CALGARY, Alberta (Reuters) - Nova Scotia will have a smaller C$222.1 million ($222.1 million) budget shortfall for the 2010-11 fiscal year, the government of the East Coast Canadian province said on Tuesday, adding that it expects a balanced budget in four years.
The latest budget shortfall is on top of the C$488 million deficit the government reported for the 2009-10 fiscal year. But that figure was down from the C$592 million deficit the left-leaning New Democratic Party government originally forecast.
In its budget for the current fiscal year, the government of Premier Darrell Dexter forecast revenues of C$8.7 billion, up 3.9 percent from 2009-10, and expenses of C$9 billion, a drop of C$49.7 million.
The province said much of the budget shortfall is a result of reduced federal government transfers to the province. However, its take from income, sales and tobacco taxes boosted revenue.
Still, the province said its annual deficits could rise to as much as C$1.4 billion unless it takes steps to live within its means. To return to budget balance, the government said it will freeze the salaries of elected officials, introduce wage increase targets of 1 percent for its workers, and look for savings on program spending.
"Our approach will be smart, strategic and steady," Graham Steele, the provincial finance minister, said in the text of his budget speech. "It will ensure that government lives within its means and focuses on the programs and services important to Nova Scotians."
The province said it expects to keep spending on expenses flat for the next four fiscal years, down from annual spending increases of 5 percent or more in recent years.
$1=$1 Canadian Reporting by Scott Haggett; editing by Peter Galloway