Cut personal income taxes, provide relief for struggling Nova Scotians, Liberal MLA tells government

Nova Scotians paid more than $4 billion in personal income tax last year and a Liberal MLA wants to know why some of that money couldn’t be returned to residents who are finding it difficult to cope with the rising cost of living.

“This isn’t about if there is money or if there isn’t money, this is about priorities of government,” Brendan Maguire, the Liberal MLA for Halifax Atlantic, told provincial officials with the Finance Department and Treasury Board at a legislative Public Accounts Committee meeting Wednesday.

“We are seeing money going out the door at a historical rate,” Maguire said of government spending.

“Most Nova Scotians are in more financial peril than they’ve ever been in their entire lives.”

Geoff Gatien, associate deputy minister of the Finance Department, said it brought in $4.06 billion in personal income taxes in the 2022-23 fiscal year, up from $3.3 billion the year before. That computes to a year-over-year increase of $700 million, or about 20 per cent.

“It’s probably the highest (increase) we’ve ever had,” Gatien said.

Maguire said the government is pulling $4 billion out of the pockets of people “who can’t afford to pay their rent, can’t afford to pay their mortgages,” while reporting a $115.7-million surplus in the fiscal year.

“Has there ever been a conversation to give something back to taxpayers, some kind of relief . . . to eliminate bracket creep or to lower taxes and put money back into the pockets of Nova Scotians.”

Kelliann Dean, deputy minister of the Finance Department, responded that “with respect to looking at tax brackets, looking at other means for providing assistance for Nova Scotians, we are constantly looking at ways that we can utilize revenues to make life better for Nova Scotians.”

The deputy minister said investments made to date “have been very targeted,” pointing to rent supplements and energy efficiencies to relieve fuel costs.

After the meeting, Dean told reporters that any determination about tax cuts would have to be made during budget preparations in the context of anticipated revenues and expenses for the fiscal year covered in budget forecasts.

“We’re still projecting deficits and in an era of projecting deficits . . . it would be difficult to make tax cuts of that magnitude,” Dean said. “It might mean making other choices.”

Those choices would be to cut elsewhere or not make planned investments, she said.

“Those are conversations that we will have to have as we approach next year’s budget.”

The other prominent public accounting issue raised at the meeting came from the recent report from auditor general Kim Adair, who took the government to task for budget overspending that hit an all-time high of $1.7 billion in 2022-23, meaning more than 10 per cent of the entire budget was spent on additional department appropriations that were not debated or passed through the legislature.

The auditor general said the accumulated total of budget overspending is now $6.1 billion over the last 10 years, the bulk of which has come in the past two years under the Progressive Conservative government.

Adair said she is the third provincial auditor general who has flagged the issue and that the overspending defeats the purpose of preparing and presenting a budget.

The auditor general acknowledged in her report that the additional appropriations practice is consistent with the Finance Act, which does not require House of Assembly approval for budget overspending, unlike other jurisdictions.

Adair recommended that the finance minister amend the act to align the additional appropriations process with legislated practices elsewhere in Canada and provide accountability and transparency for government spending.

The minister responded that he is satisfied that the current parameters of the Finance Act ensure accountability and transparency over the spending of all public funds.

New Democratic MLAs Susan LeBlanc and Gary Burrill asked meeting witnesses Wednesday if there would be any downside to handling additional department spending in the same way as other Canadian governments and what justification the government has for doing things differently when it comes to tracking spending.

Gatien said that previous auditor generals referenced department overspending but did not recommend legislative changes and he reiterated that the Nova Scotia practice falls within the Finance Act requirements.

He said approval for additional appropriations comes through an order in council (cabinet approval), followed by technical briefings with media in which opposition members are invited to attend, and a fact sheet posted publicly.

The order is then tabled in the House, if it is sitting, and with the clerk if the House is adjourned.

“I certainly feel that it is appropriate, that is what our legislation lays out for us,” Gatien said. 

“Professionally, I feel that that’s appropriate. I’m not here to tell you the auditor general’s opinion is wrong but I can tell you what I am professionally comfortable with is how our act is designed and how we execute it.”

After the meeting, Dean said the provincial legislature “has determined that this is the process that we need to follow for the budget and for financial disclosure and that includes additional appropriations, so that is what is Nova Scotia’s context.”

Dean said that in some other provinces, the additional appropriation approvals come in after the fact.

“We have approval of Governor in Council (cabinet) of additional appropriations before we go into the legislature,” Dean said. 

“That’s a nuance. I don’t see that as being an outlier, I see that as responding to what our legislation says.”

Adair, in attendance for the meeting, said afterward that “Nova Scotia has a serious weakness, considering the fact that billions of spending can occur without debate in the legislature.”

The auditor general said that whether it happens before or after the spending is given initial approval, that spending is debated in the legislature in all other Canadian jurisdictions, including the federal government.

“We have a great working relationship with Finance and Treasury Board and there are going to be times when we agree to disagree and this is obviously one of them,” Adair said.

“They have explained they are following the act and that is the case, however, from my perspective, I think it’s a serious weakness for the Nova Scotia taxpayer.”

Leblanc said after the meeting that the responses from Dean and Gatien didn’t assuage her concern that taxpayers’ money is being spent without transparency and legislative oversight.

“This government is not good with transparency,” she said. 

“This is $1.7 billion that is going out the door without any scrutiny by the legislature.