Nova Scotia's first NDP government faces lean times as it kicks off session

HALIFAX, N.S. - Nova Scotia's first NDP government will open itsinaugural session of the legislature Thursday with a throne speech thatwill be watched for the course it charts through economic turmoil whilelaying the foundation for a balanced budget next year.

HALIFAX, N.S. - Nova Scotia's first NDP government will open its inaugural session of the legislature Thursday with a throne speech that will be watched for the course it charts through economic turmoil while laying the foundation for a balanced budget next year.

Premier Darrell Dexter, who leads the province's first majority government in six years, is promising a "fairly aggressive legislative agenda." But he acknowledges the challenges the tough economy poses to his government, which is saddled with a $590-million deficit.

"I don't think there's any doubt in anyone's mind that we're in a very difficult economic position," Dexter said in an interview.

"There simply are rough times and we've got to navigate the best route we can through these difficulties."

Dexter said his government intended to get right to work with the presentation of a provincial budget next week that will largely mirror one that the province's former Tory government failed to get passed in May.

Dexter's hallmark in opposition and during the first three months of his new government has been to proceed in a cautious and methodical manner.

The government already has laid the ground for the tabling of this year's budget by indicating earlier this week that it is facing a whopping $590-million deficit. The NDP's plans may be hindered by the poor state of the province's finances, but Dexter is sticking to broad generalities ahead of the throne speech.

Dexter said there will be initiatives put forward on everything from energy to the green economy, but cautioned that the overriding concern will be asserting control of the province's finances.

The government has promised to balance the budget in 2010-11, a commitment that one expert says the NDP should abandon.

Finance Minister Graham Steele blamed the previous Conservative government earlier this week for the ballooning deficit, saying it overestimated revenues from offshore gas royalties and underestimated the costs of covering health concerns such as swine flu.

He said changes are coming to the massive budget for health care, but declined to elaborate on whether cuts are in store.

Steele also revealed that the budget would not be "substantially different" from the one tabled by the Tories in May with the exception of a decision to include $341 million in funding for universities earmarked for next spring, on this year's books.

That move has drawn the ire of the Opposition Liberals.

"They are essentially cooking the books, making this deficit look worse than it is by making the advance payment to post-secondary education to soften the blow for next year," said Liberal Leader Stephen McNeil.

McNeil accused the NDP of playing the same shell game they had criticize while in Opposition and said the Liberals would push for more openness and accountability around finances during the upcoming legislative session.

He said the government should state whether it will implement tax hikes or program cuts to balance the budget.

McNeil doesn't expect that will happen in the legislature.

"We'll get an indication following this session as they move in preparation for the next budget," said McNeil. "The labour contracts that are out there now that have to be negotiated, that's where we'll begin to see whether or not they will begin to back away from that commitment to balance the books."

The key to keeping the commitment could rest on the recommendations of a four-member panel of economic experts who are expected to report to the government at the end of October.

One panel member, Donald Savoie of the University of Moncton, has already warned that the economy could be hurt by balancing the budget too soon.

So far, Dexter has said he wants to hear all of the information from the final report and remains committed to the "operating principle" of a balanced budget next year.

 
 
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