HALIFAX – An economy that performed better than expected and controlled spending helped Nova Scotia record a surplus of $569.1 million for the past fiscal year – up more than $100 million of its spring budget projection, Finance Minister Graham Steele said Thursday.
But the Conservatives said the swell of black ink shows that taxes are too high and should be reduced.
The NDP government initially forecast a deficit of $222.1 million for the 2010-2011 fiscal year during its budget last year, and projected a $447.2 million surplus in April.
Steele said the figures show that the government is rebuilding the province’s finances.
“When we save money, it stays saved,” he told a news conference.
“We don’t just turn around and find somewhere else to spend it like the previous (Conservative) government did.”
Tory Leader Jamie Baillie said the increased surplus is a result of taxes that are too high, taking aim at the unpopular decision to hike the harmonized sales tax by two percentage points last July.
Revenue from HST was $1.4 billion – an increase of $291.6 million over the previous fiscal year and $66 million more than what was predicted in the budget.
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“Being very good at picking Nova Scotians’ pockets is not the same as being a good financial manager,” Baillie said in a statement.
“Over-taxing Nova Scotians is nothing to brag about.”
But Steele said the government had already accounted for higher HST revenue in the 2010-11 budget and ultimately it was stronger-than-expected consumer spending that boosted revenue.
“I don’t think Mr. Baillie ever actually looks at the material. He’s got a political opinion that’s not based on facts or economics,” he said.
“He continues to try to draw a link between two things that are just not connected to each other.”
Steele said Nova Scotia’s total revenue was $661 million higher than forecast. A number of revenue sources are up, including personal income taxes ($13 million than last forecast) and corporate income taxes ($65 million higher).
Total expenses were $9.3 billion, a decrease of $171.5 million from the previous year.
Unbudgeted expenses came in at $63.5 million. The figure is up from the $24 million recorded in 2009-10, but far less that what the government said was an annual average of $277 million spent between 1999 and 2009.
The government has given itself until spring 2013 to balance Nova Scotia’s books.
This is the second consecutive year that Steele has released financial statements that paint a rosier financial picture than previous predictions.
Liberal Michel Samson said the discrepancy between the initial estimate of a deficit to the surplus announced Thursday shows the NDP’s numbers can’t be taken seriously.
“When you start giving forecasts that are off by $700 million, it comes down to a question of credibility,” he said.
The statements also reveal the province’s net debt fell to $12.8 billion on 2010-11, a decrease of $217.8 million over the previous year. That will help the province avoid about $55 million annually in debt servicing costs, the Finance Department said.
Still, that means the net debt for every man, woman and child in the province is $13,610.
Note to readers: CORRECTS to say black ink instead of red ink