N.S. budget mostly on track, but uncertainty looms

Nova Scotia's budget is mostly on track at this point in the year, but major challenges are looming and Finance Minister Allan MacMaster warns restraint could be part of the equation.

"Are we considering any restraint measures? All the time," MacMaster told reporters in Halifax during the first fiscal update for the 2022-23 budget.

Thursday's numbers show the deficit has increased by $48 million since the budget was tabled and passed last spring, clocking in now at $554.2 million. Total revenue is projected to be $12.7 billion, up $71.8 million from budget day. Expenses are up by $110.8 million, due mainly to increased department spending of $97.1 million.

MacMaster said the lack of surprises in Thursday's update reflects a normalizing of the provincial finances as the COVID-19 pandemic causes less havoc in the numbers.

That's not to say the numbers are without pressures outside the government's control. Inflation and Russia's invasion of Ukraine continue to cause supply chain issues and drive up costs. That, combined with labour shortages, have resulted in the delay of some projects and increased prices for others.

"We know we're going to have to pay more if we want to complete projects, but I know that in the case of health, it is a significant focus for our government to fix the health-care system," said MacMaster.

The minister said his government's main investments will be in health care, education and roads.

Much of the increased department spending was related to COVID-19 measures, including the provincial testing strategy and rapid tests.

The Seniors and Long-Term Care Department spent an additional $31 million, mostly on travel nurses who came to the province to boost staffing resources, and programming to help people stay in their homes.

There was also an increase of $16.4 million at the Communities, Culture, Tourism and Heritage Department to beef up the province's incentive fund for film and television production in Nova Scotia.

Thursday's numbers do not include figures related to the cleanup costs for post-tropical storm Fiona. MacMaster said it's too soon to have an accurate sense of the cost and better information should be ready for the next fiscal update in December.

Fiona is not the only major question mark for MacMaster and officials in the Finance Department.

The two most significant infrastructure projects in the province — the redevelopment of the Halifax Infirmary and Cape Breton Regional Hospital — are likely to be major drivers of increased costs.

Work is ongoing at the Cape Breton Regional, while the final financial submission from the lone consortium bidding on the Halifax Infirmary project is due next month. It's estimated the infirmary work could top $3 billion.