The budget deficit is forecast to be $58.9 million in 2013-14, not the $34.2 million laid out in a three-year plan in April 2012.
Finance Minister Wes Sheridan presented his 2013-14 budget in the legislature Thursday. With it he delivered a new three-year plan to balance the budget in 2015-16, a year later than previously forecast.
Sheridan told media in the budget lockup that he made the decision to delay balancing the budget after consultations with Islanders early this year. About 85 per cent of people he met with said they did not want to see drastic cuts in order to eliminate the deficit.
"Stay the course, take one extra year, and let the revenue sources catch up," Sheridan said he was told.
So while he is giving it an extra year, how he will go about delivering that balanced budget has not changed.
“We will hold expenditures at current levels, while growing revenues as the economy expands,” Sheridan said in his budget address.
Last year Sheridan said all departments would hold the line on expenditures except for health, which would be allowed a 3.5 per cent increase.
Sheridan chose not to hold the line on as firmly as he proposed in 2012.
Community Services received a $4.4 million boost to funding. Tourism and Culture’s budget came close to doubling, with a $7.1 million increase in funding for cultural grants. Most of that is for 2014 celebrations and renovations to Confederation Centre.
Tax revenue founders
The other pillar of the deficit elimination solution is showing some cracks.
Last April Sheridan estimated provincial revenues at $891.5M for 2012-13. That number was estimated Wednesday at $848.5 million.
Sheridan said the government has adjusted its expectations for growth from 2012 to 2016. The April 2012 plan was based on economic growth of 3.5 per cent per year, and that has been scaled back to 3.0 per cent.
Sheridan expects revenues will rise to $895 million in 2013-14. This increase will in part come from an extra $24 million generated by the introduction of the HST.
Despite the drop in provincial revenues in 2012-13, the province was able to reduce the projected 2012-13 deficit, from $74.9M to $69.2 million.