Government ‘Overspending’ Sparks Concerns as N.S. Reveals Budget
HALIFAX – The Government of Nova Scotia plans to continue its spending spree on healthcare, housing, and capital projects over the next year.
The province released its annual budget on March 23, once again pledging to spend big bucks on fixing the dysfunctional healthcare system, putting more than a billion dollars into capital projects, and heaping more money into housing initiatives.
Health care spending alone will cost the government $6.5 billion over the next year. That’s about $1.2 billion more than when Tim Houston’s government took office.
The government’s total budget spending this year will add another $1.4 billion to the province’s debt, putting Nova Scotia $19.5 billion in the red.
No big surprises
Although the province plans to pick up its pace of spending, many of the specific initiatives in this year’s budget are unsurprising. Several stakeholders told Huddle on March 23 that there were few surprises in the government’s plan.
Glenn Davis is the Atlantic Chamber of Commerce’s VP of policy. He said the budget was largely predictable and that he understands why it focuses on the areas it does.
“There wasn’t a whole lot that was new,” he said. “From the get-go, we know that the government has to improve the health care and the housing issues. And both of those benefit business as well, indirectly.
“If we can get doctors into rural communities, we can support the community. And housing, people need a house before they can even start to think about getting a job.”
Patrick Sullivan, the CEO of the Halifax Chamber of Commerce, agrees.
“I have received calls from nurses that are interested in moving to Nova Scotia. They look at the media and they say, ‘before we make a decision about moving, what’s the doctor situation in Nova Scotia? And what’s the housing situation in Nova Scotia?’,” Sullivan told Huddle.
“All of these things do apply to businesses, to employers, and to their employees. It’s a big part of what we’re thinking about right now.”
Labour and immigration
One of the business community’s biggest concerns is access to skilled labour. Davis said the chamber is happy to see an expansion of the government’s More Opportunity for Skilled Trades (MOST) program. The program gives significant tax breaks to young, skilled labourers who come to work in Nova Scotia.
The province introduced the program last year and this year expanded eligibility to nurses and committed another $20.9 million to it.
In a news release, the Chamber argued many of the province’s small businesses are still struggling to recover from the effects of the Covid-19 pandemic “in an environment of rapidly increasing costs, inflation, and scarcity of qualified workers.”
“Without assistance, the debts incurred to ride out lockdowns and restrictions during Covid may cripple small businesses… The expansion of MOST to include nurses is welcome, but more needs to be done to improve the processing of applications and recognition of skills for immigrants.”
Davis echoed the sentiment. He said programs like MOST help, but the province must have a better plan attached to its immigration strategy.
“You can accept all the immigrants you want, but if there’s no place for them to live then you’ve got an issue,” he said.
One of the province’s budget pledges was another $1 million to expand the team that supports immigration and population growth.
Spending concerns
Outside of immigration and labour, Davis said he’s particularly worried about how much debt the province is racking up.
Over the next year, the government plans to spend about $280 million more than it brings in on operational expenses. But add capital spending on top of that operations deficit and the province’s debt will climb by $1.4 billion, to $19.5 billion.
The government plans to run even bigger deficits for the three budgets that come after this one. All told, the province’s net debt could balloon to $23.3 billion by 2027.
“The trouble we found [with this budget] is no end to deficits in sight at all. They’re going to pile up increasing deficits for the next three or four years,” Davis said.
He said the business community is concerned about the “lack of a path to balance” in the government’s spending plan.
Inflation, higher wages, and the current economic conditions meant the government brought in significantly more money in taxes last year. Davis pointed out that nearly all that money went to more spending, instead of paying down the province’s debt.
“They’ve shown that they’re willing to spend, and overspend, and that’s a concern,” he said.
Sullivan said he doesn’t want to criticize the budget too much because “there’s money in there that obviously needs to be spent.” However, he said he was “surprised” the government plans to spend so much of its extra revenue.
He calculates the provine will pull in about $900 million in extra revenue this budget through personal and corporate taxes, as well as GST.
“And I think it’s probably a time where it would be nice if the government could share a little bit of it, because there are many people who are having a difficult time, and many businesses, who are our members, having a difficult time,” he said.
Sullivan said he wanted to see an increase to the basic personal amount or a corporate tax reduction.
In its budget documents, the province claims its projected deficits “reflect the government’s commitment to making investments in priority areas for Nova Scotians such as healthcare.”
Sullivan said that, with such a large chunk of the budget going to health care, he hopes to see evidence of measurable results.
“I would love to see what the expected return is in the coming years, to understand the spending a little bit better, rather than just seeing money go towards health care without a long-term view of how that spending will help,” he said.
The full 2023-2024 budget document is available online.
Trevor Nichols is Huddle’s editor, based in Halifax. Send him your feedback and story ideas: [email protected].
Editor’s note: This story was last updated on March 23, at 4:55 p.m.