N.S. auditor general calls for more oversight on spending outside budget process

For the second consecutive year, Nova Scotia’s auditor general is calling for legislative oversight of spending sprees by the Progressive Conservative government that happen outside of the regular budget process.

Kim Adair’s financial report, released Tuesday, says extra government spending has reached a 10-year-high — close to $1.7 billion on top of the $14.7 billion in expenses included in the budget for the 2022-23 fiscal year.

Adair is again recommending the Finance Act be amended so that additional government spending is brought before the legislature for debate — as is required in other provinces and federally.

The provincial minister of finance, meanwhile, has disputed the auditor’s stance, saying the province publishes a series of budget updates over the course of the year.

But Adair said the amount of money involved is growing, with her report noting that additional spending has increased by 279 per cent between the 2013-14 and 2022-23 fiscal years.

“The response from the (finance) minister is that he feels the current situation is fine as it is. However, I find that terribly disappointing for the Nova Scotia taxpayer,” she said during a news conference.

“In my view it calls into question why have the budget and the original budget process when you can overspend to that extent?”

Annual budgets introduced by the government must be adopted by the legislature. But extra spending, often as a result of unexpected additional revenues, is at the discretion of the government.

Nova Scotia’s legislature, she added, sits less frequently than the national average, further limiting opportunities for members to question spending. The legislature in Nova Scotia sat 45 days in 2022-23, 19 per cent less than the national provincial average of 56 days.

One example of extra spending discussed in the report is the $257 million set aside for bonuses and incentives offered to nurses, aimed at keeping them in their jobs or encouraging them to return to work. The province had anticipated between 1,500 and 2,000 nurses would accept $10,000 to return to work for at least two years, but only 148 did.

The government announced the bonuses on March 20, weeks before the end of fiscal 2022-23, a period opposition members often referred to as “March madness.”

Adair was hesitant to comment on the effectiveness of the financial incentives given to the nurses and other health-care workers, but said her office will carry out a “value-for-money” audit done on expenses that were not included in the budget.

A spokeswoman for Premier Tim Houston’s office sent an email on Tuesday night saying the retention program had been effective, as the bonuses paid to thousands of nurses and health-care workers who received money showed “they are valued and that we are committed to improving our health-care system for all Nova Scotians.”

Catherine Klimek said the $10,000 payments to the 148 nurses who committed to the jobs amounted to about $1.5 million of the total funds spent.

“We are not aware of any other initiative that has resulted in the hiring of this many nurses in such a short amount of time,” she said.

Meanwhile, Adair’s report also mentions the soaring costs for the toxic waste cleanup at the Boat Harbour lagoon, near Pictou Landing First Nation, which have risen by $139 million over the past four years to reach a current projected cost of $350 million.

“The liability to clean up Boat Harbour is growing, while the project awaits federal approval,” Adair said, adding that $83 million of the higher cost is due to inflation. She added that the price tag will likely keep rising as the project awaits federal environmental approval.

Liberal Leader Zach Churchill said if his party eventually wins power, it will change the Finance Act to align with the auditor general’s recommendations, and the rest of Canada.

“The government’s willingness to throw hundreds of millions of dollars at things without knowing if it will make a difference is problematic,” he said.

Churchill suggested the government could have chosen to reduce taxes, rather than rapidly spend money, after it learned that its provincial sources of revenue were $1.9 billion higher than expected in 2022-23.

Susan Leblanc, an NDP member of the legislature for Dartmouth North, said the government’s extra spending should have been presented to members and at committees. “It’s not very well thought out,” she said, referring to the bonus system created for nurses and other health-care workers.

This report by The Canadian Press was first published Dec. 5, 2023.

Michael Tutton, The Canadian Press

Note to readers: This is a corrected story. A previous version said costs for the toxic waste cleanup were initially $139 million.