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Bill Black: The Nova Scotia budget is not taking us to a good place

The provincial budget was introduced Feb. 23 with a barrage of explanatory material.

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Governments provide a complex range of services, most of which require a lot of infrastructure: schools, hospitals and seniors housing, for example.

In the introduction to Finance Minister John Lohr’s speech, he criticized the Stephen McNeil government’s focus on reducing financial deficits and improving fiscal balance sheets. Lohr argued that they should have been overspending to improve services.

A simple projection of the province’s prospects today tells a discouraging story. (The difference between the two lines in the graph is due to an accounting change.)

Net debt is the total owed to lenders, reduced by financial assets. Gross domestic product (GDP) is a measure of economic activity in the province. Increases in GDP will increase the taxes the province will collect.

The goal for that ratio is to have it flat or decreasing. The current chart shows a 43 per cent increase in the ratio by 2030. That means the cost of servicing the debt is growing much faster than the growth in the economy. The outcome will be worse if debt rating agencies downgrade their estimate of the province’s ability to service the debt.

The 2025-26 budget was a big change from the previous four years, each of which........

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