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Nova Scotia's government bucks trend, promises back-to-back balanced budgets

Nova Scotia Finance Minister Randy Delorey addresses a business luncheon in Halifax on March 28, 2017.

Andrew Vaughan/THE CANADIAN PRESS

Nova Scotia's Liberal government is committing to a balanced budget for 2017-18 – its second straight year in the black, as red ink keeps flowing in other East Coast provinces.

Randy Delorey confirmed during a speech to the Halifax Chamber of Commerce Tuesday that the April 27 budget will confirm the government has balanced its 2016-17 books, and will introduce a balanced budget for the year ahead.

"That is exciting, that is important. But one balanced budget does not fiscal sustainability make," Delorey told the audience.

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In neighbouring New Brunswick, Brian Gallant's Liberal government has projected a $192-million deficit by the end of March 2018, while Newfoundland and Labrador is facing a $1.6-billion deficit this year and $800-million next year.

In Nova Scotia, the governing Liberals have made fiscal responsibility a key part of their political message, and will likely tout their back-to-back balancing of the books if they call an expected election later this year.

The government has been making a steady flow of small spending announcements in recent months that has added fuel to speculation a campaign call isn't far away.

Delorey also promised Tuesday that the Liberals will provide a tax break for small companies, matching a Progressive Conservative 2013 campaign promise to lower the threshold for the small business income tax rate.

He said the threshold will be rising to $500,000 from $350,000, meaning "more than 1,000 companies" will shift into the lower income tax bracket, paying rates of three per cent rather than 16 per cent on the income.

The cabinet minister declined to provide the cost to the public purse of the tax relief, but the Progressive Conservatives said when they costed the measure for their campaign document they estimated it would be about $4.5-million annually.

Tim Houston, the Progressive Conservative finance critic, said he favours balanced budgets. Still, he wondered aloud what it would mean for government services ranging from schools to nursing homes.

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"Balancing the budget is a good thing. What's even better is if it's balanced according to the priorities of Nova Scotians," he said.

NDP Leader Gary Burrill said after the speech that the Liberals have decided that avoiding a deficit is more important than restoring cuts to nursing homes' operating budgets and improving classroom conditions.

"I think the minister of finance has made it very clear in this budget the government isn't going to make investments that are required," he said.

During a recent labour dispute with the province's 9,300 teachers, educators testified at legislature hearings that conditions in classrooms had been deteriorating and added resources are urgently required.

Meanwhile, on Monday, the Nova Scotia Government and General Employees Union released figures obtained through freedom of information showing increased waiting times in hospitals, and bed shortages that have led to CPR being performed in the elevators.

Delorey also said during his pre-budget address that the Liberals will reduce regulations for businesses, claiming it will save them about $25-million in 2017-18.

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However, he didn't provide a detailed breakout of how those savings would occur when pressed by reporters following the speech.

Delorey also didn't give further details on whether a $12-million surplus forecast for 2016-17 in December would still be available to pay down the debt.

In the last fiscal update, he noted the province was reducing its surplus forecast after Ottawa requested it refund overpayments of harmonized sales taxes revenues.

Rona Ambrose, Tom Mulcair slam federal budget (The Canadian Press)
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