Monday, December 14, 2009
N.S. economic forecast predicts higher unemployment
Yearly average expected to be 9.1%
Posted by Bruce Wark on Mon, Dec 14, 2009 at 3:59 PM
- Graham Steele
NDP finance minister, Graham Steele says more people will be unemployed in Nova Scotia in the coming year than originally forecast. In his September budget, Steele predicted the provincial unemployment rate would average eight percent in 2009/10, but in his budget update released today, the finance minister revised that figure upward to 9.1 percent.
"Obviously, that's not a number we'd like to see go up," Steele told reporters. He added however, that the unemployment rate is rising because more people are coming back into the labour force. That means, he explained, that the size of the labour force is increasing faster than the number of jobs available.
Figures from the finance department show that last month, Nova Scotia's unemployment rate ranged from a low of 6.4 percent in Metro Halifax to a high of 13.7 percent in Cape Breton. From January to November, the number of unemployed in Nova Scotia rose from 37,700 to 45,800. That's an increase of 21.3 percent over the same period last year.
Today's update predicted a slightly lower budget deficit than forecast in September. The new deficit figure is $525.2 million. That's $66.9 million less than predicted thanks mainly to $50.4 million in increased revenues from personal income taxes and $12.4 million more in tobacco tax revenues. The tobacco revenues were up because of an unexpected boost in sales of legal tobacco products.
"It certainly surprised everyone," Steele said, "after a budget that increased tobacco taxes." He added, however, that it doesn't necessarily mean that Nova Scotians are smoking more. "It could be related to a decrease in the availability of illegal tobacco products."
Finally, Steele told reporters, the province hasn't decided yet whether to increase the HST as recommended recently by an Economic Advisory Panel. The panel called for a two percent sales tax hike, a move that would raise provincial revenues by $350 million a year. Steele said Nova Scotians would have to wait for his budget this spring to find out about any tax hikes. He said the earliest the province could raise the HST would be July 1, 2010.
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