There is growing evidence Nova Scotia’s economy has stalled and could begin rolling backwards in the months ahead.
The most disturbing sign came last week when Finance Minister Maureen MacDonald confirmed the province’s revenue projections for personal income tax were about $61 million lower than first forecast.
“What it reflects is that Nova Scotia’s economy has been pretty soft and in particular we’ve seen a number of job losses in terms of full-time employment,” said economist and president of the Atlantic Provinces Economic Council, Elizabeth Beale. “The ones we are all thinking about are the forestry (jobs).”
The Progressive Conservatives say the numbers show the New Democrats are having a tough time creating jobs.
“We’re losing jobs at a phenomenal rate,” said MLA, finance critic Eddie Orrell. “Business is shutting down and our economy is dealing with more part-time jobs than it is full-time jobs. Statistics Canada quotes us as losing 4,400 full-time jobs in the three years this government has been in power.”
Beale the province should also be concerned by Ottawa’s plans to trim the public service because Nova Scotia has a disproportionate share of federal workers, including military personnel.
Premier Darrell Dexter said economic prosperity is “just around the corner” with thousands of people needed to build new combat ships and an electric transmission line between Nova Scotia and Newfoundland.
“We do have a good platform for economic growth,” said Beale. “We do have these large projects on our horizon, whether they are here in Nova Scotia or whether we are able to take advantage of some of the opportunities in Newfoundland and Labrador over the longer run.”
However, Finance Minister Maureen MacDonald has confirmed the province’s projected deficit is expected to grow by $66 million to $227 million.
MacDonald said the province’s economic recovery continues to be “sluggish.”
This comes on the heels of Prime Minister Stephen Harper warning Canadian household debt is at an all-time high.
Roger Haineault with Tax Filers says the high debt coupled with employment situations, housing prices and interest rates may lead to people not borrowing and not spending.
“Spending effectively drives the economy,” Haineault told Maritime Morning, Sunday. “Every time you go out and you shop, you buy a new TV, or whatever it is that you get, those are dollars being pumped into the economy.”
Haineault said the interest rate will not go up because of this tenuous situation because it could lead to foreclosure situations.