The province promised funding focused on improving the lives of Nova Scotians, building on economic success and investing in infrastructure in its fifth consecutive balanced budget introduced Tuesday.
The Liberal government projects a surplus of $55 million on $11.6 billion in revenue for the 2020-21 fiscal year.
“With our stronger economy and our positive fiscal position, we want to share this economic success,” Finance Minister Karen Casey said. “Budget 2020-21 supports Nova Scotians who may not have been feeling the success of the province.
“This includes an investment of over $100 million for those who need it the most.”
The budget, described by opposition leaders as a pre-election budget, includes $18 million for the provincial child benefit.
“The low-income threshold will be adjusted to $34,000,” Casey said, providing funding to an additional 28,000 families and 49,000 children.
“The disability support program budget is increasing by $16.6 million this year, with $7.4 million dedicated to transitioning residents from larger residents into community-based living.”
The government is contributing $18.7 million for affordable housing and other housing initiatives, $4.1 million has been allotted for the action plan to address homelessness and $2 million for the affordable renters program.
“Over the next five years, government will invest $1.4 million annually for more supports and services for victims and survivors of human trafficking, their families and the entire community,” Casey said.
Opposition Leader Tim Houston said the budget ignores the province’s decelerating economy.
“What we are seeing is that Nova Scotia is not in the great shape that the government would have you believe,” Houston said. “The economy is slowing and it could easily contract this year.”
Health spending
The Health Department budget will again eat up the lion’s share of expenditures, accounting for 41.5 per cent of the entire budget. That is up slightly from last year.
Health-care services will include $75.3 million this year for the new collective agreement with doctors to improve the recruitment and retention of medical professionals. The province boasts that the agreement makes family, emergency and anesthesia doctors the best paid in Atlantic Canada.
“We have a crisis in health care, we have major problems in housing, we have the highest child poverty, these are situations that have continued to get worse and worse every single year and this government that has kind of sat on the sidelines and watched things deteriorate is now trying to create the illusion that they have the solutions for them,” Houston said.
Mental-health waits are atrocious and the government is talking about a $550,000 investment in mental health, 55 cents a person, Houston said.
“Realistically, if you have a friend who is struggling and you take them out for a coffee, you’re doing more for mental health than this government is willing to.”
Finance Minister Karen Casey discusses budget
The previously announced $17.5 million to roll out 48 additional pre-Primary school communities is part of the 2020-21 budget. The province says the investment will provide access to its pre-primary program for every four-year-old in the province along with bus service for the pre-primaries.
The budget also includes $70.5 million to reduce the corporate tax rate by two per cent, down to 14 per cent, in what the province says will help Nova Scotia businesses become more competitive and innovative and allow businesses to reinvest and grow.
“What we have here are actually two completely different budgets,” NDP Leader Gary Burrill said. “There is a great banquet feast in one that has been laid out for the corporations of the province in the form of this $70-million tax cut, then there’s another budget that is casting crumbs out on the people of the province and those particularly who are in need.”
Burrill said the government’s social-spending initiatives are the fiscal equivalent of the death-bed conversion.
“After years in which the province has really been starved for social spending, now on the front porch of an election, we have all these crumbs being tossed in all kinds of different directions. The spending, yes, fine, but it’s a little bit little and it’s a whole lot late.”
The budget also sets aside $154.4 million for health-care redevelopment projects, including a portion of the overall $2-billion redevelopment of the QEII Health Sciences Centre in Halifax and the Cape Breton hospital project.
Education and infrastructure
The influx of infrastructure money also provides $265.6 million to build and renovate 16 schools and the purchase of 30 P3 schools. An $85.3-million injection has been allotted for the province’s roads, highways and bridges, part of a $383.5-million 2020-21 expenditure that will provide for work on the Sackville-Bedford-Burnside connector and the twinning of portions of highways 101, 103 and 104.
The budget provides $15 million to continue implementing recommendations from the Commission on Inclusive Education.
The province is spending $5 million in each of the next two years to establish its forestry innovation rebate program, $5 million for the film and television production incentive, bringing that program’s total budget to $25 million, and $8.3 million on the Efficiency Nova Scotia home-warming program.
The province is setting aside $1.6 million to a green fund that will include developing a new climate change strategy, climate change risk assessment and a cap-and-trade auctioning system.
“The awareness is certainly muted,” Burrill said of government initiatives on climate change. “We saw this in their legislative program last year where they brought in greenhouse gas emission targets which do not meet the international standard of being consistent with holding global warming within 1.5 degrees.
“The climate emergency spending here belongs on the same place on the shelf as their Sustainable Goals Development Act did last fall. It’s in the category of something but not in the category of something that is commensurate with the level of the crisis.”
The student loan forgiveness program for former university and community college students will get an influx of $2.2 million.
The province has extended the digital animation tax credit and the digital media tax credit to the end of 2025 and budgeted $22.2 million for those programs in its 2020-21 outlook.
Taxes and spending
The province will permit and tax vaping products, effective Sept. 15. The taxation rates will be 0.5 per cent per millilitre for liquid products and 20 per cent of retail value for all devices.
Taxes on cigarettes will increase Tuesday morning by two cents per cigarette to 29.52 cents. That will increase the price of a pack of 25 cigarettes by 50 cents and the tax hike will generate $10.8 million. Taxes on cigars will increase to 75 per cent of suggested retail price, up from 60 per cent.
The province has projected a loss of $32 million in taxes collected for the fiscal year because of the closure of the Northern Pulp mill in Abercrombie Point, Pictou County. That number is estimated primarily from a reduction in personal income taxes.
The province expects to spend $11.54 billion in the fiscal year. It will collect a projected $6.1 billion in taxes, almost $3 billion of which will come from personal income tax. The collection of personal income taxes will increase by six per cent or $168 million from last year, a jump the province attributes to having more people working and earning more money.
The province’s net debt will increase by $500 million, from $15.2 billion at year end in 2019-20 to $15.7 billion at the end of fiscal 2020-21. The hike is spurred primarily by a record $1-billion capital plan announced last week.
Nearly $3.75 billion of provincial revenues come from federal sources, including equalization payments and the Canada health and social transfers.
“Look at the money coming from the federal government in transfer payments, it’s going up and up every single year and the reason that is going up is because Nova Scotia is falling further behind,” Houston said.
“In many ways this is an election budget,” Houston said. “There are investments in this budget that could have been made years ago. … I am optimistic about an election being on the horizon and having the opportunity to help Nova Scotians thrive.”
Casey rejected the pre-election budget notion.
“This budget represents the needs Nova Scotians identified,” she said. “The only people I hear talking about an election are the media and the opposition.”
TORONTO – Canada’s main stock index was higher in late-morning trading, helped by strength in energy stocks, while U.S. stock markets also moved up.
The S&P/TSX composite index was up 34.91 points at 23,736.98.
In New York, the Dow Jones industrial average was up 178.05 points at 41,800.13. The S&P 500 index was up 28.38 points at 5,661.47, while the Nasdaq composite was up 133.17 points at 17,725.30.
The Canadian dollar traded for 73.56 cents US compared with 73.57 cents US on Monday.
The November crude oil contract was up 68 cents at US$69.70 per barrel and the October natural gas contract was up three cents at US$2.40 per mmBTU.
The December gold contract was down US$7.80 at US$2,601.10 an ounce and the December copper contract was up a penny at US$4.28 a pound.
This report by The Canadian Press was first published Sept. 17, 2024.
TORONTO – Strength in the base metal and technology sectors helped Canada’s main stock index gain almost 100 points on Friday, while U.S. stock markets climbed to their best week of the year.
“It’s been almost a complete opposite or retracement of what we saw last week,” said Philip Petursson, chief investment strategist at IG Wealth Management.
In New York, the Dow Jones industrial average was up 297.01 points at 41,393.78. The S&P 500 index was up 30.26 points at 5,626.02, while the Nasdaq composite was up 114.30 points at 17,683.98.
The S&P/TSX composite index closed up 93.51 points at 23,568.65.
While last week saw a “healthy” pullback on weaker economic data, this week investors appeared to be buying the dip and hoping the central bank “comes to the rescue,” said Petursson.
Next week, the U.S. Federal Reserve is widely expected to cut its key interest rate for the first time in several years after it significantly hiked it to fight inflation.
But the magnitude of that first cut has been the subject of debate, and the market appears split on whether the cut will be a quarter of a percentage point or a larger half-point reduction.
Petursson thinks it’s clear the smaller cut is coming. Economic data recently hasn’t been great, but it hasn’t been that bad either, he said — and inflation may have come down significantly, but it’s not defeated just yet.
“I think they’re going to be very steady,” he said, with one small cut at each of their three decisions scheduled for the rest of 2024, and more into 2025.
“I don’t think there’s a sense of urgency on the part of the Fed that they have to do something immediately.
A larger cut could also send the wrong message to the markets, added Petursson: that the Fed made a mistake in waiting this long to cut, or that it’s seeing concerning signs in the economy.
It would also be “counter to what they’ve signaled,” he said.
More important than the cut — other than the new tone it sets — will be what Fed chair Jerome Powell has to say, according to Petursson.
“That’s going to be more important than the size of the cut itself,” he said.
In Canada, where the central bank has already cut three times, Petursson expects two more before the year is through.
“Here, the labour situation is worse than what we see in the United States,” he said.
The Canadian dollar traded for 73.61 cents US compared with 73.58 cents US on Thursday.
The October crude oil contract was down 32 cents at US$68.65 per barrel and the October natural gas contract was down five cents at US$2.31 per mmBTU.
The December gold contract was up US$30.10 at US$2,610.70 an ounce and the December copper contract was up four cents US$4.24 a pound.
— With files from The Associated Press
This report by The Canadian Press was first published Sept. 13, 2024.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
