The Nova Scotia government tabled a $10.1 billion budget with a $17.1 million surplus. The modest budget features an overall increase in Departmental spending of 2.1 percent. The majority of this investment will be in education and the Senior’s Pharmacare Program. There were no noticeable increases in fees while the only notable tax increase was with tobacco.
Given the economic climate in Atlantic Canada, it is commendable that the Nova Scotia government has been able to balance its books without significant tax increases. The surplus is largely due to the government’s ability to hold the line on Departmental spending while benefitting from a 2.6 percent jump in tax revenues from the previous year. RCC is still concerned that Nova Scotia’s civil service continues to grow and that the province remains one of the most heavily taxed provinces in Canada. However, RCC is cautiously optimistic that the return to a budgetary surplus is good news for the retail sector. Our caution relates to the fact that the razor thin projected surplus is based on the assumption that there will be no increase in overall health care spending. Health care accounts for over 40% of the province’s budget and over the past five years, health care spending has increased by an average of two percent each year.
Measures bearing on consumer spending or on retail goods and employment include:
Tobacco tax: will increase by 2 cents per unit, 50 cents a pack or $4 per carton. The tax on cigars will increase by 4%. The tax does not apply to e-cigarettes.
$3 million to help seniors with Pharmacare costs.
Nova Scotians receiving social assistance will receive $20 more in their monthly allowance beginning at the end of May 2016. This increase will cost $7.5 million and affect 24,000 Nova Scotians.
Government will maintain the tax credit for families with young children.
Youth Employment: $3.2 million will be spent to create 150 summer jobs for students and 75 public sector placements. 600 co-op positions will be developed through partnerships with employers province-wide.
Wine Industry: $3.5 million for wineries and vineyards, which will be focused primarily on research and marketing.
Food Safety Inspection: The Budget made mention of the completion of the consolidation of inspection and enforcement services under the Occupational Health and Safety Division of the Department of Environment and Labour. This process has been ongoing where food safety inspectors were moved from the Department of Agriculture over the past year.
Food Banks: Farmers who donate produce to local food banks will be eligible for a new 25% tax credit.
Other items of note:
Real GDP: Real GDP growth for the next few years will average at just under one percent.
Net Debt: is expected to be $15.1 billion for 2015-16 and $15.2 billion in 2016-17.
RCC applauds the government’s efforts to return to a balanced budget. RCC will continue to monitor the government’s progress in keeping expenditures in check so as to remain in a balanced budget position throughout the year. If the budget remains in balance and the economy continues to improve, RCC will increase its advocacy for corporate and HST tax relief.
If you have any questions or concerns, please don’t hesitate to contact: Jim Cormier, Director (Atlantic) at: [email protected] or 902-422-4144