Maureen MacDonald blamed a slumping global economy for shrinking the province's revenue, resulting in a projected $277-million deficit for the 2012-2013 fiscal year — a $66-million increase when compared with the budget she tabled last April.
"It is the case that economic growth has slowed everywhere," she told a news conference, adding that British Columbia, Alberta, New Brunswick, P.E.I. and the federal government have all released updates this year showing lower-than-expected revenue.
Earlier in the day, the Newfoundland and Labrador government said its deficit forecast had jumped to $726 million from a $258-million shortfall projected last April.
Despite the fiscal setback in Nova Scotia, MacDonald said the NDP government remains committed to balancing its books by next spring with a provincial election widely expected some time in 2013.
"This hill has gotten a little steeper to climb and we fully recognized that," she said. "But we will continue to make that steep climb."
With the Nova Scotia economy in neutral, the province is predicting its revenues will drop by $90 million, mainly because of a $61 million decrease in projected income tax revenue.
MacDonald also said the province's economy is expected to grow more slowly than expected.
Liberal finance critic Diana Whalen said balancing the budget by next spring will be next to impossible.
"The minister spoke of a steep hill to climb — she has an enormous hill to climb and the cost will be cuts to education and health," Whalen said.
"I think we have to look at not blaming the rest of the country or the economic conditions worldwide, because the rest of the country is doing much better than Nova Scotia."
Progressive Conservative Leader Jamie Baillie said the provincial economy is being dragged down by the country's highest taxes and electricity rates, not global economic forces.
"Our economy has gone into reverse," he said.
MacDonald said the government is focused on keeping a tight rein on spending, pointing out that departmental expenses have come in under budget for the fourth time in four years.
As well, MacDonald said she has told her NDP colleagues they can forget about a pre-election spending spree.
"There are a lot of asks in a pre-election period," she said. "I indicated to them that they need to understand that it may be a pre-election year, but the behaviour of past governments at pre-election time is not something we can entertain."
She also boasted about the province's declining debt-to-GDP ratio and the government's success in getting unbudgeted spending under control.
When asked about potential budget cuts in the spring, MacDonald said it was too early to talk about that, suggesting there are some big-money projects on the horizon that could boost the province's revenue.
Among those projects are the Deep Panuke offshore energy development, the $25-billion federal shipbuilding project in Halifax and pending construction of a new convention centre in Halifax.