N.S. Liberals bring in broad middle class tax cut in pre-election budget

Nova Scotia Liberal budget offers tax cuts

HALIFAX — Nova Scotia’s Liberal government has promised an average $160 tax cut for half the province’s population, in a surplus budget that seeds the ground for an election campaign that may begin within days.

Premier Stephen McNeil touted the move as proof his restraint of public sector wages over the past year has permitted him to shift money back into taxpayers’ pockets, even as he books a $26-million surplus in this year’s $10.5-billion budget.

“This is the way through the tax structure to leave more money in the pockets of Nova Scotians who require it the most,” he said Thursday after the budget was tabled.

The pledge would reduce taxes for 500,000 low and middle-income earners by increasing the basic personal exemption by up to $3,000 for taxable income up to $75,000.

The change is weighted towards lower income Nova Scotians, and will also mean 60,000 poorer Nova Scotians will no longer pay provincial income taxes after the program kicks in Jan. 1, 2018. 

But the opposition swiftly pointed out all this amounts to a set of election campaign promises which may or may not come true, as an election call may come as early as this weekend.

And Tory Leader Jamie Baillie said a deluge of almost $130 million in spending in recent months has shown the government lacks a clear plan for the province’s beleaguered health care system.

Over the past two years, stagnant funding and delayed spending on health facilities has accompanied stories of bursting hospital pipes, shortages of family doctors and — over the past winter — a dying patient left to languish for over six hours in the hallway of an overcrowded emergency department.

“In year 4 (of the McNeil government) … we all know about the crumbling state of our health system and still we’re looking for where they want to go,” said Baillie.

“Perhaps that’s what the election is about, which is who has vision for where to take health care.”

The health budget is projected to rise almost two per cent, to about $4.2 billion — or about four of every 10 dollars spent by the province as its population continues to be among the country’s oldest.

The increases include a bump in funding for the education of family doctors, with money for 10 new residency places at Dalhousie University’s medical school.

The province will also spend about $6 million for new collaborative care centres â€” an already announced measure that comes as the Liberals have conceded they’ve failed in an election promise to provide each citizen with access to a family doctor.

However, figures released for the 2016-17 budget show the province has for several years spent less than planned to upgrade aging hospitals.

The Health Department for the past year was $26 million below budget, as it delayed spending on facility improvements and spent $6.6 million less than expected on home care. 

NDP Leader Gary Burrill said the hospitals are now operating beyond their capacity, and yet the province isn’t making investments to help transfer elderly patients into nursing homes.

“From the point of view of the need for this major investment, this budget stands up as a failure,” he said.

However, Finance Minister Randy Delorey emphasized the Liberals’ record of back-to-back surpluses â€” a phrase that will likely evolve into a core part of the party’s election message.

He said the province will impose or negotiate wage packages that limit the 2017-18 increase to one per cent, having set that pattern in a fractious labour dispute this winter with the teachers’ union.

“It’s an affordable and fair wage package that has allowed us to move forward,” he said during a news conference.

Meanwhile, officials estimate the cost for the middle class tax cut in the 2017-18 budget will be $22 million, due to it only beginning on Jan. 1. The annual cost to the treasury will be $85 million. 

In addition, a previously announced tax cut on small business income will cost about $14 million a year.

There is also a wide array of small spending increases, many of them previously released to the public, including $38 million for affordable housing in partnership with Ottawa.

The province is also offering $5.1-million more for home care and $3.2 million for nursing home food and recreation budgets, a measure that comes after a period of cutting the operating budget to long-term care. 

There is $3.7 million to add 30 new sites with early learning programs for about 750 four-year olds, an expansion from the existing eight sites — with about 25 to 30 children at each site.

The Education Department will also spend $1.1 million to expand breakfast programming to schools.

Liette Doucet, the president of the Nova Scotia Teachers Union, said it is hard to trust the Liberals’ promises after a bitter labour dispute where the province legislated the 9,300 educators back to work.

“They (taxpayers) are getting a tax cut on the backs of students and teachers,” she said.

The province’s net debt is about $15 billion, which is $15,900 per person as of April 1 last year.

The province is projecting a series of surpluses extending into 2020-21, with the goal of reducing debt to 30 per cent of gross domestic product by 2024.  

Keith Doucette and Michael Tutton, The Canadian Press