Despite the lucrative promise of mega-projects on the horizon, Nova Scotia Premier Darrell Dexter cautions 2012 could be rough economically because of lingering uncertainty in world markets.
In an interview with The Canadian Press, Dexter said the benefits of landing the $25-billion federal shipbuilding contract were still about a year away, while the $6.2-billion Muskrat Falls hydroelectric project in Labrador is still in the planning stages.
In the meantime, Dexter said the province could be in for turbulent times.
"Almost every economy is feeling pretty volatile," he said.
As a result, Dexter said the government realizes it needs to adapt its approach to the economy as market trends transform traditional sectors such as forestry.
A good deal of the government's attention towards the end of 2011 was trained on trying to save hundreds of jobs at the now idled NewPage paper mill in Port Hawkesbury and at the Bowater Mersey operation near Liverpool.
The government provided $14 million to keep forestry operations viable while a new buyer is sought for the NewPage mill and it passed legislation last month ratifying a $50-million deal to keep Bowater Mersey open.
Dexter said the support was given with the understanding that what survives will be a lot leaner.
"The survivors are going to be the high-efficiency, high-productivity, low-cost mills," said Dexter.
"That's how we positioned Bowater and that's how the eventual owners will position NewPage."
Further evidence the government expects rough economic waters came when Finance Minister Graham Steele gave a budget update in mid-December that revised the province's economic growth rate to 1.4 per cent — down from the 1.9 per cent forecast last spring.
Steele also announced a beefed up capital budget of $610 million for fiscal 2012-13 with the aim of creating jobs in the midst of a stalled national and international economic recovery.
Dexter said the government would also look at tax measures to make the province more competitive. He gave no details, but said any help for the middle class would have to wait until the province balances the books on its projected $365-million deficit by 2013, as promised.
But opposition parties say the government hurt competitiveness when it passed legislation during the fall session to impose arbitrated settlements on first contracts in newly unionized workplaces.
They also say the government should address rising power rates, which increased by 10 per cent Sunday, and lower business taxes.
Liberal Leader Stephen McNeil said the government's bailouts of the paper mills and a recent injection of $1 million to bolster Rodd Hotel operations in southwestern Nova Scotia are proof economic planning is lacking.
"We're going to see more of these one-offs of trying to write cheques," McNeil said.
"I think that is more about a government that is trying to limp its way through to the next election."
Conservative Leader Jamie Baillie said with the economic situation worsening, the possibility of a snap election this year is increasing as the government tries to capitalize on its "perceived" role in landing the federal shipbuilding contract and boost employment by building roads and schools.
"I happen to believe that the capital budget, which is being done entirely with borrowed money, is pre-election stimulus," said Baillie.
Dexter dismisses the election speculation, saying the public gave the NDP a majority with the expectation that it would complete its full mandate.
"They (the public) know that times are difficult now and they want us to manage through this," he said.