“It’s clear that the NDP crafted a fiscal mirage that helped them needlessly reach into the pockets of Nova Scotians,” said Stephen McNeil. “If they did not intentionally mislead Nova Scotians, they are financially inept.”

However, Dexter says this year’s budget will still end with a deficit of about around $222.1 million for 2011-12.

Before the surplus was announced Leanne Hachey, vice president of the Canadian Federation for Independent Businesses, told the Rick Howe Show it will be looking to a provincial tax strategy in today’s budget.

“We would really like to see a bigger-picture plan. The HST reduction should be part of that when the budget is balanced, but we also need to look at what are we doing on the personal income tax side,” said Hachey Monday afternoon.

Also looking for an HST cut is Christine Saulnier of the Canadian Centre for Policy Alternatives who says across-the-board measures should be scrapped, including the province’s rebate on the provincial portion of the HST on oil and electrical bills.

“We have problems with that kind of across-the-board policies especially when we are looking at limited resources,” said Saulnier. “We want to see some principals that are based on fairness that are looking at policies and thinking about who is in need in our province.”