Nova Scotia’s deficit forecast will be at least $300-million higher than expected when Finance Minister Diana Whalen tables her first fiscal update Thursday.
Whalen confirmed Wednesday the added charge is the result of advice from the province’s Auditor-General, who has told the new Liberal government it should account for an unfunded liability in the public service pension plan in this fiscal year.
Whalen says she doesn’t have to follow Jacques Lapointe’s advice, but it would be imprudent to ignore him.
The Finance Minister’s revelation came after the acting leader of the New Democrats accused the Liberals of pulling a political stunt by artificially inflating the deficit to make the previous NDP government look bad as it projected a slim surplus of $18.3-million for 2012-13.
Maureen MacDonald, who served as finance minister until the NDP was defeated in the October election, says a legal opinion she received in February suggested it would be better to amortize the liability over a period of 11 years – putting less strain on the budget.
However, Whalen cited a Nov. 29 letter from Lapointe that says his reading of the legal opinion led him to conclude the liability had to be accounted for in this fiscal year.
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