POLITICS

Nova Scotia balanced budget represents a promise tweaked since election campaign

04/03/2013 05:36 EDT | Updated 06/03/2013 05:12 EDT
HALIFAX - When Nova Scotia's finance minister presents a balanced budget Thursday, she will fulfil a promise that the NDP has tweaked since it first came to power.

In the last election campaign, the party promised surpluses for three straight years, starting in 2010-11. With Thursday's budget, it will have balanced the books twice after backtracking on its original campaign commitment.

Premier Darrell Dexter says the promise was reasonable given what he knew going into the 2009 election, but once in power, it became clear that the province's shrinking offshore gas revenues would make it difficult to keep the government in the black.

"I think we're going to receive $25 million in offshore gas royalties (for 2012-13)," Dexter said Wednesday.

"In the last year of the Conservative government, they received $450 million."

Dexter says he also couldn't foresee the impact that the world economic downturn would have on the government's revenue sources. So in March 2010, the government revised its promise, saying it could balance the budget by the spring of this year.

In fact, it registered a surplus for the 2010-11 fiscal year after forecasting a deficit. But the province has remained in the red since.

Tom Urbaniak, a political scientist at Cape Breton University, said he believes a public that has grown skeptical of campaign promises did not expect the Dexter government to keep the initial commitment.

Urbaniak said people have become accustomed the familiar ploy of governments discovering supposedly unexpected surprises once they take power.

"That's what happened with the two per cent hike in the HST and in a sense what happened with the back to balance, although I don't think anyone thought seriously that they would balance the budget in the first year," Urbaniak said.

But he said with an election in the offing, voters would be less forgiving if the government failed to deliver on its commitment to balance the books this time around.

"It would be seen as a spectacular failure given the lead-up, given the anticipation and the earlier commitments," he said.

Economist Elizabeth Beale said she believes the government is on track to balance the budget because of some steps it has taken in the past, even though revenues are expected to be soft this fiscal year.

The HST increase, for instance, has added an estimated $350 million a year to provincial coffers, the government has said.

Beale, who was part of a government panel that recommended boosting the HST, said the government also contained funding increases to universities while reining in departmental spending.

But for people looking for a clear explanation on how the government will balance the books in the upcoming budget, she had a caveat.

"It's actually really difficult to track provincial departmental expenditures because there is such a re-allocation over various programs and you can move things around."

Liberal Opposition Leader Stephen McNeil is among the skeptics, citing the government's decision to knowingly omit a $27-million increase in the deficit when it presented its budget last year. That was not made public until the province's auditor general reported it earlier this year.

"We potentially believe what they are going to do is offload a bunch of expenditures for the coming year ... to make it look like they've balanced the budget," said McNeil.

Progressive Conservative Leader Jamie Baillie said he was also concerned there would be "budget trickery" on the eve of an expected election.

"No pre-pays, no funky accounting — just an honest accounting of where we are is the first step to turning the province's finances around," he said.