The Nova Scotia Legislature (via Facebook)

The Nova Scotia provincial government is forecasting a deficit of more than $400 million for the 2023-24 fiscal year.

At the latest forecast update, Finance and Treasury Board Minister Allan MacMaster revealed that the projected deficit has increased by $123.8 million compared to their prediction of $278.9 million from back in March. The total forecasted deficit now sits at $402.7 million.

According to MacMaster, the increased deficit is due in part to increased spending on disaster response and relief efforts, following this summer’s wildfires and floods.

“Final costs will be known when response efforts are complete. But as of this forecast, the cost represents one quarter of increased spending,” said MacMaster.

Total revenue for this year is projected at $14.6 billion, including $232.3 million in new revenue and a $178.7 million accounting adjustment in net income, for an overall revenue increase of $411 million compared to last year.

Expenses are projected to be $15.2 billion, up $363 million from the budget estimate. On top of costs associated with the disasters, officials say the increase in expenditures is also due to additional investments in healthcare, keeping nursing home and hospital beds open, and settled workforce contracts related to new contracts that had to be renegotiated with several unions.

Despite the deficit, MacMaster seems optimistic that the province’s revenue will continue to grow the next forecast update, in December.

“If we look at the economy that we’ve been seeing over the last number of months, we see signs of it softening, but it’s still been strong. And the Bank of Canada is still looking at raising interest rates. So, I think that’s a sign that the economy has been stronger than expected, and our revenues may reflect that,” said MacMaster.