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What you need to know about COVID-19: August 7, 2020
First, let’s state the obvious.
Moving into the fourth year of their mandate and facing speculation on an early election call — either this spring or next fall — the Liberals on Tuesday unveiled a budget they’d surely be comfortable taking on the campaign trail.
Despite the forecast of a slowing economy, Finance Minister Karen Casey is projecting her government will deliver its fifth straight balanced budget in 2020-21, with a $55-million surplus and revenue of $11.6 billion. At the same time, the Liberals will hike spending to help alleviate poverty, retain more doctors and complete the provincewide rollout of pre-primary education, while also cutting corporate and small-business taxes.
After last year’s news that the child poverty rate in Nova Scotia was the highest in Canada, it’s good to see Stephen McNeil’s government will increase — to $34,000 — the low-income threshold for families to qualify for the provincial child benefit. That change, which will cost the government $18 million, is expected to help 49,000 children in 28,000 families.
Other measures aimed at helping those in need in the province included more funds to address homelessness, rent supports and transitioning people in care from larger facilities into the community.
Health, as always, has the largest budget, at $4.8 billion, about 41.5 per cent of all provincial spending. That includes more than $70 million from last fall’s announced new master agreement with Doctors Nova Scotia. Taxes on tobacco and vaping products are on the way up; taxes on businesses are going down; both are welcome trends.
However, there’s at least one big question mark casting a shadow over the budget’s projections.
When this budget’s economic assumptions were set early in November, global trade uncertainties — especially regarding U.S.-China trade — contributed to projected real GDP growth of just 0.4 per cent for Nova Scotia in 2020. Provincial finance officials also factored in the December announcement of Northern Pulp’s closing.
Since then, the Covid-19 coronavirus worldwide health crisis has dominated the news, affected markets and slowed global trade. At this time, the full impact of the economic fallout this year — and possibly beyond — is simply unknowable.
The budget forecasts a rising net debt, to $17.2 billion by 2023-24, over the next four years, thanks to increased capital spending — for schools, highways and hospitals — that must be paid for with borrowed funds.
The Liberals are also forecasting balanced budgets for the next three years, thanks in part to lower interest rates on new loans as they retire older, more expensive debt obligations.
So the government is trying to do a little bit of everything, with something for almost everyone. You could conclude that they're trying to do a lot in an uncertain economic climate.
But it's good to see at least a few benefits emerging from years of belt-tightening.