Nova Scotia taxes have grown by $850 per capita since 2012: auditor general

HALIFAX – The amount of taxes collected from Nova Scotians has increased by about $850 per capita over the past five years — a jump of about 17 per cent since 2012, the provincial auditor general said Wednesday.

Michael Pickup’s report found a five-year trend marked by deficits and increased service and debt costs, bringing a rise in the amount of taxes collected by the province.

“Over the last five years you’ve got revenue going up, you’ve got expenses going up, you’ve got debt going up,” said Pickup. “So that would suggest that the way additional expenses are being paid for is through increased taxes and increased borrowing — both.”

Pickup noted that as the population ages, the amount being spent by the province on each person is also going up. The report says expenses per capita are about $4,755 per person during the current year, an increase of about $500 since 2012.

The report says more than half of government expenses come from the departments of Health and Education, where spending increased by more than 20 per cent over the five-year period.

The province’s net debt also rose by 13 per cent over that time to $15.1 billion, while the long-term debt also increased by 6.7 per cent to stand at $14,300 per person as of March 31.

Pickup said the province’s deficit of $11 million for 2015-16 was the lowest in five years.

When asked, Pickup wouldn’t offer an opinion on whether it was healthy for the province to continually have higher expenses, debt and revenue. But he said governments have three options if expenses continue to rise without additional revenue.

“You get revenues (taxes) growing, or you lower expenses, or you do a combination of more revenue and lowered expenses,” he said. “There is really no other choice.”

Pickup’s report also included audits of two new government organizations, the Nova Scotia Health Authority and Tourism Nova Scotia.

The auditor general gave the newly amalgamated $2 billion health authority a clean audit opinion for its first year, but he questioned why $7 million in restricted funds were borrowed for operations even though the Health Department owed the authority over $70 million. He noted that the funds were paid back.

The report was also critical of Tourism Nova Scotia, a Crown corporation created on April 1, 2015, for not completing its own audited financial statements by the June 30 deadline.

Pickup said the management board advised him the audit would be ready later this fall.

He deflected a question on whether he felt the tourism corporation required an audit by his office for failing to meet a financial legal requirement.

“You don’t need an audit to know that you should meet the deadline,” Pickup said. “For that I would say that they need to get their house in order.”

The report also noted improvements in the management and disclosure of travel and hospitality expenses by government departments, but said there was still a lack of disclosure around such expenses at agencies, boards and commissions.

“There is no doubt in my mind that those types of expenditures should be disclosed . . . in a timely fashion and an easily accessible way,” Pickup said.