Nova Scotia's capital spending plan shrinks by eight per cent

HALIFAX -- The Nova Scotia government released a slimmed-down capital spending plan Monday, saying it intends to spend $490 million on highways, schools, hospitals and equipment in 2015-16 -- the smallest capital budget in seven years.

As usual, almost 70 per cent of that money will be spent on highways, buildings and land. The remainder will be split between capital grants, information technology, vehicles and a contingency fund.

The total amount represents an eight per cent reduction when compared to last year's plan and is smaller than every other capital plan since 2008-09.

Earlier this month, Finance Minister Diana Whalen released a fiscal update that called for lower spending and a predicted $54-million reduction in the province's annual deficit.

The 2014-15 budget forecast pegged the deficit at $220.6 million, down from the $274.5 million that was estimated in September.

However, Premier Stephen McNeil has said the improved numbers can't hide the fact that the province's economy is performing poorly as government spending continues to rise for public sector wages.

In August, Whalen introduced a mid-year spending reduction plan in a bid to meet budget goals.

The capital spending plan will be tabled in the spring session of the legislature, where it will be subject to approval in the 2015-2016 budget.

The plan calls for nine major highway construction projects, the building of nine new schools and the repair or replacement of 16 bridges.

Spending by the Transportation and Infrastructure Renewal Department accounts for about 48 per cent of the capital budget. The Education Department plans to spend about 20 per cent of the total, and the Health and Wellness Department is the third-largest spender, accounting for 16 per cent.

The province also released a five-year highway improvement plan for repairing and maintaining the province's 23,000 kilometres of roads and 4,100 bridges.

That document doesn't include a cost estimate for the next five years, but it confirms the province will spend $220 million on highways and bridges in 2015-16.