The province is projecting a slightly smaller deficit than expected ‘ again.
Finance Minister Graham Steele said Tuesday that, based on current projections, he expects to table a $260.8-million deficit in the first week of April.
That’s down from the $389.6 million projected when he tabled the 2011-12 budget last spring ‘ a difference of $128.8 million.
“We continue to be on track,” Steele told reporters. “To get this province back to balance, we have continued to exercise restraint and good fiscal management … (and) are on a smooth path to balancing the books in 2013, as planned.”
Documents provided by the Finance Department show departmental spending is $72 million under budget. Debt-servicing costs ‘ driven by favourable interest rates ‘ accounted for $47 million in savings. That offsets a $56.6-million drop in provincial revenue, primarily due to previous year adjustments and a decrease in corporate and sales taxes versus 2011-12 projections.
Steele told the Halifax Chamber of Commerce earlier in the day that it can expect a “modest, but real” cut in personal income tax and the elimination of the large corporate capital tax. He also promised no significant new revenue measures and more support for the poor and disabled.
Steele did not go into specifics with reporters. But when asked why the province was reducing income tax rather than, say, the harmonized sales tax, Steele said the measures were much more modest in nature.
“The HST is $175 million per point. That is simply too much,” he said.
“When we get to balance, the next question is how do we get to sustainable surplus, and once we get to surplus we can have those really good conversations … but we’re not there yet.”
Steele noted it is the third year in a row government departments have come in under budget, a fact opposition critics say has more to do with inflated budget projections than spending restraint.