Premier Darrell Dexter announces that the Nova Scotia government has reached a new agreement to reopen the shuttered NewPage Port Hawkesbury paper mill in Cape Breton, Sept. 22, 2012. The mill shut down last September, throwing some 600 people out of work and affecting another 400 forestry contractors.Andrew Vaughan/The Canadian Press
Politics Insider delivers premium analysis and access to Canada's policymakers and politicians. Visit the Politics Insider homepage for insight available only to subscribers.
Nova Scotia Premier Darrell Dexter is promising to deliver a balanced budget next month. It's a bold vow and one that has skeptics asking if his promise is motivated by election-timing rather than good bookkeeping.
An election is expected this year and Premier Dexter promised as one of 50 campaign commitments he made when he first came into power in 2009 that he would balance the books in 2013-2014.
Just a few days ago, he announced he could keep his campaign commitment. The budget is to come down on April 4 – and it will show a small surplus.
For months, however, he and his finance minister, Maureen MacDonald, were wavering about keeping their promise.
That's because the province's fiscal update late last year showed that the 2012-2013 deficit had risen by $66-million to $277-million – a result of a decrease in personal income tax revenues "due to slower than expected growth in labour income and employment," according to the Atlantic Provinces Economic Council's (APEC) quarterly report.
As Elizabeth Beale, APEC president, points out, Nova Scotia is one of the weaker performing economies in the country. But surplus can be achieved, she believes, if the government is careful "in managing the overall parameters of government spending."
One thing it can't control, however, is the Harper government budget that is coming down on Thursday – a document that Premier Dexter and his officials are anticipating with some nervousness.
And with good reason. Cuts to the federal public service and to the military will have profound effects in the province. Nova Scotia's workforce has a disproportionately large number of federal government employees than other provincial workforces.
"We have a high share of Canada's bases located in Nova Scotia," notes Ms. Beale. "A lot of defence expenditures still revolve around people. So when you start paring back it hurts employment right away and not just directly in the military but in all related [aspects]."
In addition to fears about cuts to the navy and public service, the Dexter government is concerned about employment-insurance-related initiatives, including labour market development agreements. Money for skills training needs to stay intact or even be increased as Nova Scotia looks to provide skilled labour for the $25-billion shipbuilding contract and also for the so-called Maritime Link that will transmit power to Nova Scotia from Newfoundland and Labrador by an undersea cable.
A senior Dexter official, who spoke on background, said the Harper budget would not have such an impact that the Dexter government would have to abandon its promise to achieve a balanced budget. The official says they're not going to "pull a rabbit out of hat" but have been conservative in their budget-making.
Besides, the official says, there is no political advantage for the Premier to promise a balanced budget one day and a few days later blame the federal government for not being able to achieve that.
Progressive Conservative Leader Jamie Baillie, meanwhile, says he will be "watching very carefully for any new accounting tricks that make a budget look good on paper."
He says he won't consider the budget balanced if he doesn't see some reduction in the number of health authorities and school boards in this small province. "There is so much administration, so much money that is not getting into frontline services or classrooms," says Mr. Baillie. "That is where they need to go to balance the budget. Until they do that then I don't think people will be satisfied."
Canadian Taxpayers Federation's Kevin Lacey says for now he is taking Premier Dexter at his word that he can balance the budget – despite all of the negative economic numbers.
"I was surprised especially when you consider across the country everyone is missing their revenue targets and in Nova Scotia they are missing their projections as well for what they thought the deficit was going to be," says Mr. Lacey about the Premier's recent vow to find balance. "Our hope is this is a sincere effort to balance the budget and it's not politics in the lead-up to the election."
Jane Taber is The Globe and Mail's Atlantic bureau chief, based in Halifax.