We’re still broke, but we’re a little less broke.

A fiscal update yesterday revealed this year’s projected provincial deficit has shrunk by $67 million since September.

That said, the deficit is still $525-million and we’ll likely be adding more than a billion dollars to the debt.


On the positive side, new federal data has been very kind to Nova Scotia as it now expects an extra $50 million in income tax.

On the negative side, unemployment is growing faster than predicted and could jump to 9.1 per cent by the end of the year. Another problem for the government is some departments spending over budget.

Department expenses are up $15.6 million in total. About half of that can be recouped from federal sources, but there’s still a $7.8-million shortfall. Health care wages, law court backups, increased highway work and bad debts are among the factors driving up costs.

Finance Minister Graham Steele said his department will be taking a hard line on the issue and he expects departments to be back in the black by the end of the fiscal year.

“We’ve said to (the departments), wait a minute now, we’re not just going to accept that without further explanation. Unless there’s a very good explanation forthcoming, we expect you to find that money somewhere else,” Steele told reporters.

“I think it’s important to send a message to the civil service -- if you’re going to go over your budget, there’s got to be a good explanation.”

The books were buoyed by gas tax revenue from increased driving ($3.1 million), petroleum royalties ($2.3 million), vehicle registration fees ($3.6 million) and a large increase in tobacco tax ($12.4 million).

The province’s gross domestic product is still expected to grow this year, but by only 0.2 per cent rather than the budget estimate of 0.3 per cent.

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