Premier Darrell Dexter surprised the Nova Scotia legislature tonight by announcing that the province ended the fiscal year on March 31st with a $447 million surplus. The province had originally forecast a $222 million deficit, but revised that last December to a $97 million surplus. Last week, Finance Minister Graham Steele said the surplus would exceed $97 million, but gave no hint that it would actually amount to more than four times as much.
At the time, one observer noted caustically that it's hard for the government to justify raising university tuition fees and cutting funding to post-secondary education when it's running a surplus.
A government news release makes it clear the surplus will be used to pay down provincial debt rather than easing spending cuts.
The news release states: "Nova Scotia's better-than-expected performance through the economic recession and deliberate efforts to control government spending resulted in a larger-than-expected surplus," said Premier Dexter. "Rather than spend this surplus at year-end, which has been the practice of past governments, we took the view "a penny saved is a penny saved" and used the funds to reduce the provincial debt."
Meantime, on the eve of the provincial budget tomorrow, the government continues to warn that next year's deficit will be very close to the $370 million originally forecast.
Earlier this year, the government announced a $14 million dollar cut in university operating grants in the next academic year and a hike in tuition fees of three percent per year over the next three years.
The Canadian Press news agency quoted Advanced Education Minister Marilyn More: "We are expecting universities to share the struggle to adapt to the fiscal reality," said More. "We are not asking them to do anything more or less than the departments and other service deliverers."