An accounting error in last April’s budget forecast underreported Nova Scotia’s 2009-10 deficit by almost $88 million, Finance Minister Graham Steele revealed yesterday.
According to senior officials within the finance department, the error was the result of misunderstanding Nova Scotia’s share of personal income tax — a national pool collected and distributed by Ottawa.
In April, Steele attributed a $155 million increase in income tax revenues to a stronger-than-expected recovery from the recession. Yesterday, he clarified a majority of that increase was due to the error.
“As a result, revenue was overstated and the deficit has been revised to $330 million (from $242 million),” he said, adding that since discovering the error, the department has taken steps to improve internal checks and balances.
According to Steele, the error will have no effect on Nova Scotia taxpayers.
“It could have made a difference if we had said … ‘OK, we’re ahead of budget, let’s treat that as extra spending money,’” he said.
“But … our approach has been a penny saved is a penny saved,” he added, quoting his oft-repeated mantra on spending restraint.
While it would seem natural for opposition members to pounce on such an error, both finance critics were forgiving on the issue.
“It adds obviously to the debt of the province, but businesses make mistakes in their accounting,” said Liberal MLA Leo Glavine. “Human error is a reality … but I don’t read anything into that there was something sinister around that $87 million.”