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N.S.’s Dexter worried Ottawa will throw ‘huge wrench’ into budget-balancing plan

Nova Scotia Premier Darrell Dexter says he's concerned Ottawa could soon throw off the province's bid to balance its budget this spring.

Mr. Dexter, speaking to reporters Tuesday after a cabinet meeting, said Finance Minister Jim Flaherty is poised to release a document that could lob a "huge wrench" into the government's plans – but he didn't say what that document was.

A spokesman for the Premier later said Mr. Dexter was referring to Mr. Flaherty's announcement Oct. 5 that he will be providing a fiscal update some time this fall.

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"We're on track, [but] so much of what we do is directly related to what the federal government does," the Premier said.

About 35 per cent of the province's revenues come from federal sources.

The Premier said last-minute federal adjustments could cost the province hundreds of millions of dollars in revenue.

"You can work down a path to a balance and get within a few days of your budget coming down and all of a sudden, have a huge wrench thrown into that," Mr. Dexter said. "We're acutely aware of it."

When Mr. Dexter's New Democrats were elected to govern in 2009, they promised to balance the books the following year without raising taxes.

Instead, the government raised the harmonized sales tax by two percentage points and shelved its balanced budget pledge until 2013.

Earlier this year, the government announced it would roll back the HST increase over two years, starting in 2014.

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Mr. Dexter said despite a big decline in royalty revenue from Nova Scotia's offshore energy producers, the province is in much better shape than in 2009.

He said 8,800 more people are working now and the jobless rate has fallen from 9.3 per cent to 8.6 per cent even though the province has endured "three years of one of the greatest recessions in our lifetime."

Still, the province remains saddled with a $231-million budget deficit, said Finance Minister Maureen MacDonald.

She said the province is looking for more ways to save money and generate revenue.

"Our plan is working," she said. "We've reduced expenditures by about a billion dollars, but we still have a ways to go to get back to a balanced position."

However, Progressive Conservative Leader Jamie Baillie said it appeared Mr. Dexter was laying the ground to break another fiscal promise after raising the HST and running three consecutive deficits.

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"He tells us that he's going to balance in his fourth year, but here we are in October and the finger pointing and excuses has already started," said Mr. Baillie.

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