N.S. forecasts $98M deficit, cuts public sector, hikes tobacco taxes
Keith Doucette, THE CANADIAN PRESS
Published Thursday, April 9, 2015 1:40PM ADT
Last Updated Thursday, April 9, 2015 7:25PM ADT
HALIFAX -- Nova Scotia is cutting public sector jobs, hiking tobacco taxes and loosening restrictions on tuition fee increases in a budget the finance minister acknowledges won't be popular but is needed to bring down the deficit.
The Liberal government talked tough in the days leading up to Thursday's budget and those warnings came to fruition for some, including students, the civil service and the province's television and film industry.
"This is a budget that holds the line on spending," Finance Minister Diana Whalen said as she delivered her $10-billion spending plan.
"It was not easy to put together and there are measures in it that will not be popular."
Among those are changes to a provincial tax credit for the film and TV industry. Whalen raised questions about the annual $24-million incentive weeks before the tabling the budget, drawing an outcry from actors including the Trailer Park Boys, who launched an online appeal asking the government to preserve the credit.
As of July 1, 25 per cent of the credit would cover a production's eligible costs. The rest of it would apply to any taxes owing within the province. The measures reduce the credit to $6 million.
Finance officials conceded the changes would weaken the province's ability to compete with other jurisdictions for film sector money. But Whalen said they were necessary given the province's financial state.
"We simply cannot afford to maintain the credit in its current form," said Whalen.
An additional $6 million would go towards a new creative economy fund for film, recording and publishing through Nova Scotia Business Inc. with a launch date set for next April.
The budget forecasts a deficit of $97.6 million for 2015-16, slightly down from the $102.1 million projected for 2014-15. The net debt is pegged at $15.1 billion.
Overall departmental spending is $8.9 billion, up a scant 0.7 per cent over last year, which is mainly due to public sector wage increases.
The civil service will see the reduction of 320 full-time positions mainly through attrition and vacancies as part of a program review calculated to save $119 million. The move has resulted in layoff notices to 163 full-time and seasonal workers since February as a part of departmental restructuring.
A large number of those layoffs are due to the elimination of the Economic and Rural Development and Tourism Department. Other moves will see Film and Creative Industries Nova Scotia getting axed, while Nova Scotia Lands will merge with the Waterfront Development Corporation.
Joan Jessome, president of the Nova Scotia Government and General Employees Union, said the layoffs are hard to take.
"Many of these jobs are in rural Nova Scotia, so it's certainly going to have an impact on them and on the programs," she said.
Universities would be allowed a one-time market adjustment to increase tuition fees. That means as of this fall, schools would be able to hike their tuition up to levels that universities in other provinces charge. A three per cent cap on tuition increases would be restored the following school year for domestic undergraduate students.
"It's a tough day for students," said StudentsNS executive director Jonathan Williams. "When this government looks for a few spare dollars, it looks to young people."
Tobacco taxes would also increase as of Friday, meaning a pack of cigarettes will cost smokers about $0.50 more. The move means $15.6 million for coffers, but officials say that won't offset a drop in revenues because fewer people smoke.
Spending on health will rise 0.8 per cent, the smallest increase in a decade.