EX-99.1
Exhibit 1
Province of Nova Scotia
(Canada)
This description of the Province of Nova
Scotia is dated as of March 11, 2009 and
appears as Exhibit (1) to the Province of
Nova Scotia’s Annual Report on Form 18-K
to the U.S. Securities and Exchange
Commission for the fiscal year ended
March 31, 2008.
This document (otherwise than as a prospectus contained in a registration statement filed
under the Securities Act of 1933) does not constitute an offer to sell- or the solicitation of an
offer to buy any Securities of the Province of Nova Scotia. The delivery of this document at any
time does not imply that the information herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
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Page |
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Further Information |
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2 |
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Forward-Looking Statements |
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3 |
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Summary |
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4 |
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Map of Nova Scotia |
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5 |
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Introduction |
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Overview |
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6 |
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Political System |
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6 |
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Constitutional Framework |
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7 |
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General Issues |
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8 |
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Economy |
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Principal Economic Indicators |
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10 |
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Recent Developments |
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12 |
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Economic Structure |
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13 |
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Population and Labor Force |
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14 |
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Income and Prices |
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16 |
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Capital Expenditures |
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17 |
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Goods Producing Industries |
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19 |
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Exports |
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23 |
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Service Sector |
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25 |
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Energy |
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26 |
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Government Finance |
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Overview |
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29 |
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Specific Accounting Policies |
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29 |
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Accounting Changes |
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31 |
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Summary of Budget Transactions and Borrowing Requirements |
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34 |
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Revenue |
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36 |
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Program Expenditures/Expenses |
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41 |
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Loans and Investments |
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44 |
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Provincial Debt |
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Funded Debt |
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47 |
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Derivative Financial Instruments |
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48 |
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Debt Maturities and Sinking Funds |
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50 |
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Current Liabilities |
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52 |
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Guaranteed Debt |
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52 |
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Pension Funds |
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53 |
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Public Sector Debt |
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Public Sector Funded Debt |
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58 |
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Certain Crown Corporations and Agencies |
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Sydney Steel Corporation |
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59 |
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Sydney Tar Ponds Agency |
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59 |
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Nova Scotia Resources Limited |
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60 |
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Nova Scotia Municipal Finance Corporation |
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60 |
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Nova Scotia Power Finance Corporation |
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60 |
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Foreign Exchange |
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62 |
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Official Statements |
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Table 1 — Statement of Debentures Outstanding |
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64 |
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FURTHER INFORMATION
This document appears as an exhibit to the Province of Nova Scotia’s Annual Report to the U.S.
Securities and Exchange Commission (“SEC”) on the Form 18-K for the fiscal year ended March 31,
2008. Additional information with respect to the Province of Nova Scotia is available in such
Annual Report, the other exhibits to such Annual Report, and in amendments thereto. Such Annual
Report, exhibits and amendments can be inspected and copied at the public reference facility
maintained by the SEC at: Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549. Copies of
such documents may also be obtained at prescribed rates from the Public Reference Section of the
Commission at its Washington address or, without charge, from Province of Nova Scotia, Department
of Finance, Deputy Minister of Finance, PO Box 187, 7th Floor, 1723 Hollis Street,
Halifax, Nova Scotia, Canada, B3J 2N3.
The SEC maintains an Internet site that contains reports, statements and other information
regarding issuers that file electronically with the SEC. The address for the SEC’s Internet site
is http://www.sec.gov.
In this document, unless otherwise specified or the context otherwise requires, all dollar
amounts are expressed in Canadian dollars. On March 11, 2009 the closing spot rate for the U.S.
dollar in Canada, as reported by
2
the Bank of Canada, expressed in Canadian dollars, was $1.2862 See
“Foreign Exchange” for information regarding the rates of conversion of U.S. dollars and other
foreign currencies into Canadian dollars. The fiscal year of the Province of Nova Scotia ends March
31. “Fiscal 2008” and “2007-2008” refers to the fiscal year ending March 31, 2008, and unless
otherwise indicated, “2007” means the calendar year ended December 31, 2007. Other fiscal and
calendar years are referred to in a corresponding manner. Any discrepancies between the amounts
listed and their totals in the tables set forth in this document are due to rounding.
FORWARD-LOOKING STATEMENTS
This exhibit includes forward-looking statements. The Province of Nova Scotia has based these
forward-looking statements on its current expectations and projections about future events. These
forward-looking statements are subject to risks, uncertainties, and assumptions about the Province
of Nova Scotia, including, among other things:
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the Province of Nova Scotia’s economic and political trends; and |
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the Province of Nova Scotia’s ability to control expenses and maintain
revenues. |
In light of these risks, uncertainties and assumptions, the forward-looking events discussed in
this annual report might not occur.
3
SUMMARY
The
information below is qualified in its entirety by the detailed information provided elsewhere in this document.
PROVINCE OF NOVA SCOTIA
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Economy |
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Year Ended December 31 |
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2003 |
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2004 |
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2005 |
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2006 |
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2007 |
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(in millions unless otherwise indicated) |
Gross Domestic Product at Market Prices |
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$ |
28,851 |
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$ |
29,853 |
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$ |
31,275 |
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$ |
31,737 |
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$ |
33,010 |
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Personal Income |
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24,437 |
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25,394 |
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26,625 |
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27,612 |
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28,917 |
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Capital Expenditures |
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5,654.1 |
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5,696.9 |
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6,004.9 |
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6,337.4 |
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6,229.1 |
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Annual Increase in Consumer Price Index |
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3.4 |
% |
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1.8 |
% |
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2.8 |
% |
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2.0 |
% |
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1.9 |
% |
Population by July 1 (in thousands) |
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936.5 |
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938.0 |
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936.0 |
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935.1 |
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934.1 |
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Unemployment Rate |
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9.1 |
% |
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8.8 |
% |
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8.4 |
% |
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7.9 |
% |
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8.0 |
% |
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Revenues and Expenses — Consolidated Entity |
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Fiscal Year Ended March 31 |
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Restated |
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Restated |
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Restated |
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2004(1)(4) |
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2005(2) |
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2006(3) |
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2007 |
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2008 |
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(in millions) |
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Revenues |
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$ |
6,056.4 |
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$ |
6,998.3 |
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$ |
7,527.5 |
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$ |
7,952.4 |
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$ |
8,908.4 |
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Current Expenses |
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6,360.4 |
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7,177.7 |
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7,634.1 |
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8,110.6 |
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8,833.6 |
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Surplus (Deficit) from Governmental Units |
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(304.0 |
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(179.4 |
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(106.6 |
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(158.2 |
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74.8 |
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Net Income from Government Business Enterprises |
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333.4 |
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349.5 |
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345.4 |
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340.6 |
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344.2 |
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Provincial Surplus / (Deficit) before Unusual Item |
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29.4 |
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170.1 |
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238.8 |
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182.4 |
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418.9 |
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Unusual Item (5) |
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8.7 |
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0.0 |
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0.0 |
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0.0 |
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0.0 |
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Provincial Surplus/(Deficit) (6) |
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$ |
38.1 |
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$ |
170.1 |
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$ |
238.8 |
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$ |
182.4 |
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$ |
418.9 |
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Public Sector Funded Debt |
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As at March 31 |
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2004 |
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2005 |
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2006 |
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2007 |
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2008 |
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(in millions unless otherwise indicated) |
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Total Provincial Funded Debt |
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$ |
13,617.2 |
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$ |
12,461.6 |
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$ |
11,404.4 |
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$ |
11,718.3 |
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$ |
11,032.7 |
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Total Guaranteed Debt |
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463.7 |
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415.9 |
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418.9 |
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409.6 |
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380.7 |
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Total Underlying Debt |
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12.7 |
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14.2 |
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18.2 |
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22.6 |
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22.5 |
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Total Public Sector Funded Debt |
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14,093.6 |
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12,891.7 |
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11,841.5 |
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12,150.5 |
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11,436.0 |
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Less: Sinking Funds, Public Debt Retirement Fund |
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2,919.8 |
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2,599.4 |
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2,094.8 |
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1,906.8 |
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2,011.9 |
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Net Public Sector Funded Debt |
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$ |
11,173.8 |
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$ |
10,292.3 |
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$ |
9,746.7 |
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$ |
10,243.7 |
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$ |
9,424.1 |
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Per Capita ($) |
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$ |
11,931.4 |
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$ |
10,972.6 |
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$ |
10,413.1 |
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$ |
10,954.7 |
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$ |
10,088.9 |
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As a Percentage of: |
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Personal Income |
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45.7 |
% |
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40.5 |
% |
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36.6 |
% |
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37.1 |
% |
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32.6 |
% |
Gross Domestic Product at Current Market Prices |
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38.7 |
% |
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34.5 |
% |
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31.2 |
% |
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32.3 |
% |
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28.6 |
% |
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(1) |
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Restated to reflect accounting changes in fiscal year 2004-2005. See “Government Finance —
Accounting Changes”. |
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(2) |
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Restated to reflect accounting changes in fiscal year 2005-2006. See “Government Finance —
Accounting Changes”. |
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(3) |
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Restated to reflect accounting changes in fiscal year 2006-2007. See “Government Finance —
Accounting Changes”. |
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(4) |
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For fiscal years 2005, 2006, 2007 and 2008, there are recoveries, fees and other charges
that were reclassified. For 2004, these amounts are netted against expenses, for 2005 to 2008 they
are included as revenue. The 2004 figures are therefore not directly comparable to the 2005 to 2008
figures. |
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Gain on sale of NSRL assets: $8.7 million in fiscal year 2003-2004. |
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As of December 19, 2008, the Province is forecasting a surplus of $212.9 million for fiscal
year 2008-09. |
4
INTRODUCTION
Overview
The Province of Nova Scotia (“Nova Scotia” or the “Province”) is the most populous of the four
Atlantic Provinces of Canada (“Atlantic Canada”) and covers 20,402 square miles. It extends 360
miles in length and varies in width from 50 miles to 105 miles.
According to estimates issued by Statistics Canada, the population of Nova Scotia was 938,310
as of July 1, 2008, and represented 2.8% of Canada’s population of 33.3 million. The largest urban
concentration in Atlantic Canada is the Halifax Regional Municipality (“Halifax”). Halifax Census
Metropolitan Area, situated centrally on the Atlantic coast of the province, had a population of
385,457 as of July 1, 2007. Halifax, the capital of Nova Scotia, is the commercial, governmental,
educational, and financial center of the province, and is also the location of an important naval
base.
Political System
The Legislature of Nova Scotia consists of the Lieutenant Governor and the Nova Scotia House
of Assembly. The Nova Scotia House of Assembly is elected by the people for a term not to exceed
five years. It may be dissolved at any time by the Lieutenant Governor on the advice of the Premier
of the Province, who is traditionally the leader of the majority party in the Nova Scotia House of
Assembly.
The last Provincial general election was held on June 13, 2006. The Progressive Conservative
Party was elected to a minority government and holds 22 seats in the House of Assembly. The
official opposition in the House of Assembly is the New Democratic Party with 20 seats. The Liberal
party holds 9 seats and there is 1 independent Progressive Conservative member.
The executive power in the Province is vested in the Governor-in-Council, comprising the
Lieutenant Governor acting on the advice of the Executive Council. The Executive Council is
responsible to the House of Assembly. The Governor General of Canada in Council appoints the
Lieutenant Governor, who is the representative of the Queen in the Province. Members of the
Executive Council are appointed by the Lieutenant Governor, normally from members of the House of
Assembly, on the nomination of the Premier.
The Parliament of Canada is composed of the Queen represented by the Governor General, the
Senate, whose members are appointed by the Governor General upon the recommendation of the Prime
Minister of Canada, and the House of Commons, whose members are elected by the people. The people
of Nova Scotia are entitled to send 11 elected representatives to the 308 member House of Commons.
Ten Senators represent Nova Scotia in the Senate.
There are five levels of courts in the province. The Nova Scotia Court of Appeal is the
general court of appeal in both civil and criminal matters. The Supreme Court of Nova Scotia is a
court of original jurisdiction and as such has jurisdiction in all cases, civil and criminal,
arising in the province except those matters or cases expressly excluded by statute. The Provincial
Court is a court of record and every judge thereof has jurisdiction throughout the province to
exercise all the power and perform all the duties conferred or imposed on a judge of the Provincial
Court. In addition to hearing matters relating to provincial statutes and municipal by-laws, the
Provincial Court is specifically authorized to hear certain matters under the Criminal Code of
Canada. The Family Court is a court of summary procedure with jurisdiction in family matters
including maintenance, child protection, child custody and family violence. The Family Court is
designated as a Youth Court for hearing matters involving young people aged 12-15 inclusive. The
Probate Court has jurisdiction and power to carry out the judicial administration of the estates of
deceased persons and to hear and determine all questions, matters and things in relation thereto
and necessary for such administration.
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Constitutional Framework
Similar to the British Constitution, the Constitution of Canada (the “Constitution”) is not
contained in a single document, but consists of a number of statutes, orders, and conventions.
Canada is a federation of ten provinces and three Federal territories, with a constitutional
division of responsibilities between the Federal and provincial governments, as set forth in The
Constitution Acts, 1867 to 1982. The Constitution Acts are divided into two fundamental documents.
The Constitution Act, 1867 (formerly the British North America Act, 1867), provides for the
federation of British North America provinces, and the Constitution Act, 1982 (the “1982 Act"),
enacted by the parliament of the United Kingdom, provides, among other things, that amendments to
the Constitution be effected in Canada according to terms of an amending formula.
The 1982 Act also includes a Charter of Rights and Freedoms, which encompasses language
rights, Aboriginal rights, principles of the reduction of regional economic disparities, and the
making of fiscal equalization payments to the provinces by the Government of Canada, including an
enumeration of other Acts and orders which are part of the Constitution.
Under the Constitution, each provincial government has exclusive jurisdiction to regulate:
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health; |
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education; |
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municipal institutions; |
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property and civil rights; |
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forestry and non-renewable natural resources; |
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social services; |
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other matters of purely provincial or local concern; |
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raise revenue through direct taxation within its territorial limits; and |
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borrow monies on the credit of the province. |
The Federal Parliament of Canada is empowered to raise revenue by any system of taxation, and
generally has jurisdiction over matters or subjects not assigned exclusively to the provincial
legislatures. It has exclusive authority over such enumerated matters as:
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the Federal public debt and property; |
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the borrowing of money on the public credit of Canada; |
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the regulation of trade and commerce; |
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currency and coinage; |
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banks and banking; |
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national defense; |
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the postal service; |
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shipping; and |
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navigation. |
As a province of Canada, Nova Scotia could be affected by political events in another
province. For instance, on September 7, 1995, the Government of Quebec presented a Bill to the
National Assembly entitled An
7
Act respecting the future of Quebec (the “Act”) that included, among others, provisions
authorizing the National Assembly to proclaim the sovereignty of Quebec. The Act was to be enacted
only following a favorable vote in a referendum. Such a referendum was held on October 30, 1995.
The results were 49.4% in favor and 50.6% against.
In 1996, the Government of Canada, by way of reference to the Supreme Court of Canada (the
“Supreme Court”), asked the court to determine the legality of a unilateral secession of the
Province of Quebec from Canada, either under the Canadian Constitution or international law. On
August 20, 1998, the Supreme Court of Canada ruled that the Province of Quebec did not have the
unilateral right of secession, and that any proposal to secede authorized by a clear majority in
response to a clear question in the referendum should be construed as a proposal to amend the
Constitution, which would require negotiations. These negotiations would have to deal with a wide
array of issues, such as the interest of the other provinces, the Federal Government, the Province
of Quebec, and the rights of all Canadians both within and outside the Province of Quebec, and
specifically, the rights of minorities, including Aboriginal peoples.
General Issues
Current Issues Concerning Native Persons
The Mi’kmaq are the First Nations peoples of Nova Scotia and are descendants of the aboriginal
people who resided in Nova Scotia prior to European contact.
In 1999, the Supreme Court of Canada delivered two decisions in the case of R. v. Marshall
that acknowledge, and at the same time, place limits upon, Mi’kmaq treaty rights to obtain a
moderate livelihood from fishing, hunting, and gathering. See “Economy — Goods Producing
Industries — Fisheries” for further details.
The Federal Court of Appeal, during the approval process for the Maritimes & Northeast
Pipeline, ruled that the National Energy Board (“NEB”) was required to ensure proper participation
of Mi’kmaq organizations in its decision-making process respecting its construction and operation.
Maritimes & Northeast Pipeline and the Mi’kmaq of Nova Scotia have settled this matter. However,
there are pending legal actions against the Province by the Mi’Kmaq respecting: a) claims to
aboriginal title to the lands on which the Maritimes & Northeast Pipeline Project is constructed;
and b) claims arising out of an alleged failure by government to consult in relation to those
lands. These actions have not proceeded beyond the preliminary pleadings stage since the actions
were initiated in 1999-2000.
In February 2007, the Mi’kmaq of Nova Scotia, the Federal Government and the Province signed a
Framework Agreement that established a long-term negotiation process to resolve issues pertaining
to Mi’kmaq treaty rights, Aboriginal rights and Aboriginal title. The Framework Agreement
identifies the issues to be negotiated, goals, procedures and a time-table for negotiations. The
first step in the negotiations will be to conduct a preliminary review of each topic and develop
the key questions and issues in more detail. This process is currently underway.
Audit of Governance and Control Framework
In fiscal year 2003-2004, the Province commissioned the firm of Deloitte Touche LLP to conduct
an independent audit of the governance and control practices within the Nova Scotia Department of
Finance. The objectives for this governance and controls assessment were to provide assurance that
the objectives, policies, and procedures are consistent with the Department’s strategic plan; that
major risks have been identified and to ensure that controls are in place to minimize risks.
The Deloitte audit found that significant deficiencies existed with respect to the governance
and control within the Nova Scotia Department of Finance. The audit concluded that actions must be
taken to correct these deficiencies. The report also stated “fundamental governance structures and
critical management controls, based on accepted practices, are not sufficiently in place to support
the prudent management of assets. Accordingly, we are unable to provide assurance with respect to
the objectives of the audit.” Further it was found that there existed within the current Debt
Management Committee a “...lack of approved policies and procedures; and lack of certain
competencies necessary to perform their delegated responsibilities.”
8
The report contained a number of recommendations pertaining to the governance and control
functions within the Department of Finance. The most significant recommendations included the
restructuring of the then existing Debt Management Committee into a governance body. This
restructuring included changes to both the role and membership of the Debt Management Committee.
The formalization of a comprehensive strategic debt management plan was also a key recommendation
of the report.
It was further found that there existed a need for an independent function within the
Department of Finance to monitor and conduct compliance reviews of Liability Management and
Treasury Services and Investment Division activities. The recommendation suggested that this
function be achieved through the creation of a “Middle Office” to oversee day-to-day control and
monitoring of financial transactions.
The Department of Finance developed action plans to respond to the report’s recommendations.
The objective was to adhere to the overall spirit of the Deloitte recommendations where they were
consistent with existing Provincial legislation. Additional research was conducted in instances
where the recommendations were not specific or were inconsistent with existing Provincial
legislation. The actions undertaken included a revamp of the Debt Management Committee (including
changes to membership, policies and procedures); revising the Investment Advisory Committee
(including changes to policies, procedures and processes). Additional policies such as the Trading
and Signing Authority Policy, Conflict of Interest Policy, Statement of Investment Policy and
Goals, and the Treasury Management Policy were approved by the Minister of Finance. A “middle
office” function, reporting to senior management, has been established in the Department of
Finance.
Litigation
Residents and former residents of Sydney and the surrounding area in Nova Scotia have
commenced a proposed class action lawsuit against the Province seeking damages for injury to health
and diminution of property resulting from the operation of the Sysco steel plant (which was
previously owned by the Provincial Government) and the claim that the Province failed to remediate
the site. The plaintiffs issued a statement of claim in March of 2004. Applications were heard and
the claim amended and further amended. An application to strike parts of the claim was heard and a
decision was rendered in June 2006 striking claims of regulatory negligence against Nova Scotia. An
appeal of the decision not to strike a claim of breach of fiduciary duty is the subject of an
application for leave to appeal to the Supreme Court of Canada and is pending. The Province is
unable to assess the likelihood of loss or estimate the amount of ultimate loss at this time.
The Province has settled the claim with Canada Life Assurance Company that was described in
the Province’s Form 18-K for the year ended March 31, 2007.
9
ECONOMY
Nova Scotia has a diversified economy. The geographic location of Nova Scotia, being
surrounded almost completely by water with more than 7,400 kilometers of coastline, has
significantly contributed to the economy. The importance of the sea to the economy is witnessed in
many industries such as fishing and aquaculture, oil and gas, naval defense, tourism,
transportation and research.
While many of the goods and services producing industries are directly or indirectly related
to the processing of Nova Scotia’s natural resources such as pulp and paper products, natural gas
and seafood products, the provincial economy is also diversified into information age technologies
and other goods as diverse as motor vehicle tires.
Exports are important to the economy of Nova Scotia as roughly 50% of all goods produced in
Nova Scotia are exported, and, of that figure, approximately 75% are exported to the United States.
Nova Scotia’s service sector is disproportionately larger than that of Canada as a whole. Much
of this is due to Nova Scotia’s geographic location, which establishes it as the hub of the four
Atlantic Provinces and therefore casts it as a natural regional service center.
Principal Economic Indicators
The economy of Nova Scotia is influenced by the economic situation of its principal trading
partners in Canada and abroad, particularly the United States. In 2007, Nova Scotia’s gross
domestic product (“GDP”) at market prices was $33.0 billion, or 2.1% of Canada’s GDP. Compared with
the levels for 2006, real GDP in chained 2002 dollars for Nova Scotia and Canada increased by 1.7%
and 2.7%, respectively, in 2007. Total exports of goods and services from Nova Scotia, to both
international and inter-provincial destinations, in 2007 increased by 1.5%. Manufacturers’
shipments in 2007 increased by 1.7% for Nova Scotia compared to an increase of 0.4% for Canada.
10
The following table sets forth certain information about economic activity in Nova Scotia and,
where provided, Canada, for the calendar years 2003 through 2007.
SELECTED ECONOMIC INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rate of |
|
|
2003 |
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
Growth(1) |
|
|
(In millions unless otherwise indicated) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Domestic Product (Nova Scotia) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At Market Prices (2) |
|
$ |
28,851 |
|
|
$ |
29,853 |
|
|
$ |
31,275 |
|
|
$ |
31,737 |
|
|
$ |
33,010 |
|
|
|
3.4 |
% |
Chained 2002 Dollars |
|
|
27,464 |
|
|
|
27,710 |
|
|
|
28,069 |
|
|
|
28,328 |
|
|
|
28,803 |
|
|
|
1.2 |
% |
Gross Domestic Product (Canada) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At Market Prices (2) |
|
|
1,213,175 |
|
|
|
1,290,906 |
|
|
|
1,372,626 |
|
|
|
1,450,490 |
|
|
|
1,535,646 |
|
|
|
6.1 |
% |
Chained 2002 Dollars |
|
|
1,174,592 |
|
|
|
1,211,239 |
|
|
|
1,246,064 |
|
|
|
1,284,819 |
|
|
|
1,319,681 |
|
|
|
3.0 |
% |
Personal Income |
|
|
24,437 |
|
|
|
25,394 |
|
|
|
26,625 |
|
|
|
27,612 |
|
|
|
28,917 |
|
|
|
4.3 |
% |
Personal Income per capita (3) |
|
|
26,094 |
|
|
|
27,074 |
|
|
|
28,446 |
|
|
|
29,530 |
|
|
|
30,956 |
|
|
|
4.4 |
% |
Capital Expenditures |
|
|
5,654.1 |
|
|
|
5,696.9 |
|
|
|
6,004.9 |
|
|
|
6,337.4 |
|
|
|
6,229.1 |
|
|
|
2.5 |
% |
Retail Trade |
|
|
10,015 |
|
|
|
10,297 |
|
|
|
10,527 |
|
|
|
11,192 |
|
|
|
11,638 |
|
|
|
3.8 |
% |
Value of Manufacturers’ Shipments |
|
|
9,107 |
|
|
|
9,630 |
|
|
|
10,064 |
|
|
|
9,712 |
|
|
|
9,875 |
|
|
|
2.0 |
% |
Unemployment Rate |
|
|
9.1 |
% |
|
|
8.8 |
% |
|
|
8.4 |
% |
|
|
7.9 |
% |
|
|
8.0 |
% |
|
|
|
|
Annual Increase in Consumer Price Index: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nova Scotia |
|
|
3.4 |
% |
|
|
1.8 |
% |
|
|
2.8 |
% |
|
|
2.0 |
% |
|
|
1.9 |
% |
|
|
|
|
Canada |
|
|
2.8 |
% |
|
|
1.8 |
% |
|
|
2.2 |
% |
|
|
2.0 |
% |
|
|
2.2 |
% |
|
|
|
|
|
|
|
(1) |
|
Compound annual rate of growth is computed by distributing the aggregate amount of growth
during the period on the basis of a single annual rate of growth compounded annually. These
rates are not adjusted for inflation unless otherwise indicated. |
|
(2) |
|
Gross Domestic Product (“GDP”) at market prices represents the value added by each of the
factors of production plus indirect taxes less subsidies. |
|
(3) |
|
In dollars |
Sources: Statistics Canada, Catalogue No 13-213, 13-001, 61-206, 31-001, 63-005 and CANSIM Table
080-0002, 304-0015 and 326-0021.
11
Recent Developments
Global economic and financial market conditions have deteriorated over the past number months.
The Bank of Canada has stated that although Canada’s economy evolved largely as expected during the
first three-quarters of 2008, it is now entering a recession as a result of the weakness in global
economic activity. These global economic conditions will likely negatively impact the Nova Scotian
economy.
The Conference Board of Canada’s economic forecast on February 12, 2009 shows Nova Scotia and
Canada’s GDP growth at basic prices in 2002 dollars would be -0.3% and -0.5%, respectively, for
2009.
In response to the weakening of economic activity, the Province introduced an Infrastruture
Stimulus Plan on March 11, 2009. That plan is primarily based on increased public capital
expenditures that are expected to add $1.4 billion to the Province’s debt. As the stimulus spending
will appear as capital expenditures rather than as part of the operating budget, the Province has
stated that the Province will not incur a deficit in 2009-10.
The following table sets forth the most recently available information with respect to certain
economic indicators for Nova Scotia and Canada.
RECENT DEVELOPMENTS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Percentage Change except |
|
|
|
|
where noted |
|
|
Period |
|
Nova Scotia |
|
Canada |
|
Retail Trade (1)
|
|
Jan. — Dec 2008/
Jan. — Dec 2007
|
|
|
4.5 |
% |
|
|
3.3 |
% |
|
|
|
|
|
|
|
|
|
|
|
Housing Starts (all areas) (2)
|
|
Jan. — Sep .2008/
Jan. — Sep. 2007
|
|
|
-15.6 |
% |
|
|
-7.6 |
% |
|
|
|
|
|
|
|
|
|
|
|
Unemployment Rate (3)
|
|
January 2009
|
|
|
8.8 |
% |
|
|
7.2 |
% |
Unemployment Rate
|
|
Jan. — Dec 2008
|
|
|
7.7 |
% |
|
|
6.1 |
% |
|
|
|
|
|
|
|
|
|
|
|
Consumer Price Index
|
|
Jan. — Dec. 2008/
Jan. — Dec. 2007
|
|
|
3.0 |
% |
|
|
2.3 |
% |
|
|
|
(1) |
|
Seasonally adjusted. |
|
(2) |
|
These figures represent residential housing starts in both urban and rural areas. |
|
(3) |
|
These figures reflect the seasonally adjusted rate of unemployment. |
Sources: Statistics Canada, Catalogue No. 71-001 PPB and CANSIM Tables 080-0014, 027-0008 and
326-0020.
12
Economic Structure
Nova Scotia’s economy features the general characteristics of developed economies. Nova
Scotia’s service sector is disproportionately larger than that of Canada. This represents Nova
Scotia’s long-established position as the principal private sector service center for Atlantic
Canada and the center for regional public administration and defense.
The following table shows the relative contribution of each sector to GDP in basic prices
(chained 2002 dollars) for Nova Scotia and Canada for the calendar years indicated.
NOVA SCOTIA GROSS DOMESTIC PRODUCT BY INDUSTRY IN BASIC PRICES
(CHAINED 2002 DOLLARS)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Rate of |
|
|
% of GDP |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Growth |
|
|
in Basic Prices, |
|
|
|
2003 |
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2003-2007 |
|
|
2007 |
|
|
|
(In millions) |
|
|
|
|
|
|
Nova Scotia |
|
|
Canada |
|
Primary Sector: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Agriculture, Forestry, Fishing, and Hunting |
|
$ |
800.4 |
|
|
$ |
740.4 |
|
|
$ |
734.9 |
|
|
$ |
674.8 |
|
|
$ |
679.9 |
|
|
|
-4.0 |
% |
|
|
2.6 |
% |
|
|
2.2 |
% |
Mining and Oil, and Gas Extraction |
|
|
893.6 |
|
|
|
795.1 |
|
|
|
826.2 |
|
|
|
753.8 |
|
|
|
799.2 |
|
|
|
-2.8 |
% |
|
|
3.0 |
|
|
|
4.7 |
|
Utilities |
|
|
642.9 |
|
|
|
615.8 |
|
|
|
611.6 |
|
|
|
565.8 |
|
|
|
600.4 |
|
|
|
-1.7 |
% |
|
|
2.3 |
|
|
|
2.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,336.9 |
|
|
|
2,151.3 |
|
|
|
2,172.7 |
|
|
|
1,994.4 |
|
|
|
2,079.5 |
|
|
|
-2.9 |
% |
|
|
7.9 |
|
|
|
9.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Secondary Sector: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Manufacturing |
|
|
2,629.5 |
|
|
|
2,847.1 |
|
|
|
2,858.7 |
|
|
|
2,766.9 |
|
|
|
2,892.0 |
|
|
|
2.4 |
% |
|
|
10.9 |
|
|
|
15.2 |
|
Construction |
|
|
1,482.6 |
|
|
|
1,546.6 |
|
|
|
1,531.5 |
|
|
|
1,595.6 |
|
|
|
1,561.5 |
|
|
|
1.3 |
% |
|
|
5.9 |
|
|
|
6.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,112.1 |
|
|
|
4,393.7 |
|
|
|
4,390.2 |
|
|
|
4,362.5 |
|
|
|
4,453.5 |
|
|
|
2.0 |
% |
|
|
16.8 |
|
|
|
21.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Service Sector: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Transportation and Warehousing |
|
$ |
1,053.0 |
|
|
$ |
1,037.0 |
|
|
$ |
1,017.6 |
|
|
$ |
1,026.4 |
|
|
$ |
1,043.7 |
|
|
|
-0.2 |
% |
|
|
3.9 |
|
|
|
4.6 |
|
Wholesale and Retail Trade |
|
|
2,764.9 |
|
|
|
2,782.7 |
|
|
|
2,806.5 |
|
|
|
2,877.3 |
|
|
|
2,965.2 |
|
|
|
1.8 |
% |
|
|
11.2 |
|
|
|
11.7 |
|
Information and Culture Industries |
|
|
896.0 |
|
|
|
867.2 |
|
|
|
918.4 |
|
|
|
935.3 |
|
|
|
949.2 |
|
|
|
1.5 |
% |
|
|
3.6 |
|
|
|
3.6 |
|
Finance and Insurance, Real Estate and
Leasing, and Management of Companies |
|
|
4,902.6 |
|
|
|
5,027.7 |
|
|
|
5,151.7 |
|
|
|
5,349.1 |
|
|
|
5,506.0 |
|
|
|
2.9 |
% |
|
|
20.8 |
|
|
|
19.7 |
|
Education Services |
|
|
1,421.7 |
|
|
|
1,449.9 |
|
|
|
1,513.0 |
|
|
|
1,561.5 |
|
|
|
1,577.2 |
|
|
|
2.6 |
% |
|
|
6.0 |
|
|
|
4.8 |
|
Health Care and Social Assistance |
|
|
2,070.7 |
|
|
|
2,100.9 |
|
|
|
2,151.5 |
|
|
|
2,243.1 |
|
|
|
2,272.6 |
|
|
|
2.4 |
% |
|
|
8.6 |
|
|
|
6.3 |
|
Arts, Entertainment, and Recreation |
|
|
179.7 |
|
|
|
184.8 |
|
|
|
186.8 |
|
|
|
187.5 |
|
|
|
186.7 |
|
|
|
1.0 |
% |
|
|
0.7 |
|
|
|
1.0 |
|
Accommodation and Food Services |
|
|
642.3 |
|
|
|
640.6 |
|
|
|
628.1 |
|
|
|
630.7 |
|
|
|
601.6 |
|
|
|
-1.6 |
% |
|
|
2.3 |
|
|
|
2.2 |
|
Other (1) |
|
|
1,885.3 |
|
|
|
1,950.7 |
|
|
|
1,970.3 |
|
|
|
1,981.3 |
|
|
|
2,044.9 |
|
|
|
2.1 |
% |
|
|
7.7 |
|
|
|
9.8 |
|
Public Administration |
|
|
2,689.5 |
|
|
|
2688.4 |
|
|
|
2738.2 |
|
|
|
2772.5 |
|
|
|
2787.1 |
|
|
|
0.9 |
% |
|
|
10.5 |
|
|
|
5.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
18,505.7 |
|
|
|
18,729.9 |
|
|
|
19,082.1 |
|
|
|
19,564.7 |
|
|
|
19,934.2 |
|
|
|
1.9 |
% |
|
|
75.3 |
|
|
|
69.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Domestic Product at Basic Prices |
|
$ |
24,954.7 |
|
|
$ |
18,729.9 |
|
|
$ |
19,082.1 |
|
|
$ |
19,564.7 |
|
|
$ |
19,934.2 |
|
|
|
1.9 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes the following industry categories: Professional, Scientific and Technical Services;
Administrative and Support, Waste Management and Remediation Services; and, Other Services. |
Sources: Statistics Canada, Catalogue No. 15-001-XPB
13
Population and Labor Force
According to estimates by Statistics Canada, at July 1, 2008, the population of Nova Scotia
was 938,310 or 2.8% of the Canadian population of 33.3 million. During the period July 2004 to July
2008, the population of Nova Scotia remained unchanged, as compared to growth of 1.1% for Canada.
Nova Scotia’s labor force grew at a compounded annual rate of 0.3% compared to 1.5% for Canada for
the 2004 to 2008 calendar year period.
In 2007, the Province’s labor force averaged 487,000 persons, representing 63.7% of the
population 15 years of age and over. This is an increase of 0.8 percentage points in the
participation rate compared to 2006.
In 2008, the Province’s labor force averaged 491,000 persons, representing 63.9% of the
population 15 years of age and over. This is an increase of 0.2 percentage points in the
participation rate compared to 2007.
Nova Scotia’s unemployment rate increased to 8.8% in January 2009, on a seasonally adjusted
basis, versus the January 2008 level of 7.4%. This compares with an increase in rates to 7.2% from
5.8% respectively for Canada for the same period. The unemployment rate for Nova Scotia in January
2009 reflects an increase in the labor force of 1.9%, an increase in the number of individuals
employed of 0.4%, combined with a increase in the number of unemployed of 20.4%, compared to the
same month in 2008.
The following table sets forth Nova Scotia’s population and labor force for the 2004 to 2008
calendar years.
POPULATION AND LABOR FORCE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound Annual Rate |
|
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
of Growth |
|
|
(In thousands unless otherwise indicated) |
Total Population (July 1) |
|
|
938 |
|
|
|
936 |
|
|
|
935 |
|
|
|
934 |
|
|
|
938 |
|
|
|
0.0 |
% |
Population 15 Years of Age and Over |
|
|
757 |
|
|
|
761 |
|
|
|
763 |
|
|
|
764 |
|
|
|
769 |
|
|
|
0.4 |
% |
Labor Force |
|
|
485 |
|
|
|
484 |
|
|
|
480 |
|
|
|
487 |
|
|
|
491 |
|
|
|
0.3 |
% |
Labor Force Employed |
|
|
442 |
|
|
|
443 |
|
|
|
442 |
|
|
|
448 |
|
|
|
453 |
|
|
|
0.6 |
% |
Participation Rate (%): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nova Scotia |
|
|
64.1 |
% |
|
|
63.6 |
% |
|
|
62.9 |
% |
|
|
63.7 |
% |
|
|
63.9 |
% |
|
|
|
|
Canada |
|
|
67.5 |
% |
|
|
67.2 |
% |
|
|
67.2 |
% |
|
|
67.6 |
% |
|
|
67.8 |
% |
|
|
|
|
Unemployment Rate (%): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nova Scotia |
|
|
8.8 |
% |
|
|
8.4 |
% |
|
|
7.9 |
% |
|
|
8.0 |
% |
|
|
7.7 |
% |
|
|
|
|
Canada |
|
|
7.2 |
% |
|
|
6.8 |
% |
|
|
6.3 |
% |
|
|
6.0 |
% |
|
|
6.1 |
% |
|
|
|
|
Source: Statistics Canada, Catalogue Number 71F0004-XCB, 90-002-XPB and 91-213-XIB.
14
The following table illustrates the distribution of employment in Nova Scotia by industry for
the calendar years 2004 through 2008, and the compound annual rate of growth over the period 2004
to 2008.
EMPLOYMENT BY INDUSTRY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Rate of |
|
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
Growth |
|
|
(In thousands) |
Agriculture |
|
|
5.4 |
|
|
|
5.8 |
|
|
|
4.7 |
|
|
|
5.6 |
|
|
|
6.4 |
|
|
|
4.3 |
% |
Forestry, Fishing, Mining, Oil, and Gas |
|
|
13.9 |
|
|
|
15 |
|
|
|
12.7 |
|
|
|
12.2 |
|
|
|
12.7 |
|
|
|
-2.2 |
% |
Utilities |
|
|
2.5 |
|
|
|
2.4 |
|
|
|
1.8 |
|
|
|
1.9 |
|
|
|
3.1 |
|
|
|
5.5 |
% |
Construction |
|
|
28.2 |
|
|
|
27.7 |
|
|
|
27.3 |
|
|
|
27.2 |
|
|
|
31.3 |
|
|
|
2.6 |
% |
Manufacturing |
|
|
43.6 |
|
|
|
40.3 |
|
|
|
39.1 |
|
|
|
41.4 |
|
|
|
39.1 |
|
|
|
-2.7 |
% |
Wholesale and Retail Trade |
|
|
74.7 |
|
|
|
77.8 |
|
|
|
78.2 |
|
|
|
77 |
|
|
|
79.2 |
|
|
|
1.5 |
% |
Transportation and Warehousing |
|
|
21.4 |
|
|
|
21 |
|
|
|
18.7 |
|
|
|
18.4 |
|
|
|
18.6 |
|
|
|
-3.4 |
% |
Finance, Insurance, Real Estate, and Leasing |
|
|
22.2 |
|
|
|
21.8 |
|
|
|
22.3 |
|
|
|
23.2 |
|
|
|
22.3 |
|
|
|
0.1 |
% |
Professional, Scientific, and Technical Services |
|
|
20.3 |
|
|
|
20.2 |
|
|
|
18.4 |
|
|
|
17.5 |
|
|
|
21.3 |
|
|
|
1.2 |
% |
Business, Building and Other Support Services |
|
|
24.9 |
|
|
|
24.2 |
|
|
|
28.8 |
|
|
|
27.1 |
|
|
|
25.9 |
|
|
|
1.0 |
% |
Educational Services |
|
|
36 |
|
|
|
35.3 |
|
|
|
34.7 |
|
|
|
36.3 |
|
|
|
33.9 |
|
|
|
-1.5 |
% |
Health Care and Social Assistance |
|
|
53.6 |
|
|
|
56 |
|
|
|
59.1 |
|
|
|
61.5 |
|
|
|
60.5 |
|
|
|
3.1 |
% |
Information, Culture, and Recreation |
|
|
16.6 |
|
|
|
15.8 |
|
|
|
16.3 |
|
|
|
19.5 |
|
|
|
19.8 |
|
|
|
4.5 |
% |
Accommodation and Food Services |
|
|
31.1 |
|
|
|
31.6 |
|
|
|
29.8 |
|
|
|
30.2 |
|
|
|
29.4 |
|
|
|
-1.4 |
% |
Other Services |
|
|
20.4 |
|
|
|
20.8 |
|
|
|
20.7 |
|
|
|
20.5 |
|
|
|
19.4 |
|
|
|
-1.2 |
% |
Public Administration |
|
|
27.2 |
|
|
|
27.4 |
|
|
|
29.2 |
|
|
|
28.1 |
|
|
|
30.3 |
|
|
|
2.7 |
% |
Total — All Industries |
|
|
442.2 |
|
|
|
443.1 |
|
|
|
441.8 |
|
|
|
447.6 |
|
|
|
453.2 |
|
|
|
0.6 |
% |
Sources: Statistics Canada, Labour Force Historical Review 2006 CD-ROM No. 71F0004-XCB
15
Income and Prices
Personal income in Nova Scotia increased by 4.6% to $28,917 million in 2007, and average
weekly wages in 2007 increased by 2.2% to $673.38 (average weekly wages were $687.68 in 2008).
The following table reflects the percentage increases in average weekly wages and salaries as
well as the Consumer Price Index (“CPI”) for Nova Scotia and Canada for calendar years 2004 through
2008.
CPI AND AVERAGE WEEKLY WAGES AND SALARIES, INDUSTRIAL
AGGREGATE (PERCENT INCREASE OVER PREVIOUS YEAR)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nova Scotia |
|
Canada |
|
|
Average Weekly |
|
|
|
|
|
Average Weekly |
|
|
|
|
Wages and Salaries |
|
CPI |
|
Wages and Salaries |
|
CPI |
2003 |
|
|
1.2 |
% |
|
|
3.4 |
% |
|
|
1.3 |
% |
|
|
2.8 |
% |
2004 |
|
|
2.8 |
% |
|
|
1.8 |
% |
|
|
2.1 |
% |
|
|
1.8 |
% |
2005 |
|
|
3.4 |
% |
|
|
2.8 |
% |
|
|
3.2 |
% |
|
|
2.2 |
% |
2006 |
|
|
2.1 |
% |
|
|
2.0 |
% |
|
|
3.0 |
% |
|
|
2.0 |
% |
2007 |
|
|
2.2 |
% |
|
|
1.9 |
% |
|
|
3.2 |
% |
|
|
2.2 |
% |
2008 |
|
|
2.1 |
% |
|
|
3.0 |
% |
|
|
2.8 |
% |
|
|
2.3 |
% |
Sources: Statistics Canada, Catalogue Number 72F0023-XCB and CANSIM Tables 281-0026 and 326-0021.
16
Capital Expenditures
Capital expenditures consist of investment in new construction, and purchases of machinery and
equipment in Nova Scotia by the private sector and all levels of government.
The following table sets forth preliminary actual capital expenditures for the 2005 to 2008
calendar years and investment intentions for 2009.
CAPITAL EXPENDITURES1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2008(2) |
|
|
2009(3) |
|
|
|
(in millions) |
|
Housing |
|
$ |
1,768.3 |
|
|
$ |
1,889.9 |
|
|
$ |
2,023.9 |
|
|
$ |
2,027.6 |
|
|
$ |
1,888.5 |
|
Public Administration, Education, Health,
and Social Services |
|
|
957.5 |
|
|
|
1,161.8 |
|
|
|
1,074.6 |
|
|
|
1,319.6 |
|
|
|
1,378.3 |
|
Wholesale and Retail Trade |
|
|
420.8 |
|
|
|
374.8 |
|
|
|
453.3 |
|
|
|
428.9 |
|
|
|
400.6 |
|
Finance, Insurance, Real Estate, and Leasing |
|
|
842.2 |
|
|
|
906.5 |
|
|
|
900.1 |
|
|
|
675.2 |
|
|
|
658.5 |
|
Manufacturing |
|
|
421.5 |
|
|
|
391.9 |
|
|
|
612.1 |
|
|
|
416.8 |
|
|
|
417.6 |
|
Transportation and Warehousing |
|
|
283.5 |
|
|
|
345.9 |
|
|
|
394.0 |
|
|
|
356.6 |
|
|
|
330.8 |
|
Information and Cultural Industries |
|
|
199.1 |
|
|
|
242.7 |
|
|
|
271.3 |
|
|
|
222.9 |
|
|
|
202.6 |
|
Agriculture, Forestry, and Fishing |
|
|
123.3 |
|
|
|
111.4 |
|
|
|
112.8 |
|
|
|
98.4 |
|
|
|
97.4 |
|
Mining and Mining Related |
|
|
508.1 |
|
|
|
380.8 |
|
|
|
150.1 |
|
|
|
364.4 |
|
|
|
697.7 |
|
Other (4) |
|
|
480.6 |
|
|
|
531.7 |
|
|
|
636.1 |
|
|
|
680.3 |
|
|
|
687.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
6,004.9 |
|
|
$ |
6,337.4 |
|
|
$ |
6,628.3 |
|
|
$ |
6,590.7 |
|
|
$ |
6,759.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Private Sector |
|
$ |
4,995.2 |
|
|
$ |
5,094.3 |
|
|
$ |
5,382.9 |
|
|
$ |
5,138.2 |
|
|
$ |
5,280.2 |
|
Public Sector |
|
|
1,009.7 |
|
|
|
1,243.1 |
|
|
|
1,245.4 |
|
|
|
1,452.5 |
|
|
|
1,479.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
6,004.9 |
|
|
$ |
6,337.4 |
|
|
$ |
6,628.3 |
|
|
$ |
6,590.7 |
|
|
$ |
6,759.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Construction |
|
$ |
3,636.6 |
|
|
$ |
3,951.9 |
|
|
$ |
3,865.3 |
|
|
$ |
4,373.4 |
|
|
$ |
4,513.5 |
|
Machinery and Equipment |
|
|
2,368.3 |
|
|
|
2,385.5 |
|
|
|
2,762.9 |
|
|
|
2,217.3 |
|
|
|
2,246.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
6,004.9 |
|
|
$ |
6,337.4 |
|
|
$ |
6,628.3 |
|
|
$ |
6,590.7 |
|
|
$ |
6,759.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Capital Expenditures are classified under the North American Industrial Classification
System (“NAICS”). |
|
(2) |
|
Preliminary Actual |
|
(3) |
|
Investment Intentions as reported in February 2009. |
|
(4) |
|
“Other” includes Utilities; Construction; Professional, Scientific and Technical Services;
Management of Companies and Enterprises; Administrative and Support, Waste Management and
Remediation Services; Arts, Entertainment, and Recreation; Accommodation and Food Services;
and Other Services. |
Source: Statistics Canada, Catalogue Number 61-205, February 2009 and CANSIM Tables 026-0005 and
032-0002.
17
The Private and Public Investment in Canada, Intentions 2009 survey published in February 2009
by Statistics Canada showed a 2.6% increase in capital expenditures intentions in Nova Scotia in
2009 over 2008, reflecting expectations of increased capital spending in public administration and
mining and mining related industries, and offset by declining spending in housing, transportation
and warehousing, and the information and culture industries. Private sector capital expenditure
investment intentions for 2009 were expected to account for 78.1% of the total capital
expenditures.
The preliminary actual results for 2008 showed a 0.6% decrease in capital expenditures as
compared to 2007, reflecting increased investment in, public administration and mining and mining
related industries being more than offset by declines in capital expenditure in manufacturing,
wholesale and retail trade, transportation and warehousing, finance, insurance, real estate and
leasing, and the information and culture sector.
Capital expenditures for 2007 showed a 4.6% increase in capital expenditures over 2006,
reflecting increased spending in housing, transportation and warehousing, finance, insurance, real
estate and leasing, wholesale and retail trade, manufacturing, and information and culture
industries. These results were partially offset by declines in mining and mining related
industries, and public administration sectors.
Capital expenditures for 2006 showed a 5.5% increase in capital expenditures over 2005,
reflecting increased investment in transportation and warehousing, information and culture
industries, public administration, housing, and finance, insurance, real estate and leasing. These
were somewhat offset by declines in capital expenditure in mining and mining related industries,
wholesale and retail sale, agriculture, forestry and fishing, and manufacturing.
18
Goods Producing Industries
Manufacturing. The manufacturing industry is the largest contributor to the goods producing
portion of Nova Scotia’s economy and accounted for 10.9% of real GDP (basic prices in chained 2002
dollars) in 2007. The gross selling value of manufacturers’ sales increased from $9,605 million in
2004 to an estimated total of $10,777 million in 2008 presenting a compound annual rate of growth
of 2.9%. This compares with a compound annual rate of growth of 0.9 % for Canada over the same
period.
In 2008, the gross selling value of manufacturers’ sales was 9.1% higher than in 2007. Exports
of refined petroleum products, wood pulp, tires, fruits, nuts, chocolate and food preparation were
up, while exports of newsprint and other paper products, lumber and fish products were down. The
employment level in the manufacturing sector in 2008 decreased by 2,300 persons or a decline of
5.6% compared to 2007.
Most of the employment in the manufacturing sector occurs outside of the province’s largest
urban center (Halifax Regional Municipality) making the sector directly and indirectly a key
employer in many of the more rural areas of the province.
The United States is the primary market for Nova Scotia’s international merchandise export
trade. In 2008, $4.5 billion or 78.0% of the value of Nova Scotia’s international merchandise
exports went to the United States.
Almost 30% of manufacturers’ sales for Nova Scotia in 2008 were attributable to two major
industry groups: food and plastics and rubber products. The food industry accounted for 17.8% of
total shipments in 2008, and the plastics and rubber products accounted for 10.7%. The latter
category is in part related to the three plants operated by Michelin North American (Canada) Inc.
The pulp and paper industry and sales from a petroleum refinery (for which the specific output
valued are not published but are included by Statistics Canada shown in “Other” in the table below)
contribute to significant output within the manufacturing industry.
The following table sets forth the gross selling value of manufacturers’ sales for Nova Scotia
by industry group for the calendar years 2004 through 2008.
GROSS SELLING VALUE OF MANUFACTURERS’ SALES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
|
(millions $) |
Food |
|
$ |
2,287.1 |
|
|
$ |
2,228.0 |
|
|
$ |
2,097.7 |
|
|
$ |
2,065.0 |
|
|
$ |
1,918.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Wood Products |
|
|
599.3 |
|
|
|
629.7 |
|
|
|
605.5 |
|
|
|
509.2 |
|
|
|
465.3 |
|
Printing & Related Support Activities |
|
|
112.1 |
|
|
|
108.4 |
|
|
|
100.5 |
|
|
|
105.1 |
|
|
|
103.9 |
|
Chemicals |
|
|
144.6 |
|
|
|
152.8 |
|
|
|
232.4 |
|
|
|
272.7 |
|
|
|
322.4 |
|
Plastics & Rubber Products |
|
|
1,348.6 |
|
|
|
1,368.4 |
|
|
|
1,116.3 |
|
|
|
1,177.8 |
|
|
|
1,152.6 |
|
Non-metallic Mineral Products |
|
|
165.1 |
|
|
|
183.0 |
|
|
|
193.4 |
|
|
|
215.2 |
|
|
|
226.7 |
|
Fabricated Metal Products |
|
|
241.0 |
|
|
|
218.2 |
|
|
|
229.2 |
|
|
|
245.7 |
|
|
|
256.7 |
|
Machinery |
|
|
139.1 |
|
|
|
164.5 |
|
|
|
163.3 |
|
|
|
155.3 |
|
|
|
189.3 |
|
Computer & Electronic Products |
|
|
179.5 |
|
|
|
151.3 |
|
|
|
306.8 |
|
|
|
224.0 |
|
|
|
196.8 |
|
Electrical Equipment, Appliances & Components |
|
|
76.5 |
|
|
|
69.8 |
|
|
|
46.2 |
|
|
|
41.1 |
|
|
|
40.4 |
|
Transportation Equipment |
|
|
855.3 |
|
|
|
864.4 |
|
|
|
813.2 |
|
|
|
714.0 |
|
|
|
825.2 |
|
Furniture & Related Products |
|
|
105.6 |
|
|
|
109.9 |
|
|
|
96.1 |
|
|
|
102.4 |
|
|
|
114.6 |
|
Other |
|
|
3,351.0 |
|
|
|
3,769.5 |
|
|
|
3,654.4 |
|
|
|
4,046.2 |
|
|
|
4,964.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
All Manufacturing Industries |
|
$ |
9,604.8 |
|
|
$ |
10,017.9 |
|
|
$ |
9,655.0 |
|
|
$ |
9,873.7 |
|
|
$ |
10,776.9 |
|
Source: Statistics Canada, CANSIM Table 304-0015.
19
Construction. The construction industry is the second largest goods-producing industry in
Nova Scotia. Its contribution to real GDP (basic prices in chained 2002 dollars) was $1,644.9
million in 2007 and accounted for 5.9% of total real GDP. Construction activity accounted for 66.4%
of total capital expenditures in 2008, an increase of 8.0% from 2007 versus a 1.6% increase in
Canada in 2008 over 2007. Compound annual growth in capital expenditures on construction in Nova
Scotia was 4.5% for the 2004 to 2008 period, as compared to 10.7% for Canada.
Canada Mortgage and Housing Corporation reported that housing starts in all areas of Nova
Scotia decreased by 16.2% in 2008, compared to an decrease of 7.6% at the national level over the
same period. Capital expenditures on housing construction in Nova Scotia increased 0.2% in 2008,
versus a 2.8% increase in Canada for the same period. Construction associated with housing starts
comprises only part of the capital expenditures on housing construction; a significant part of
these expenditures are for residential renovations. Renovations in Nova Scotia in 2007 totaled $452
million.
Capital expenditures on non-residential construction increased 27.4% in 2008 in Nova Scotia
versus an increase of 11.4% in Canada.
Employment in the construction sector in 2008 was up by 4,100 persons compared to 2007, the
demand for workers in the industry over the last couple of years was above the historical long-term
levels. Over the time period of 2004 to 2008, the compound annual rate of growth for employment in
the construction industry was 2.6%, well above the rate of 1.3% for all industries in Nova Scotia.
Fisheries. A large and diverse commercial fish and processing industry exists in Nova
Scotia. Nova Scotia harvests over 50 different species of seafood, and exports these products to
all major seafood markets. The Federal Government, through detailed stock assessment plans and
quotas, manages fisheries resources.
Nova Scotia’s fish landings had a value of $599.2 million in 2007. Shellfish such as lobster,
snow crab and scallops, accounted for 83.1% of the value of landings. Lobster is the predominant
species and represented 49.8% of the total landed value. Scallops and shrimp are the next
predominant species at 13.6% and 7.4%, respectively.
Nova Scotia was the largest exporting province for seafood in 2007 at just under $461.6
million. The United States is still Nova Scotia’s main destination for seafood, representing 71.3%
of fish exports. Most of the remaining export value of seafood in 2007 was destined for Japan,
Belgium, Spain, South Korea, Unitied Kingdom and the Netherlands. The international export value of
seafood in 2007 declined by 3.6% compared to levels in 2006.
The harvesting sector employed 6,300 persons throughout all of Nova Scotia in 2007, a decrease
of approximately 900 persons from 2006.
In terms of real GDP growth, 2007 saw output decrease 1.5% from 2006 levels. Total volume of
commercial fish landings (metric tonnes) was down 11.4%. The Canadian dollar has been putting
downward pressure on the value of exports to the U.S. market; the total value of exports for fish
and seafood was down 3.6% in 2007 relative to 2006.
20
The following table sets forth information with respect to the fishing and fish processing
industry in Nova Scotia for the calendar years 2003 through 2007.
FISHING AND FISH PROCESSING INDUSTRY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
|
2004 |
|
2005(1) |
|
2006(1) |
|
2007(2) |
|
|
(in Millions) |
Quantity of Fish Landings (pounds)(3) |
|
|
816.8 |
|
|
|
733.0 |
|
|
|
591.3 |
|
|
|
626.7 |
|
|
|
555.0 |
|
Value of Fish Landings (3) |
|
$ |
847.2 |
|
|
$ |
743.5 |
|
|
$ |
731.7 |
|
|
$ |
656.7 |
|
|
$ |
599.2 |
|
Market Value of Fish Products Produced (4) (5) |
|
$ |
1,609.6 |
|
|
$ |
1,412.7 |
|
|
$ |
1,390.2 |
|
|
$ |
1,247.7 |
|
|
$ |
1,138.5 |
|
Capital Investment (6) |
|
$ |
64.9 |
|
|
$ |
57.3 |
|
|
$ |
59.3 |
|
|
$ |
51.8 |
|
|
$ |
52.0 |
|
Value of Exports of Fish and Marine Products |
|
$ |
1,187.9 |
|
|
$ |
1,098.3 |
|
|
$ |
1,045.7 |
|
|
$ |
983.6 |
|
|
$ |
954.7 |
|
|
|
|
(1) |
|
Revised. |
|
(2) |
|
Preliminary. |
|
(3) |
|
Does not include Aquaculture. |
|
(4) |
|
Estimated by Province of Nova Scotia. |
|
(5) |
|
Includes an estimate of market value for imported frozen fish processed net of raw material
costs. |
|
(6) |
|
Includes fishing, hunting, and trapping. |
|
Sources: |
|
Department of Fisheries and Oceans, and Nova Scotia Department of Agriculture and
Fisheries.
Statistics Canada, Catalogue Number 61-205 and CANSIM Table 29-0005. |
Participation in, and regulation of, the fisheries was the subject of a 1999 decision of the
Supreme Court of Canada. In September and November 1999, the Supreme Court held that under the
Treaty of 1760, the Mi’kmaq are entitled “to continue to provide for their own sustenance by taking
the products of their hunting, fishing and other gathering activities, and trading for what in 1760
termed ‘necessaries,’” which the Supreme Court interpreted as the ability to obtain a “moderate
livelihood.” A moderate livelihood was described by the Supreme Court as including basics such as
“food, clothing and housing, supplemented by a few amenities” but does not extend to the open-ended
accumulation of wealth. The Supreme Court held that the right is subject to regulation. See
“Introduction — Current Issues Concerning Native Persons.” The case was fact-specific in relation
to eels, and determinations of what are appropriate hunting, fishing and gathering activities for
modern Mi’kmaq will be decided by either a court on a case by case, fact specific basis, or through
negotiations of the parties. Interim fishing agreements have been entered into by the Federal
Department of Fisheries and Oceans with a majority of the native groups dealing with the issuance
of limited licenses for specific fisheries, including lobster fishing zones, training, and
acquisition of equipment. Licenses issued pursuant to these agreements are available as a result of
the Federal Government purchasing non-native licenses.
21
Mining and Mineral Exploration The value of mineral production (excluding oil and gas) in
Nova Scotia decreased 7.1% to $300 million in 2007 from 2006 levels. Gypsum, crushed stone, salt,
sand and gravel, and coal are the major minerals being produced. Nova Scotia also produces cement,
clay, limestone, dolomite, anhydrite, peat, barite, and silica.
Real GDP change in the sector, excluding the oil and gas sector, had a decline of 5.3% in 2007
from 2006. The industry, including the oil and gas sector, employed 3,400 persons in 2007,
unchanged from 2006.
Nova Scotia’s 2007 production value of stone decreased 2.2% to $81.2 million from 2006, with
production of 10.8 million tonnes.
Nova Scotia’s gypsum and anhydrite deposits are among the largest workable deposits in Canada.
Nova Scotia is the most productive gypsum-mining region in the world. Gypsum outcrops occur
throughout the whole of the northern half of the province’s mainland and Cape Breton Island. In
2007, Nova Scotia produced about 84% of Canada’s gypsum. Statistics show the value of gypsum
production to be $94.0 million in 2007 with 6.5 million tonnes being produced. For 2007, the value
of international exports was $78.1 million, a decrease of 11.0% from 2006. Approximately 83% of the
gypsum and anhydrite shipped from Nova Scotia was destined for the United States in 2007.
There are currently two surface coal mines operating in Nova Scotia. Production information is
currently unavailable due to confidentiality requirements of Statistics Canada.
In 2003, the Province announced that it had acquired the mining lease for the Sydney
coalfields from the Cape Breton Development Corporation, a crown corporation of the Federal
Government. This prompted the Provincial government to call for proposals for the Donkin coal
resource in December 2004. Xstrata plc won the bid to develop the Donkin mine. At present, the
project is managed by the Donkin Coal Alliance that is a joint venture between Xstrata Coal Donkin
Limited (a subsidiary of Xstrata plc) (75%) and Erdene Gold Inc. (25%). The capital budget required
to bring the mine to longwall production is estimated to be $313 million and includes a 10%
contingency for supply costs, while labour costs have had a 15% contingency applied. A preliminary
assessment study prepared for the Donkin Coal Alliance, which was made public in November 2007,
projects a mine life of 30-plus years, over which time approximately 109 million tonnes of
run-of-mine coal is expected to be produced. The mine is expected to have the potential to extract
up to three million tonnes of coal per year, employing about 275 miners. Xstrata filed for a
provincial environmental assessment of the Donkin Underground Exploration Project in October 2008.
The development of this mine has no public funding requests tied to the proposal.
Agriculture Real GDP in the agricultural sector decreased by 0.8% in 2007, despite a 0.3%
increase in farm cash receipts. Most of this change in real GDP occurred in field crop production,
where total crop receipts decreased 5.9% in 2007. The number of people employed in the
agricultural sector stood at 5,600 persons in 2007, an increase of approximately 900 from 2006. The
major components of agricultural production in Nova Scotia include dairy products, poultry, eggs
and fruit crop production. Farm cash receipts for livestock production were up 2.5% in 2007.
Forestry In 2007, the value of manufacturing shipments for wood products was $509.2 million, a
decrease of 15.9% from 2006. The logging sector employed approximately 2,500 persons in 2007, an
increase of approximately 300 from 2006. In 2007, the total provincial harvest of round wood was
5,248,716 cubic meters, an increase of 0.8% from 2006. Of this amount, 492,882 cubic meters or 9.4%
was exported. Finished lumber production was 1,224,800 metric tonnes, a decline of 12.6% from 2006.
Export sales of lumber, mostly to the United States, were down 22.3% in 2007 over 2006. In 2007,
export sales for paper products were up 108.0%, while wood pulp export shipments were down 1.4%.
22
Exports
The total value of exports of goods and services from Nova Scotia in 2007, under Statistics
Canada’s Provincial Economic Accounts data system, stood at $14,488 million, giving an annual
compound growth rate of 1.2% over the 2003 to 2007 period. The value of exports of goods and
services represented 43.9% of the total value of GDP in 2007.
Of the $14,488 million in total exports, 51.3% or $7,436 million were shipped to other
countries, leaving 48.7% or $7,052 million as exports to other provinces within Canada. Exports of
goods accounted for 72.8% of total exports while exports of services accounted for 27.2%. Most of
the goods are exported to other countries (60.6%), while services are mostly exported to other
provinces (73.5%.)
Over the 2003 to 2007 period, the total value of exports of goods had an annual compound
growth rate of 0.3% compared to 3.8% for the total value of export of services.
Statistics Canada reports in their Provincial Economic Accounts data system that the total
value of international exports of goods in 2007 was $6,392 million, experiencing an annual compound
rate growth of 0.2% since 2003. These figures can be contrasted with Nova Scotia’s international
merchandise exports of goods based on customs clearing data that amounted to $5,451.3 million in
2007. The Provincial Economic Accounts data system adjusts the customs data for other costs such as
transportation margins and duties. During the period 2003 to 2007 the Canadian dollar appreciated
from $1.4015 CAD/USD in 2003 to $1.0748 CAD/USD in 2007.
The following table sets forth categories of Selected Trade indicators for the calendar years
2003 through 2007.
SELECTED TRADE INDICATORS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
|
(In millions $) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exports of Goods and Services |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
7,295 |
|
|
|
7,749 |
|
|
|
7,755 |
|
|
|
7,267 |
|
|
|
7,436 |
|
Interprovincial |
|
|
6,523 |
|
|
|
6,705 |
|
|
|
7,000 |
|
|
|
7,003 |
|
|
|
7,052 |
|
Total Exports of Goods and Services |
|
|
13,818 |
|
|
|
14,454 |
|
|
|
14,755 |
|
|
|
14,270 |
|
|
|
14,488 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Imports of Goods and Services
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
International |
|
|
8,840 |
|
|
|
8,932 |
|
|
|
9,402 |
|
|
|
9,630 |
|
|
|
9,634 |
|
Interprovincial |
|
|
9,489 |
|
|
|
10,130 |
|
|
|
10,378 |
|
|
|
10,983 |
|
|
|
11,388 |
|
Total Imports of Goods and Services |
|
|
18,329 |
|
|
|
19,062 |
|
|
|
19,780 |
|
|
|
20,613 |
|
|
|
21,022 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade Balance |
|
|
(4,511 |
) |
|
|
(4,608 |
) |
|
|
(5,025 |
) |
|
|
(6,343 |
) |
|
|
(6,534 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23
The following table sets forth Nova Scotia’s top ten international merchandise exports by
industry for the calendar years 2004 through 2008, and the compound annual growth rate over the
2004 to 2008 period.
INTERNATIONAL MERCHANDISE EXPORTS BY INDUSTRY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compound |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Annual Rate |
|
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
of Growth |
|
|
(in millions) |
Oil & Gas Extraction |
|
|
1,067.8 |
|
|
|
1,348.6 |
|
|
|
974.9 |
|
|
|
1,159.9 |
|
|
|
1,445.8 |
|
|
|
7.9 |
% |
Tire Manufacturing |
|
|
735.8 |
|
|
|
735.2 |
|
|
|
758.9 |
|
|
|
819.4 |
|
|
|
857.9 |
|
|
|
3.9 |
% |
Paper Mills |
|
|
495.3 |
|
|
|
568.2 |
|
|
|
246.2 |
|
|
|
512.0 |
|
|
|
619.0 |
|
|
|
5.7 |
% |
Seafood Product Preparation & Packaging |
|
|
595.6 |
|
|
|
557.3 |
|
|
|
513.8 |
|
|
|
503.5 |
|
|
|
433.0 |
|
|
|
-7.7 |
% |
Fishing |
|
|
509.3 |
|
|
|
496.2 |
|
|
|
478.7 |
|
|
|
461.6 |
|
|
|
422.9 |
|
|
|
-4.5 |
% |
Petroleum Refineries |
|
|
149.1 |
|
|
|
69.8 |
|
|
|
130.0 |
|
|
|
100.5 |
|
|
|
195.1 |
|
|
|
7.0 |
% |
Pulp Mills |
|
|
219.5 |
|
|
|
172.9 |
|
|
|
170.9 |
|
|
|
168.5 |
|
|
|
163.9 |
|
|
|
-7.0 |
% |
Frozen Food Manufacturing |
|
|
101.4 |
|
|
|
96.2 |
|
|
|
114.5 |
|
|
|
111.9 |
|
|
|
108.2 |
|
|
|
1.6 |
% |
Sawmills & Wood Preservation |
|
|
250.7 |
|
|
|
227.7 |
|
|
|
204.3 |
|
|
|
158.8 |
|
|
|
98.0 |
|
|
|
-20.9 |
% |
Navigational, Measuring, Medical & Control Instruments |
|
|
67.1 |
|
|
|
62.9 |
|
|
|
63.7 |
|
|
|
69.2 |
|
|
|
77.1 |
|
|
|
3.5 |
% |
Sub-total |
|
|
3,123.8 |
|
|
|
4,335.0 |
|
|
|
3,655.9 |
|
|
|
4,065.2 |
|
|
|
4,421.0 |
|
|
|
9.1 |
% |
Other |
|
|
2,686.6 |
|
|
|
1,467.9 |
|
|
|
1,537.7 |
|
|
|
1,386.1 |
|
|
|
1,389.1 |
|
|
|
-15.2 |
% |
Grand total |
|
|
5,810.4 |
|
|
|
5,802.9 |
|
|
|
5,193.7 |
|
|
|
5,451.3 |
|
|
|
5,810.1 |
|
|
|
0.0 |
% |
Source: Statistics Canada and Industry Canada.
24
Service Sector
Overview. The metropolitan area is the largest financial and commercial service center in
Atlantic Canada. The area is also one of Canada’s major medical and scientific communities, and the
location of several federally sponsored scientific research institutions, including the Bedford
Institute of Oceanography. The Halifax region is also home to several universities as it is a major
education center for Atlantic Canada.
The Halifax region accounted for 46.2% of the total employment in Nova Scotia in 2008
producing an unemployment rate of 5.2% for 2008 compared to the 7.7% unemployment rate for the
Province as a whole, and 6.1% unemployment rate for Canada.
The following table sets forth the percentage contribution to the GDP for the service sector
by component for the calendar years 2003 through 2007.
SERVICE INDUSTRIES AS A PERCENTAGE OF TOTAL SERVICE PRODUCING INDUSTRIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2003 |
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance, Insurance, Real Estate, Renting and
Leasing, and Management of Companies |
|
|
26.5 |
% |
|
|
27.0 |
% |
|
|
27.2 |
% |
|
|
27.4 |
% |
|
|
27.7 |
% |
Wholesale and Retail Trade |
|
|
14.9 |
|
|
|
14.8 |
|
|
|
14.7 |
|
|
|
14.8 |
|
|
|
14.9 |
|
Public Administration |
|
|
14.5 |
|
|
|
14.4 |
|
|
|
14.3 |
|
|
|
14.0 |
|
|
|
13.9 |
|
Health Care and Social Assistance |
|
|
11.2 |
|
|
|
11.2 |
|
|
|
11.2 |
|
|
|
11.3 |
|
|
|
11.2 |
|
Educational Services |
|
|
7.7 |
|
|
|
7.8 |
|
|
|
8.0 |
|
|
|
7.9 |
|
|
|
7.7 |
|
Transportation and Warehousing (1) |
|
|
5.7 |
|
|
|
5.4 |
|
|
|
5.4 |
|
|
|
5.5 |
|
|
|
5.5 |
|
Information and Culture Industries |
|
|
4.8 |
|
|
|
4.7 |
|
|
|
4.7 |
|
|
|
4.8 |
|
|
|
4.7 |
|
Accommodation and Food Services |
|
|
3.5 |
|
|
|
3.4 |
|
|
|
3.3 |
|
|
|
3.4 |
|
|
|
3.4 |
|
Arts, Entertainment, and Recreation |
|
|
1.0 |
|
|
|
1.0 |
|
|
|
1.0 |
|
|
|
0.9 |
|
|
|
0.9 |
|
Other (2) |
|
|
10.2 |
|
|
|
10.4 |
|
|
|
10.2 |
|
|
|
10.1 |
|
|
|
10.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total (3) |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
100.0 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Includes Pipeline Transportation — See “Offshore Exploration and Development”. |
|
(2) |
|
Includes the following industrial categories: Professional, Scientific and Technical
Services; Administrative and Support, Waste Management and Remediation; and Other Services. |
|
(3) |
|
Numbers may not add up due to rounding. |
|
Source: Statistics Canada, Catalogue Number 15-203. |
Trade. The value of retail sales in 2008 in Nova Scotia was $12,154.3 million, a 4.5%
increase over the 2007 level. The compound annual rate of growth in retail sales was 4.2% in Nova
Scotia and 5.2% in Canada during the 2004 to 2008 period. Employment in the retail sector stood at
65,300 persons in 2008, an increase of approximately 1,600 persons compared to 2007.
The value of wholesale trade was $7,136.1 million in 2008, up 5.7% compared to 2007. The
sector had an employment level of 13,800 in 2008, an increase of approximately 500 from 2007. In
2007, the wholesale sector had a real GDP rate of change of 2.7%. As noted in the above table, the
trade sector accounts for almost 15% of the total value of GDP for the service producing sector.
Transportation and Warehousing. Transportation and warehousing have been important factors
in the economy of Nova Scotia throughout its history. Halifax harbor and the Strait of Canso are
deep-water, ice-free harbors. The Port of Halifax is capable of handling vessels up to 150,000
metric tonnes, and the Strait of Canso can accommodate the world’s largest super-tankers.
25
The sector had a real GDP growth rate (chained 2002 dollars) of 1.7% in 2007. Over the time
period of 2003 to 2007, the sector has experienced an annual compound decline of 0.2%. In 2007,
the sector employed about 18,400 persons, a decrease of 300 from 2006.
Port facilities at Halifax include 35 deep-water berths that are complemented by rail, air,
and motor freight services. With two container terminals, each capable of berthing two container
ships simultaneously, Halifax is Canada’s third largest container port and the only port on the
east coast of North America capable of handling fully laden Post-Panamax vessels. The total volume
of cargo handled by the Port of Halifax in 2008 was 10.3 million metric tonnes. In 2008,
containerized cargo tonnage amounted to 3.2 million metric tonnes. Bulk cargo, chiefly consisting
of petroleum products and gypsum, totaled 6.6 million metric tonnes. Ro/Ro (roll-on/roll-off) and
break-bulk accounted for the rest of the cargo tonnage shipped through the Port of Halifax. This
port serves as a trans-shipment point for automobile distribution throughout Atlantic Canada via
ship and rail. The Port of Halifax also serves more container lines, with more direct calls to
Europe, the Mediterranean, Middle East, Asia, South America, Central America, and the Caribbean
than any other Canadian port The Port of Halifax marked a record year for visitation by cruise
vessels with 125 vessels in 2008 and 228,133 passengers.
Tourism. Approximately 2.1 million tourists visited Nova Scotia during 2007, a similar
number of visitors as in 2006. The majority of visitors (86%) came from other parts of Canada.
Atlantic Canada is the largest Canadian market with 54% of total visitation, while 21% came from
Ontario and 7% from Western Canada. Western Canada and Ontario reported the strongest growth in
visitation this year. About 10% of visitors to the Province travelled from the United States, with
another 3% arriving from overseas markets. The downward trend in the number of Americans travelling
to Nova Scotia continued in 2007 with 18,000 fewer visitors compared to 2006 likely due to the
higher Canadian dollar and higher gas prices. However, this was offset by an additional 46,300
visitors from other parts of Canada. In overseas visitation, the UK market rose 9% or 2,000
visitors in 2007, while the German market continued to decline, down 54% or 6,900 visitors. Reports
indicate that air fare from Germany increased quite significantly in 2007, which likely contributed
to the decline in this market.
From January to November 2008, there were 1,960,500 visitors to the province, which is a 3%
decrease (or 174,500 fewer visitors) compared to the same period last year. This was due in large
part to a 6% decline in road visits. In contrast, year-to-date visits by air experienced a 2%
increase.
Energy
There is one petroleum refinery operating in Nova Scotia. Crude oil for the refinery is
obtained from foreign sources.
The majority of electricity generated in Nova Scotia is from coal and oil-fired facilities.
Overall total electricity production in Nova Scotia for 2008 was 12,164.4 gigawatt hours, a 2.8%
decrease in production over 2007. Total utility generation was 11,916.1 gigawatt hours, a 2.9%
decrease over 2007. Total hydro generation was 1,090.1 gigawatt hours, a 4.7% increase over 2007.
As of May 2008, there was 60 megawatts of installed power from wind turbines. Nova Scotia Power
Inc. had also entered into purchase agreements for an additional 240 megawatts of power to be
generated in the province. The Province of Nova Scotia’s regulations require that nearly 20 per
cent of the Province’s electricity supply come from renewable sources (wind, solar, tidal and
biomass technology) by 2013.
Offshore Exploration and Development
Since the beginning of exploration activity in the late 1960’s, substantial gas reserves and
modest oil reserves have been discovered, including the six fields that are part of the Sable
Offshore Energy Project (“SOEP”), and also the Deep Panuke Project. As of September 15, 2008, there
were 864,730 hectares of land in the offshore region under active exploration licenses, including
87,495 hectares under significant discovery licenses and 33,858 hectares under production license.
SOEP expenditures in Canada through December 31, 2007 on development and operations have been
$5,401.3 million, 36.5% of this amount was spent in Nova Scotia.
26
SOEP is a natural gas project located on the Scotia Shelf that commenced production on
December 31, 1999. SOEP’s natural gas production averaged 448.6 mmcf/d in 2008, and condensate
production was 62,198 cubic metres per day in 2008. The Sable Offshore Energy Project is divided
into two ‘tiers’ of offshore development. The first tier was completed in December 1999 and
involved the development of the Thebaud, North Triumph, and Venture fields, as well as the
construction of three offshore platforms, an onshore gas plant and an onshore fractionation plant.
Gas production commenced on December 31, 1999. Alma, the first Tier II platform came onstream in
late 2003 while production from South Venture, the second field began late in 2004.
A compression unit was installed on the SOEP project’s central processing platform in 2006,
and was operational in mid-November. In addition to the producing gas field, the SOEP project
includes a gas plant at Goldboro and a fractionation plant at Point Tupper. The Maritimes &
Northeast Pipeline provides transportation of SOEP gas to markets in Nova Scotia, New Brunswick,
and the northeastern United States. This pipeline originates at the “tailgate” of the gas plant in
Goldboro, Nova Scotia, continues in a westerly direction and crosses the New Brunswick-Nova Scotia
border near Tidnish, Nova Scotia.
SOEP NATURAL GAS PRODUCTION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Production (mmcf/d) |
|
|
417.6 |
|
|
|
408.2 |
|
|
|
367.1 |
|
|
|
426.0 |
|
|
|
448.6 |
|
ExxonMobil Canada Properties Ltd., Shell Canada Ltd., Imperial Oil Reserves, Pengrowth Energy
Trust and Mosbacher Operating Ltd. are interest holders in SOEP. In 1999, the project partners
signed a royalty agreement for this project with the Province. The royalty income from offshore gas
and natural gas liquids for the fiscal year 2007-08 was $399.7 million.
In October 2007, EnCana announced that its Board of Directors had approved the development of
the company’s Deep Panuke natural gas project; approximately 175 kilometres off the coast of Nova
Scotia. The natural gas will be processed on the production platform and exported to shore by a
dedicated 176 kilometer pipeline to the SOEP gas processing facility in Goldboro, and then the
natural gas will feed into the Maritime and Northeast Pipeline. EnCana has stated that its expected
projected development costs are approximately $700 million for the Deep Panuke project. Production
is expected to start in 2010, and is anticipated to continue for a mean production life of 13
years. The Deep Panuke field is expected to deliver between 200 million and 300 million cubic feet
of natural gas per day.
In October 2007, the Canada Nova Scotia Offshore Petroleum Board (“CNSOPB”) revised its
estimates of Nova Scotia’s offshore reserves to a range of between 12 and 39 trillion cubic feet of
natural gas. The total estimate of oil and natural gas liquids potential reserves in the Nova
Scotia offshore area is between 1.3 and 4.5 billion barrels.
At present, one liquefied natural gas (LNG) petrochemical plant is being proposed for Nova
Scotia. Keltic Petrochemicals has filed an environmental review for an approximately $4.5 billion
LNG/petrochemical plant in Goldboro. In March 2006, Maple LNG Limited, a corporation owned by 4Gas
North America and Suntera Canada Ltd., purchased the LNG portion of the project. Keltic has an
option to buy back the feedstock from the LNG plant for its petrochemical plant. In March 2007, the
Province of Nova Scotia granted approval to Maple LNG for the LNG importation and re-gasification
facility. Keltic Petrochemicals also received approval for the petrochemical plant. In June 2008,
the Nova Scotia Utility and Review Board approved the permit for construction of the LNG terminal
in Goldboro. The project still needs shareholder approval, which will require further work on
front-end engineering to determine more accurate development costs and scheduling.
Exploration Rights
Exploration rights are awarded for a nine-year period to the bidder making the highest work
commitment. If this amount is not spent within an initial five-year period (extendable by one year
more upon payment of $250,000), 25% of the deficiency is paid to the Provincial government. The
land is forfeited to the Crown if an
27
exploration well is not drilled within this initial period. The total exploration spending
commitment in the 16 active exploration license areas offshore Nova Scotia is $805.8 million. The
activity is split between the shallow waters near the SOEP and the much deeper waters off the edge
of the Scotian Shelf.
The total value of forfeitures to the Province of exploration licenses was $61 million
covering twelve licenses for the fiscal year 2004-2005, $43.2 million covering five licenses for
the fiscal year 2005-2006, $4.2 million covering two licenses for the fiscal year 2006-2007, and
$107.1 million for thirteen licenses for the fiscal year 2007-2008.
On April 19, 2007, the Chair of the CNSOPB announced that a second type of exploration license
would be introduced that would cover a two or three year period and have a lower cost of entry.
This measure is intended to stimulate future exploration activity. On September 18, 2007, the
CNSOPB announced a new policy for extension of exploration licenses. Companies can apply to the
CNSOPB to extend Period 1 of the exploration license annually from six years up to the legislated
maximum of nine years. The interest owner will have to pay an extension fee of $2.50 per hectare in
each year that Period 1 is extended.
On July 10, 2008, the Canada Nova Scotia Offshore Petroleum Board announced that the Board had
accepted two “Work Expenditure Bids” representing the amount of money the bidder intends to spend
exploring the land parcels during the initial five-year period of a nine-year Exploration Licence.
The bids totaled $216.8 million for the two parcels in the Nova Scotia offshore.
28
GOVERNMENT FINANCE
Overview
Under the Canadian Constitution, the Province is granted certain exclusive powers, including
the power to impose direct taxation within the province to raise revenue for Provincial purposes
and the power to borrow money on the sole credit of the Province. Certain responsibilities assigned
to the Province are, in turn, delegated to municipal governments and other local bodies within the
province, such as school boards and local service commissions, under varying degrees of Provincial
control.
Municipal governments raise their own revenues from a number of sources, the most important of
which is real property taxes, and also receive financial assistance from the Province. Municipal
borrowing powers are strictly limited; operating deficits in any given year must be recaptured
through taxation or other current revenues the following year. Municipal borrowings for capital
purposes are subject to the approval of the Minister of Service Nova Scotia and Municipal Relations
(“SNSMR”) of the Province and must be made through the Nova Scotia Municipal Finance Corporation
(See “Certain Crown Corporations and Agencies — Nova Scotia Municipal Finance Corporation”).
The receipt of public revenues, the disbursement of public funds, the control of expenditures,
and the keeping and auditing of the Public Accounts of the Province are governed by various
Provincial statutes. All receipts and disbursements of public money of the Province’s departments
and public service units flow through the Consolidated Fund. Such receipts and disbursements
consist of revenue, expenditures, and other transactions. Any net cash requirement of the
Consolidated Fund is provided for by the Province’s traditional sources of financing, including
borrowings in the public and private financial markets and internal sources.
Anticipated revenue, program expenses, capital expenditures, and debt servicing costs included
in the budgetary estimates of the Province are submitted for approval to the House of Assembly for
each fiscal year. Authority for expenditure expires at the end of each fiscal year. Funds for
expenditure may also be provided by special legislation and by order of the Lieutenant Governor in
Council pursuant to the authority of the Provincial Finance Act. Loans and investments, including
those to or on behalf of corporations and agencies owned or controlled by the Province, are
generally made pursuant to the authority and limitations of various Provincial statutes and are not
included in the annual budgetary estimates submitted to the House of Assembly for approval.
The accounts and financial operations of the Province and the financial statements of certain
crown corporations and agencies are subject to audit by the Auditor General, an official appointed
by the Lieutenant Governor in Council under the Auditor General Act. Since the fiscal year ended
March 31, 1999, the Auditor General has audited the consolidated financial statements of the
Province.
Figures shown for the fiscal year 2007-2008 are audited actual figures. On April 29, 2008 the
Minister of Finance submitted the Budget for the fiscal year 2008-2009, which is referred to herein
as “Estimate 2009”. These estimates were revised as at December 19, 2008 and such revised numbers
are referred to as “Forecast 2009”.
Specific Accounting Policies
Financial statements of the Province are prepared in accordance with Canadian generally
accepted accounting principles for the public sector, which for purposes of the Province’s
financial statements are represented by accounting recommendations of the Public Sector Accounting
Board (“PSAB”) of the Canadian Institute of Chartered Accountants (“CICA”), supplemented where
appropriate by other CICA and International Federation of Accountants accounting standards or
pronouncements.
The Government Reporting Entity
The government reporting entity is comprised of the Consolidated Fund, other Governmental
Units, Government Business Enterprises, and Government Partnership Arrangements. Governmental Units
and Government Business Enterprises represent the entities that are controlled by the Province.
Government Partnership
29
Arrangements represent entities for which decision making and significant risks and benefits
are shared with other parties outside of the Government Reporting Entity.
Principles of Consolidation
This section describes the the accounting treatment for each type of entity included in the
consolidated financial statements of the Province. A Governmental Unit is a government organization
that is not a Government Business Enterprise. Governmental Units include government departments,
public service votes, funds, agencies, service organizations, boards, government not-for-profit
organizations, and government business-type organizations. The accounts of Government Units are
consolidated on a line-by-line basis after adjusting for differences in significant accounting
policies with the exception of capitalization thresholds and depreciation methods and rates of
accounting for tangible capital assets for which no accounting policy adjustments are performed.
Significant inter-organization accounts and transactions are eliminated.
A Government Business Enterprise is a self-sustaining organization that has the financial and
operating authority to sell goods and services to individuals and non-government organizations as
its principal activity and source of revenue. Government Business Enterprises have been accounted
for on the modified equity basis that does not require any accounting policy adjustments. Net
equity of Government Business Enterprises is included in government consolidated financial
statements in the Consolidated Statement of Financial Position, while any net income or net loss is
shown as a separate line item in the Consolidated Statement of Operations and Accumulated Deficits.
The largest Government Business Enterprises, in terms of revenues, are the Nova Scotia Liquor
Corporation and the Nova Scotia Gaming Corporation.
A Government Partnership is a contractual arrangement between the government and a party or
parties outside the reporting entity. The partners have clearly defined common goals, make a
financial investment in the partnership, share control of decision-making, and share, on an
equitable basis, the significant risks and benefits associated with the operations of the
government partnership. Where significant, government’s interest in partnerships is accounted for
using proportionate consolidation.
A complete overview of the organizations within the Government Reporting Entity is available
within the Province’s Public Accounts, Volumes I and II for the fiscal year 2007-2008.
Revenues
Revenues are recorded on an accrual basis. The main components of revenue include interest,
various taxes, and legislated levies. Revenues from Personal and Corporate Income Taxes and
Harmonized Sales Taxes, are accrued in the year earned based on estimates using statistical models.
These revenues are recorded at the net amount estimated, after considering adjustments for tax
credits and administrative costs related to the collection and processing performed by the Federal
Government.
Expenses
Expenses are recorded on an accrual basis. Grants are recognized in the period during which
the grant is authorized and any eligibility criteria are met. Provisions are made for probable
losses on certain loans, investments, loan guarantees, accounts receivable, advances, forgivable
loans, and for contingent liabilities when it is likely that a liability exists and the amount can
be reasonably determined. These provisions are updated as estimates are revised, at least annually.
30
Measurement Uncertainty
Uncertainty in the determination of the amount at which an item is recorded in the Province’s
financial statements is known as measurement uncertainty. Uncertainty exists whenever estimates are
used because it is reasonably possible that there could be material difference between the
recognized amount and another reasonably possible amount.
Measurement uncertainty exists in the Province’s financial statements in the accruals for such
items as pension, retirement and other obligations, environmental remediation obligations, and
federal and provincial source revenues. The nature of the uncertainty in the accruals for pension,
retirement, and other obligations arise because actual results may differ significantly from the
Province’s various assumptions about plan members and economic conditions in the marketplace.
Uncertainty exists for environmental remediation obligations because the actual extent of
remediation activities required may differ significantly based on the actual extent of site
contamination and the chosen remediation process. Uncertainty related to Sales and Income Taxes,
petroleum royalties, Canada Health Transfer and Canada Social Transfer arises because of the
possible differences between estimated and actual economic growth assumptions used in statistical
models by the Province to accrue these revenues.
Additional accounting policies are set forth in the Notes to the Public Accounts filed as
Exhibit (2) to the Province’s Form 18-K for the fiscal year ended March 31, 2008.
Accounting Changes
There were no significant accounting policy changes made during the fiscal year 2007-2008.
Accounting policy changes and corrections were made for fiscal year 2006-2007 that increased /
decreased the Provincial Surplus, Net Direct Debt and Accumulated Deficits as follows:
Tangible Capital Assets — Gross Costs
In accordance with PSAB, a policy change was implemented to record tangible capital assets
at gross cost. This policy change was recorded on a retroactive basis. This change increased
the Provincial surplus by $18.6 million in fiscal year 2006-2007 and increased the
Provincial surplus by $10.6 million in fiscal year 2005-2006.
District Health Authorities — Supplementary Pensions
Supplementary pension arrangements for certain employees of the District Health Authorities
made in 2006-2007, with restatement for 2005-2006, which were recorded as accounts payable
have been restated to pension, retirement and other obligations and accounted for using
pension accounting. This change was recorded on a retroactive basis and had a prior period
impact in 2005-2006 of a $56,000 decrease in expenses.
Accounting policy changes and corrections were made for fiscal year 2005-2006. These changes
decreased the Provincial surplus by $0.7 million in fiscal year 2005-2006 and increased the
Provincial surplus by $4.8 million in fiscal year 2004-2005. These changes were:
School Boards — Non-teaching Retirement Allowances
The obligation for retirement allowances for non-teaching staff of the Halifax Regional and
Chignecto-central Regional School Boards was valued during the fiscal year 2005-2006 and
recorded on a retroactive basis. This change decreased the Provincial surplus by $0.2
million in fiscal year 2005-2006.
Inventory
31
Inventory held by Provincial departments has been recorded during the fiscal year 2005-2006
and applied on a retroactive basis. This change decreased the Provincial surplus by $0.7
million in fiscal year 2005-2006 and increased the Provincial surplus by $4.5 million in
fiscal year 2004-2005.
Nova Scotia Farm Loan Board
An adjustment to the reserve account was made as a result of actuarial work, which impacted
periods prior to fiscal year 2004-2005. This change had no effect on the Provincial surplus.
School Boards — Pensions
Certain school boards valued non-teaching pension obligations during the fiscal year
2005-2006. This change increased the Provincial surplus by $0.2 million in fiscal year
2005-2006 and increased the Provincial surplus by $0.3 million in fiscal year 2004-2005.
Accounting policy changes and corrections were made for fiscal year 2004-2005. These changes
increased the Provincial surplus by $4.2 million in fiscal year 2004-2005 and decreased the
Provincial surplus by $4.5 million in fiscal year 2003-2004. The most significant changes were:
Long-Term Disability Plan
The Public Sector Accounting Board (“PSAB”) recognizes two acceptable methods of valuing
plan assets, at fair market value, or at smoothed market value. In fiscal year 2004-2005,
the Province retroactively changed its policy to employ the smoothing method for the assets
of the Long-term Disability Plan. As a result, the difference between market related value
and fair market value of assets is amortized to income over a five year period.
Prepaid Expenses
Prepaid expenses of the Consolidated Fund were reclassified from accounts receivable to
prepaid expenses.
Nova Scotia Legal Aid Commission — Health and insurance benefits
The Commission offers health and insurance benefits to certain employees upon retirement.
The obligation for this plan was valued during the fiscal year 2004-2005 and recorded on a
retroactive basis.
32
The following table sets forth a summary of the accounting changes outlined above.
ACCOUNTING POLICY CHANGES IMPLEMENTATION SCHEDULE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
2005 |
|
2006 |
|
2007 |
|
2008 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy Changes 2005 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term Disability Plan |
|
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
Prepaid Expenses |
|
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
Nova Scotia Legal Aid — Health & Insurance Benefits |
|
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy Changes 2006 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
School Boards — Non-teaching Retirement Allowance |
|
|
|
|
|
|
|
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
Inventory |
|
|
|
|
|
|
|
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
Nova Scotia Farm Loan Board |
|
|
|
|
|
|
|
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
School Boards — Pensions |
|
|
|
|
|
|
|
|
|
|
X |
|
|
|
X |
|
|
|
X |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Policy Changes 2007 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tangible Capital Assets — gross costs |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X |
|
|
|
X |
|
District Health Authorities — Supplementary Pensions |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
X |
|
|
|
X |
|
The financial information with respect to the Province set forth herein has been derived from
several sources, including the consolidated financial statements of the Province. Unless otherwise
indicated, amounts shown for the fiscal years ended March 31, 2004, 2005, and 2006 have been
restated as described above. Unless otherwise indicated, amounts referred to as “forecasted for the
year ended March 31, 2009” have been taken from the fiscal year 2008-09 Forecast Update released on
December 19, 2008.
The Forecast, however, is not prepared on the same basis as the historical financial
information. Revenues and expenses in the forecast reflect only those of the Consolidated Fund. The
Provincial surplus includes results of the Consolidated Fund, consolidation and accounting
adjustments for Governmental Units, and net income for Government Business Enterprises.
33
Summary of Budget Transactions and Borrowing Requirements
SUMMARY OF OPERATIONS AND NET FUNDING REQUIREMENTS
OF THE CONSOLIDATED ENTITY (8)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated |
|
|
Restated |
|
|
Restated |
|
|
|
|
|
|
|
|
|
2004(1) |
|
|
2005(2) |
|
|
2006(3) |
|
|
2007 |
|
|
2008 |
|
|
|
(in millions) |
|
Revenues |
|
$ |
6,056.4 |
|
|
$ |
6,998.3 |
|
|
$ |
7,527.5 |
|
|
$ |
7,952.4 |
|
|
$ |
8,908.4 |
|
Program Expenses |
|
|
5,287.5 |
|
|
|
6,110.7 |
|
|
|
6,616.4 |
|
|
|
7,151.9 |
|
|
|
7,879.9 |
|
Debt Servicing Costs |
|
|
1,072.9 |
|
|
|
1,067.0 |
|
|
|
1,017.7 |
|
|
|
958.7 |
|
|
|
953.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses |
|
|
6,360.4 |
|
|
|
7,177.7 |
|
|
|
7,634.1 |
|
|
|
8,110.6 |
|
|
|
8,833.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Surplus/(Deficit) from Governmental Units |
|
|
(304.0 |
) |
|
|
(179.4 |
) |
|
|
(106.6 |
) |
|
|
(158.2 |
) |
|
|
74.8 |
|
Net Income
from Government Business Enterprises |
|
|
333.4 |
|
|
|
349.5 |
|
|
|
345.4 |
|
|
|
340.6 |
|
|
|
344.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provincial Surplus before Unusual Item |
|
|
29.4 |
|
|
|
170.1 |
|
|
|
238.8 |
|
|
|
182.4 |
|
|
|
418.9 |
|
Unusual Item (4) |
|
|
8.7 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provincial Surplus(8) |
|
|
38.1 |
|
|
|
170.1 |
|
|
|
238.8 |
|
|
|
182.4 |
|
|
|
418.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Funding Requirements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deficit/(Surplus) |
|
|
(38.1 |
) |
|
|
(170.1 |
) |
|
|
(238.8 |
) |
|
|
(182.4 |
) |
|
|
(418.9 |
) |
Non-Cash Items (5) |
|
|
(279.1 |
) |
|
|
(759.1 |
) |
|
|
(593.0 |
) |
|
|
(239.0 |
) |
|
|
(395.4 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Requirements |
|
|
(317.2 |
) |
|
|
(929.2 |
) |
|
|
(831.8 |
) |
|
|
(421.4 |
) |
|
|
(814.3 |
) |
Loan advances and Investing, net of repayments |
|
|
29.3 |
|
|
|
101.9 |
|
|
|
57.6 |
|
|
|
26.9 |
|
|
|
31.6 |
|
Acquisition of Tangible Capital Assets |
|
|
330.5 |
|
|
|
343.1 |
|
|
|
399.9 |
|
|
|
548.2 |
|
|
|
437.1 |
|
Sinking Fund Installments and Serial Retirements |
|
|
58.8 |
|
|
|
75.1 |
|
|
|
54.8 |
|
|
|
63.3 |
|
|
|
55.9 |
|
Net Refinancing Transactions(6) |
|
|
557.1 |
|
|
|
1,004.6 |
|
|
|
1,121.4 |
|
|
|
775.8 |
|
|
|
709.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Funding Requirement |
|
|
658.5 |
|
|
|
595.5 |
|
|
|
801.9 |
|
|
|
992.8 |
|
|
|
419.7 |
|
Financing of Net Funding Retirement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in Cash and Short-term Investments |
|
|
(272.9 |
) |
|
|
133.8 |
|
|
|
13.4 |
|
|
|
(481.2 |
) |
|
|
263.1 |
|
Debt Issued |
|
|
931.4 |
|
|
|
461.7 |
|
|
|
788.5 |
|
|
|
1,474.0 |
|
|
|
156.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total |
|
$ |
658.5 |
|
|
$ |
595.5 |
|
|
$ |
801.9 |
|
|
$ |
992.8 |
|
|
$ |
419.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Restated to reflect Accounting Changes during 2004-2005. See “Government Finance —
Accounting Changes. |
|
(2) |
|
Restated to reflect Accounting Changes during 2005-2006. See “Government Finance —
Accounting Changes. |
|
(3) |
|
Restated to reflect Accounting Changes during 2006-2007. See “Government Finance —
Accounting Changes. |
|
(4) |
|
Unusual items in fiscal year 2003-2004 was gains on disposal of the net assets and shares of
Nova Scotia Resources Limited. |
|
(5) |
|
Includes amortization of tangible capital assets, net proceeds on disposal of tangible
capital assets, foreign exchange amortization, net income from Government Business
Enterprises, changes in receivables, payables, and other non-cash items, and sinking fund
earnings, which are retained in the Sinking Funds and Public Debt Management Fund, and are not
available for general purposes, profit distribution from Government Business Enterprises and
foreign currency swaps and adjustments. Also includes the draw downs from sinking funds and
the Public Debt Management Fund. |
|
(6) |
|
Net Refinancing Transactions consist of proceeds from Sinking Funds and Repayment of
Debentures and Other Long-term obligations. |
|
(7) |
|
For 2005, 2006, 2007 and 2008, there are recoveries, fees and other charges that were
reclassified. For 2004, these amounts are netted against expenses, for 2005, 2006, 2007 and
2008 they are included as revenue. Due to this change the 2004 numbers are not directly
comparable to the 2005 to 2008 numbers. |
|
(8) |
|
As of December 19, 2008, the Province is forecasting a surplus of $212.9 million for fiscal
year 2008-2009. |
34
For the fiscal year 2007-2008, the Province recorded a surplus of $418.9 million. Revenues
totaled $8,908.4 million, expenses were $8,833.6 million, the surplus from Government Units was
$74.8 million, and Net Income from Government Business Enterprises was $344.2 million.
For the fiscal year 2006-2007, the Province recorded a surplus of $182.4 million. Revenues
totaled $7,952.4 million; expenses were $8,110.6 million resulting in a deficit from Government
Units of $158.2 million. Net Income from Government Business Enterprises was $340.6 million.
For the fiscal year 2005-2006, the Province initially recorded a surplus of $228.1 million. As
a result of certain accounting policy changes and corrections made in fiscal year 2006-2007, the
fiscal year 2005-2006 surplus was restated to $238.8 million, an increase of $10.7 million.
For the fiscal year 2004-2005, the Province initially recorded a surplus of $165.3 million. As
a result of certain accounting policy changes and corrections made in fiscal year 2005-2006, the
2004-2005 surplus was restated to $170.1 million, an increase of $4.8 million.
For fiscal year 2003-2004, the Province initially recorded a surplus of $42.6 million. As a
result of certain accounting policy changes and corrections made in fiscal year 2004-2005, the
2003-2004 surplus was restated to $38.1 million, a decrease of $4.5 million.
35
Revenue
The following table sets forth the revenue, by source, of the Consolidated Fund, as described
in “Government Finance — Specific Accounting Policies” above, for fiscal years 2004, 2005, 2006,
2007 and 2008, and the Budget Estimate for the fiscal year ending March 31, 2009, each adopting the
accounting policies, other than consolidation of government entities, described in “Government
Finance — Specific Accounting Policies” and “Government Finance — Accounting Changes” above.
REVENUE BY SOURCE FOR CONSOLIDATED FUND (1)(2)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated |
|
|
Restated |
|
|
Restated |
|
|
|
|
|
|
|
|
|
|
Budget |
|
|
|
2004 |
|
|
2005 |
|
|
2006(3) |
|
|
2007(3) |
|
|
2008(3) |
|
|
2009(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provincial Sources: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Taxes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Income Taxes |
|
$ |
1,350.1 |
|
|
$ |
1,462.3 |
|
|
$ |
1,568.4 |
|
|
$ |
1,679.0 |
|
|
$ |
1,778.4 |
|
|
$ |
1,828.7 |
|
Corporate Income Taxes |
|
|
252.3 |
|
|
|
329.1 |
|
|
|
361.5 |
|
|
|
392.6 |
|
|
|
389.5 |
|
|
|
415.9 |
|
Sales Taxes |
|
|
975.2 |
|
|
|
1,031.1 |
|
|
|
1,057.8 |
|
|
|
1,090.8 |
|
|
|
1,074.9 |
|
|
|
1,151.0 |
|
Tobacco Taxes |
|
|
161.7 |
|
|
|
178.3 |
|
|
|
163.6 |
|
|
|
145.1 |
|
|
|
145.6 |
|
|
|
138.1 |
|
Motive Fuel Taxes |
|
|
249.9 |
|
|
|
249.2 |
|
|
|
248.3 |
|
|
|
245.6 |
|
|
|
249.2 |
|
|
|
246.9 |
|
Interest Revenues |
|
|
69.3 |
|
|
|
70.5 |
|
|
|
81.1 |
|
|
|
81.9 |
|
|
|
87.9 |
|
|
|
81.8 |
|
Registry of Motor Vehicles |
|
|
77.5 |
|
|
|
86.7 |
|
|
|
88.2 |
|
|
|
92.0 |
|
|
|
99.1 |
|
|
|
98.1 |
|
Offshore Royalties |
|
|
24.1 |
|
|
|
28.2 |
|
|
|
123.9 |
|
|
|
269.1 |
|
|
|
399.7 |
|
|
|
513.8 |
|
Offshore Licenses Forteitures |
|
|
1.2 |
|
|
|
61.0 |
|
|
|
43.2 |
|
|
|
4.2 |
|
|
|
107.1 |
|
|
|
— |
|
Other Provincial Sources |
|
|
235.6 |
|
|
|
246.9 |
|
|
|
299.5 |
|
|
|
277.2 |
|
|
|
304.0 |
|
|
|
284.3 |
|
TCA Cost Shared Revenue |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
4.5 |
|
|
|
2.7 |
|
Prior Years Adjustment |
|
|
124.7 |
|
|
|
(63.3 |
) |
|
|
16.4 |
|
|
|
13.0 |
|
|
|
85.8 |
|
|
|
— |
|
Fees & Other Charges |
|
|
67.7 |
|
|
|
60.6 |
|
|
|
60.9 |
|
|
|
64.7 |
|
|
|
56.4 |
|
|
|
60.8 |
|
Ordinary Recoveries |
|
|
217.6 |
|
|
|
191.4 |
|
|
|
254.1 |
|
|
|
247.3 |
|
|
|
261.9 |
|
|
|
254.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinking Fund Earnings |
|
|
183.6 |
|
|
|
143.2 |
|
|
|
124.4 |
|
|
|
121.6 |
|
|
|
112.8 |
|
|
|
114.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Provincial Sources |
|
|
3,990.5 |
|
|
|
4,075.1 |
|
|
|
4,491.4 |
|
|
|
4,724.0 |
|
|
|
5,156.7 |
|
|
|
5,191.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Federal Sources: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equalization |
|
|
1,114.5 |
|
|
|
1,321.8 |
|
|
|
1,343.5 |
|
|
|
1,385.5 |
|
|
|
1,464.5 |
|
|
|
1,464.9 |
|
CHST |
|
|
686.9 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Canada Health Transfer |
|
|
— |
|
|
|
484.5 |
|
|
|
581.0 |
|
|
|
610.5 |
|
|
|
639.0 |
|
|
|
664.2 |
|
Canada Social Transfer |
|
|
— |
|
|
|
244.9 |
|
|
|
255.0 |
|
|
|
264.3 |
|
|
|
280.4 |
|
|
|
296.9 |
|
Crown Share |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
234.4 |
|
|
|
— |
|
Wait Times Reduction Fund |
|
|
— |
|
|
|
18.3 |
|
|
|
18.2 |
|
|
|
34.7 |
|
|
|
34.4 |
|
|
|
— |
|
Health Reform Fund |
|
|
29.6 |
|
|
|
44.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Offshore Offset |
|
|
— |
|
|
|
34.0 |
|
|
|
4.0 |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
Offshore Oil & Gas Payments |
|
|
— |
|
|
|
— |
|
|
|
57.1 |
|
|
|
57.4 |
|
|
|
68.2 |
|
|
|
105.9 |
|
Other Federal Sources |
|
|
2.3 |
|
|
|
2.3 |
|
|
|
2.3 |
|
|
|
2.3 |
|
|
|
5.7 |
|
|
|
57.1 |
|
C48 Infrastrurture Funds |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.5 |
|
|
|
43.1 |
|
|
|
38.8 |
|
C52 Trust Funds |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.7 |
|
|
|
24.5 |
|
TCA Cost Shared Revenue |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
22.5 |
|
|
|
31.2 |
|
|
|
62.4 |
|
Prior Years’ Adjustments |
|
|
(2.6) |
) |
|
|
25.1 |
|
|
|
5.0 |
|
|
|
6.7 |
|
|
|
12.3 |
|
|
|
— |
|
Ordinary Recoveries |
|
|
177.4 |
|
|
|
162.4 |
|
|
|
162.1 |
|
|
|
183.1 |
|
|
|
206.7 |
|
|
|
201.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Federal Sources |
|
|
2,008.1 |
|
|
|
2,337.3 |
|
|
|
2,428.2 |
|
|
|
2,569.5 |
|
|
|
3,022.6 |
|
|
|
2,916.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Revenue |
|
$ |
5,998.6 |
|
|
$ |
6,412.5 |
|
|
$ |
6,8919.6 |
|
|
$ |
7,293.5 |
|
|
$ |
8,179.2 |
|
|
$ |
8,107.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
36
|
|
|
(1) |
|
Revenue by source is presented for the Province’s Consolidated Fund. This information does
not include the revenues from other Governmental Units, Government Business Enterprises, and
Government Partnership Arrangements. The revenues and expenses of these entities are included
within statements prepared for the Consolidated Entity. (See “Government Finance — Summary of
Budget Transactions and Borrowing Requirements”.) |
|
(2) |
|
The net revenues from the Nova Scotia Gaming Corporation and the Nova Scotia Liquor
Corporation have been reclassified from Ordinary Revenue to Net Income from Government
Business Enterprises. However, net income from GBE’s is not included in this table. The Casino
Win Tax continues to be reported in the Consolidated Fund under ordinary revenue, other
provincial sources. |
|
(3) |
|
For 2005, 2006, 2007 and 2008, there are recoveries, fees and other charges that were
reclassified. For 2004, these amounts are netted against expenses, for 2005, 2006, 2007 and
2008 they are included as revenue. Due to this change the 2004 numbers are not directly
comparable to the 2005 to 2008 numbers. See “Government Finance — Summary of Budget
Transactions and Borrowing Requirements. |
Provincial Sources
Provincial own-source revenues of the Consolidated Fund for fiscal year 2007-2008 totaled
$5,156.7 million (representing 63.0% of the Province’s total revenues) and are budgeted to be
$5,191.2 million for fiscal year 2008-2009, representing 64.0% of the Province’s revenues. The
largest of the Province’s own-source revenues, Personal Income Taxes, totaled $1,778.4 million in
fiscal year 2007-2008 and are budgeted to increase to $1,828.7 million for 2008-2009. The second
largest own-source revenue, Harmonized Sales Tax (“HST”), totaled $1,074.9 million for 2007-2008
and is budgeted to increase to $1,151.0 million for fiscal year 2008-2009.
The Federal Government collects a number of taxes on behalf of the Province, including
personal and corporate income taxes, Large Corporations Tax (capital tax), and the HST.
In fiscal year 1999-2000, the Province moved to a tax on income, or TONI, system for personal
income tax. Prior to this change, provincial personal income tax was calculated as a percentage of
Basic Federal Tax. The provincial tax on income is calculated on federally defined taxable income,
and consists of four income tax brackets and a high income surtax. The rate for the first bracket,
on taxable income up to $29,590, stands at 8.79%. The rates on the second (taxable income between
$29,591 and $59,180) and third (taxable income between $59,181 and $93,000) brackets are 14.95% and
16.67% respectively. The fourth bracket for income above $93,000 was added in 2004 with a rate of
17.5%. There is a surtax of 10% of provincial tax in excess of $10,000.
As a part of the 2006-2007 Budget, the Province announced personal income tax relief in the
form of an increase in the Basic Personal Amount, which is a credit, of $250 per year each of the
next four years beginning as of January 1, 2007. By the 2010 tax year the Basic Personal Amount
will be $8,231, an increase of 13.8% from 2006 levels. Nova Scotia will also increase
non-refundable tax credits including amounts for spouse, dependents, pension income, disability,
caregiver, age and infirm dependents age 18 or over. In 2011 and beyond, the Basic Personal Amount
and non-refundable credits will be indexed, starting at 2%. The Province also introduced a graduate
tax credit for post-secondary education students, a Child Care Benefit Tax Credit, and increased
the value of the Healthy Living Tax Credit. These personal income tax measures were expected to
reduce tax paid by Nova Scotia taxpayers by $112.9 million between 2006-2007 and 2009-2010.
The general corporate income tax rate is 16% of the corporate taxable income earned in Nova
Scotia. A small business rate of 5% applies to the first $400,000 of active business income for
Canadian Controlled Private Corporations. As of July 1, 2008 the Large Corporations Tax (LCT) has
been reduced to 0.20%. This tax applies to taxable paid up capital of corporations with capital in
excess of $10 million; the tax is phased in for corporations with paid up capital between $5
million and $10 million. The Large Corporations Tax will continue to be phased out until 2012 when
it will be completely eliminated. The capital tax rate for financial institutions is 4%.
On April 1, 1997, a harmonized sales tax (“HST”) was implemented in Nova Scotia, replacing the
Health Services Tax (11%) and incorporating the Federal Goods and Services (“GST”) of 7%, which has
subsequently been reduced to 5%. The HST is a combined Federal and Provincial tax and is collected
by the Canada Revenue Agency. Revenues are shared with the Province, with the Provincial component
of the HST at 8% out of the 13% collected.
The HST is a value-added tax levied on most goods and services purchased in Nova Scotia.
Certain items such as basic groceries and exports are zero-rated, while others such as residential
rents are exempt. The Province provides consumer rebates on the Provincial component of the HST for
books, new home construction, tourism,
37
volunteer fire departments, and heritage properties. Rebates are also available to
municipalities, universities, schools, and hospitals.
Federal Sources
Federal sources are made up of three major transfers, Equalization ($1,464.5 million in
2007-08), the Canada Health Transfer (“CHT”, $639.0 million in 2007-08) and the Canada Social
Transfer (“CST”, $280.4 million in 2007-08). Equalization, CHT and CST are budgeted to be $1,464.9,
$664.2, and $296.9 million respectively, for the fiscal year 2008-2009.
Equalization is an unconditional Federal Government transfer that is paid out of Federal
Government resources. First introduced in Canada in 1957, Equalization was subsequently entrenched
in the Constitution Act, 1982. Until a new framework agreement in 2004-2005, Equalization was
calculated by comparing the fiscal capacity of a province, based on 33 tax bases, to a
representative standard. This standard was made up of five provinces: Quebec, Ontario,
Saskatchewan, Manitoba and British Columbia. If a province’s fiscal capacity was below the per
capita capacity of the standard, that province would receive Equalization entitlements. If the
province’s fiscal capacity was above the per capita capacity of the standard, it would not receive
Equalization entitlements
The Equalization program has traditionally been renewed every five years, with the exception
of the 1992 renewal that was for two years only. The 2004 Renewal was never implemented because a
Transitional Approach was agreed upon at a First Ministers’ Meeting in September 2004 to allow the
Federal Government an opportunity to develop a new framework for the program. The Transitional
Approach included increasing the total entitlement to Equalization receiving provinces by $1,148
million to a total of $10 billion in the 2004-2005-entitlement year. In addition, the total
entitlement to the Equalization receiving provinces was established at $10.9 billion for 2005-2006,
and would increase by 3.5% per annum in each subsequent year. Equalization payments were based on
50 percent of a Province’s three-year average of entitlements and 50 percent of a Province’s
three-year average of fiscal capacity. Equalization payments for 2005-06 and 2006-07 were set out
in Federal Government legislation.
The Offshore Offset Agreement (Offshore Accord) between the Federal Government and the
Province of Nova Scotia was signed in February 2005. Essentially, the agreement was to protect
Nova Scotia’s offshore natural resource revenues from clawbacks under the Equalization program by
providing an offset payment for the difference between Equalization payments with Nova Scotia’s
offshore natural resources included and Equalization payments with these resources excluded. This
arrangement had an estimated value of $1.1 billion at current expected production levels. On June
30, 2005, Nova Scotia received an $830 million advance cash payment from the Federal Government.
The Province accounts for the annual value of the offset payment on an accrual basis until the $830
million is fully accounted for. The Province has recognized revenues under the Offshore Accord of
$57.1 million in 2005-2006, $57.4 million in 2006-2007, $68.2 million in 2007-2008, and will
recognize $105.9 million in 2008-2009.
As a part of Federal Budget 2006, the Federal Government committed to resolving the issue of
fiscal imbalance including a principled-based, formula driven Equalization program. The Federal
Budget documents indicated that the resolution to this issue would be guided by three reports
including a Federal budget discussion paper on fiscal imbalance, the Council of the Federation
Advisory Panel on Fiscal Imbalance and the Report of the Expert Panel on Equalization. The Federal
Budget 2007 tabled on March 19, 2007 adopted the approach recommended by the Expert Panel on
Equalization to resolve the fiscal imbalance. The new formula compares the fiscal capacity of a
province to the average fiscal capacity of all provinces (a so-called “ten province” standard)
using five tax bases and is calculated based on a three-year weighted moving average. The new
formula was intended to make payments under the Equalization program more predictable. A province
that is below the national average fiscal capacity receives an Equalization payment while a
province above the national average fiscal capacity does not. In addition, a fiscal capacity “cap”
was introduced to ensure that no Equalization-receiving province would have a fiscal capacity
greater than the lowest fiscal capacity of the non-Equalization-receiving provinces. In 2008-2009
the seven provinces that receive Equalization entitlements are Newfoundland and Labrador, Prince
Edward Island, Nova Scotia, New Brunswick, Quebec, Manitoba and Saskatchewan. Nova Scotia has the
second highest fiscal capacity of the four provinces of Atlantic Canada. Under the Expert Panel
approach, Nova Scotia’s entitlement in 2007-2008 was $1,464.5 million, and is $1,464.9 million in
2008-2009.
38
Under the implementation of the Expert Panel on Equalization, Nova Scotia and Newfoundland &
Labrador were also provided with an option to use the 2004 Renewal formula, which included the
benefits of the Offshore Accord Agreements. The two provinces were permitted to elect to opt into
the Expert Panel approach in any fiscal year. However, once the Expert Panel approach was selected,
the 2004 Renewal formula would no longer be an option. Following several months of discussions, on
October 10, 2007, the Province and the Federal Government agreed upon a “clarification” of the
understanding that Nova Scotia is to be the principal beneficiary of its offshore natural
resources. The clarification enables the Province to opt into the Expert Panel approach commencing
in 2008-09 and provides a cumulative “best-of” guarantee to ensure that the Province will in the
future be treated as favorably as under the formula in place when the Offshore Accord was signed in
2005 (the Transitional Approach) over the life of the Offshore Accord. If the cumulative total of
Equalization payments under the Expert Panel approach is less than the cumulative total of
Equalization payments the Province would have received under the Transitional Approach formula, the
Federal Government will make a payment representing the difference to the Province.
As part of the October 10, 2007 clarification, the Province and the Federal Government have
also agreed to allow a joint independent panel to determine the value of the Crown Share Adjustment
Payments due to the Province. This payment arose under Canada’s National Energy Program (“NEP”),
enacted by the Government of Canada in 1980. That energy policy reserved to Canada a 25 per cent
share interest with respect to oil and gas resource projects, referred to as the “Federal Crown
Share”. In 1982, the Province agreed to set aside ownership claims regarding offshore resources in
exchange for financial compensation. Nova Scotia, having entered into the 1982 “Canada-Nova Scotia
Offshore Agreement” with Canada, would receive financial compensation in a 6.25 per cent and 12.5
per cent share of Canada’s interest in oil and gas field projects, respectively. This was referred
to as Nova Scotia’s “Crown Share”. With the dismantling of the NEP in 1985 and subsequent repeal of
Nova Scotia’s “Crown Share” interests, the “Canada—Nova Scotia Offshore Petroleum Resources
Accord”, signed by Nova Scotia and the Federal Government in 1986, introduced the Crown Share
Adjustment Payments (“CSAP”). This was to ensure that, “Nova Scotia receive financial benefits
equivalent to those it would have achieved had it exercised its Crown Share options”. With respect
to CSAP, Part VIII of the 1988 Federal Government legislation implementing the 1986 Accord provided
that Canada would pay to Nova Scotia an amount equal to at least 75 per cent of the “deemed profit”
in respect of a project.
On July 13, 2008, the Federal Government accepted the recommendation of the independent panel.
The Federal Government will pay the Province of Nova Scotia $234.4 million for past payments up to
March 31, 2008. There will be future payments under the Crown Share Adjustment Payment for SOEP,
Deep Panuke and any other offshore development. The independent panel estimates the value of
payments for future years for SOEP and Deep Panuke to be approximately $633 million. Of the initial
funds, the Province has contributed a total of about $70 million to three separate trust funds
expensed in 2007-2008. The remaining $164.4 million was posted as a surplus in 2007-2008. These
payments will not reduce Nova Scotia’s Equalization payments, including the application of the
fiscal capacity cap, in any particular year, now or in the future.
The Federal Government in November 2008 announced that the annual expenditure growth in the
Equalization program would be limited to the change in the three-year moving average of nominal
gross domestic product. Furthermore, the fiscal capacity cap will be set at the average
post-Equalization fiscal capacity of the Equalization-receiving provinces. Transition payments will
be provided for 2009-2010 to ensure that a province that receives Equalization in that year does
not see a decline in its payments. As a result, the Equalization payment to Nova Scotia in
2009-2010 has been established at $1,645 million. The Federal Government must enact legislation to
facilitate these changes.
The Canada Health Transfer (“CHT”) and the Canada Social Transfer (“CST”), previously combined
as the Canada Health and Social Transfer (“CHST”) prior to 2004-2005, are the Federal Government’s
contribution to the Province in respect of its health care, post-secondary education, early
childhood development and social service programs. The amount of Federal assistance does not bear a
direct relationship to actual program costs.
On September 16, 2004, the Provincial and Territorial governments reached an agreement with
the Federal Government for additional Federal assistance with respect to provincial and territorial
health care programs. Under
39
this agreement, the Federal Government will provide an additional $41.3 billion by 2013-2014.
The national pool for CHT was set at $19.0 billion for fiscal year 2005-06 with an annual escalator
mechanism of 6.0% from 2006-2007 through to 2013-14. In the 2007 Federal Budget, the Federal
Government announced an intention to move to a straight per capita funding mechanism when CHT
legislation expires in 2013-14. Currently, the allocation of funding across provinces is based
partially on a per capita calculation and partially on a complex tax points’ formula.
The 2007 Federal Budget provided an increase in funding to the CST program of $1.0 billion in
2007-2008 and legislated annual 3.0% increases in funding starting in 2009-2010. The amount of
Federal assistance under the CST is not determined in relation to actual program cost; starting in
fiscal year 2007-2008 it is allocated on an equal per capita cash basis.
The Province of Nova Scotia has also benefitted from trusts established by the Federal
Government to transfer a portion of the annual Federal Budget surplus to provinces for specific
purposes. In 2006, the Federal Government announced that it would set up five trust funds to
address immediate provincial pressures in the areas of post-secondary education, infrastructure,
public transit, affordable housing, northern housing, and off-reserve Aboriginal housing. A total
of $3.3 billion was transferred to the provinces and territories. Nova Scotia received $85.4
million over three fiscal years, commencing in 2006-07 and ending in 2008-09. Nova Scotia recorded
$2.4 million of this revenue in 2006-2007, $43.1 million in 2007-2008 and will defer the
recognition of the remainder until departmental spending plans are approved and eligible expenses
incurred.
In the 2007 Federal Budget three additional trusts were established for HPV Immunization ($300
million), Patient Wait Times Guarantee ($612 million), and an ecoTrust for Clean Air and Climate
Change ($1.5 billion). Nova Scotia will receive $75.1 million from these trusts over the period of
three fiscal years: 2007-08 to 2009-10. The revenue will be deferred until departmental spending
plans are approved and eligible expenses incurred.
The Federal Government provides to provinces a stabilization formula under the
Federal-Provincial Fiscal Arrangements Act. This legislation provides for Federal grants and
interest-free loans to a province if revenue from the province’s own-sources plus equalization
falls below 95% of the previous year’s level, excluding variations of natural resource revenue. The
Federal-Provincial Fiscal Arrangements Act also provides a limited guarantee arrangement to
compensate provinces for certain losses incurred during the calendar year in which a national
personal income tax change results in provincial income tax reductions.
The Federal Government periodically refines and adjusts prior years’ estimates of
Equalization, CHST, CHT, CST, HST and income tax payments. Prior years’ adjustments from both
Federal and Provincial sources in 2003-2004 were a positive $142.9 million; in 2004-2005 a negative
$38.2 million; a positive $21.4 million in 2005-2006; a positive $19.7 million in 2006-2007; and a
positive $98.1 million in 2007-2008.
40
Program Expenditures / Expenses
The Provincial Finance Act requires the tabling of balanced budgets. If a deficit is incurred,
the Minister of Finance must file a report with the House of Assembly. Any deficit that is incurred
in one fiscal year must be recovered by the end of the following fiscal year; other than that
caused by a natural or other unanticipated disaster, a sale or restructuring of a
government-controlled entity, or debt servicing costs in excess of the budgeted amount.
The Province introduced a Debt Reduction Plan in 2003, with related legislation in 2004 that
added specific provisions for ongoing debt reduction. The goal of the plan was to reduce the Net
Direct Debt starting in fiscal year 2007-2008. The 2005 Debt Reduction Plan built on the 2003 Plan
and incorporates the new circumstances created by the Offshore Offset payment of $830 million.
Specifically:
|
• |
|
the Offshore Offset cash payment was used to retire cash debt when it was
received in 2005; |
|
|
• |
|
the various debt retirement and management funds were combined into a Public
Debt Management Fund, which will be maintained for the purpose of managing the
public debt; |
|
|
• |
|
the Province is required to produce surpluses at least equal to the amount
recognized in accordance with GAAP as revenue earned from the $830 million Offshore
Offset payment in each of the next eight years, 2005-2006 to 2011-2012 inclusive;
and, |
|
|
• |
|
the Province is required to place extraordinary revenue into the Public Debt
Management Fund. |
The Federal Government has paid the Province of Nova Scotia $234.4 million for past Crown
Share Adjustment Payments up to March 31, 2008. The Province has posted the Crown Share Adjustment
Payments as a surplus as follows: 1) the Province contributed a total of about $70 million to three
separate trust funds (projects for the offshore, protected lands and university infrastructure)
that were expensed in fiscal year 2007-2008, and the remaining $164.4 million was posted as a
surplus in 2007-2008, and 2) the future payments under the Crown Share Adjustment Payment for SOEP,
Deep Panuke and any other offshore development will be posted as a surplus. The independent panel
estimates the value of payments for future years for SOEP and Deep Panuke to be approximately $633
million.
The following table sets forth the expenses by department, interest on public debt,
restructuring costs, and pension valuation adjustment of the Consolidated Fund for the fiscal years
2004, 2005, 2006, 2007 and 2008 and the Budget Estimate for the fiscal year ending March 31, 2009.
All columns in the table below have been restated for all accounting policy changes.
41
EXPENSES BY DEPARTMENT FOR CONSOLIDATED FUND (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ending March 31 |
|
|
|
Restated |
|
|
Restated |
|
|
Restated |
|
|
|
|
|
|
|
|
|
|
Budget |
|
|
|
2004(2) |
|
|
2005(3) |
|
|
2006(4) |
|
|
2007 |
|
|
2008 |
|
|
2009(5) |
|
|
|
(in millions) |
|
Agriculture |
|
$ |
57.2 |
|
|
$ |
62.4 |
|
|
$ |
57.5 |
|
|
$ |
54.7 |
|
|
$ |
76.1 |
|
|
$ |
59.6 |
|
Community Services |
|
|
760.0 |
|
|
|
775.4 |
|
|
|
792.7 |
|
|
|
818.0 |
|
|
|
870.3 |
|
|
|
912.6 |
|
Economic Development |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
71.7 |
|
|
|
99.7 |
|
|
|
91.6 |
|
Education |
|
|
1,024.5 |
|
|
|
1,053.4 |
|
|
|
1,111.0 |
|
|
|
1,187.0 |
|
|
|
1,230.0 |
|
|
|
1,261.7 |
|
Assistance to Universities |
|
|
221.8 |
|
|
|
235.2 |
|
|
|
232.0 |
|
|
|
268.7 |
|
|
|
422.6 |
|
|
|
230.5 |
|
Energy |
|
|
6.5 |
|
|
|
8.4 |
|
|
|
21.7 |
|
|
|
17.0 |
|
|
|
44.3 |
|
|
|
21.8 |
|
Environment |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44.6 |
|
Environment & Labor |
|
|
37.1 |
|
|
|
39.2 |
|
|
|
39.9 |
|
|
|
40.9 |
|
|
|
72.0 |
|
|
|
— |
|
Finance |
|
|
14.3 |
|
|
|
13.8 |
|
|
|
30.1 |
|
|
|
20.1 |
|
|
|
28.0 |
|
|
|
29.9 |
|
Fisheries & Aquaculture |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
6.2 |
|
|
|
6.9 |
|
|
|
7.5 |
|
Health |
|
|
2,265.4 |
|
|
|
2,465.9 |
|
|
|
2,720.3 |
|
|
|
2,898.4 |
|
|
|
3,013.9 |
|
|
|
3,205.9 |
|
Health Protection & Promotion |
|
|
— |
|
|
|
— |
|
|
|
34.7 |
|
|
|
50.3 |
|
|
|
68.2 |
|
|
|
87.5 |
|
Justice |
|
|
187.1 |
|
|
|
193.0 |
|
|
|
206.7 |
|
|
|
215.5 |
|
|
|
235.0 |
|
|
|
262.2 |
|
Labor & Workforce Development |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
62.4 |
|
Natural Resources |
|
|
59.7 |
|
|
|
58.4 |
|
|
|
66.7 |
|
|
|
69.1 |
|
|
|
87.5 |
|
|
|
84.6 |
|
Public Service |
|
|
222.4 |
|
|
|
170.7 |
|
|
|
185.1 |
|
|
|
117.1 |
|
|
|
132.8 |
|
|
|
156.4 |
|
Seniors |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
2.1 |
|
Service NS & Municipal Relations |
|
|
124.5 |
|
|
|
135.5 |
|
|
|
170.4 |
|
|
|
194.7 |
|
|
|
237.0 |
|
|
|
254.5 |
|
Tourism & Culture |
|
|
46.0 |
|
|
|
59.2 |
|
|
|
51.7 |
|
|
|
54.7 |
|
|
|
57.4 |
|
|
|
56.7 |
|
Transportation & Infrastructure Renewal |
|
|
250.8 |
|
|
|
267.1 |
|
|
|
277.4 |
|
|
|
297.4 |
|
|
|
366.3 |
|
|
|
350.9 |
|
Restructuring Costs |
|
|
12.6 |
|
|
|
64.9 |
|
|
|
90.7 |
|
|
|
116.0 |
|
|
|
56.7 |
|
|
|
177.7 |
|
Gain on disposal of assets |
|
|
— |
|
|
|
(2.8 |
) |
|
|
(0.4 |
) |
|
|
(2.0 |
) |
|
|
(4.2 |
) |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Department Expenses |
|
|
5,289.9 |
|
|
|
5,599.7 |
|
|
|
6,088.2 |
|
|
|
6,495.4 |
|
|
|
7,100.6 |
|
|
|
7,360.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Valuation Adjustment |
|
|
(12.3 |
) |
|
|
6.2 |
|
|
|
30.3 |
|
|
|
83.1 |
|
|
|
107.5 |
|
|
|
67.6 |
|
Debt Servicing Costs |
|
|
1,039.7 |
|
|
|
1,033.7 |
|
|
|
987.9 |
|
|
|
929.8 |
|
|
|
924.9 |
|
|
|
904.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Expenses |
|
$ |
6,317.3 |
|
|
$ |
6,639.6 |
|
|
$ |
7,106.4 |
|
|
$ |
7,508.4 |
|
|
$ |
8,133.0 |
|
|
$ |
8,333.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Expenses by department are presented for the Consolidated Fund. The cost of tangible capital
assets are capitalized and amortized to Expenses over the useful life of the assets. This
information does not include the expenses from other Governmental Units, Government Business
Enterprises, or Government Partnership Arrangements. The revenue and expenses of the entities
are included within statements prepared for the Consolidated Entity. See “Government Finance
— Summary of Budget Transactions and Borrowing Requirements.” |
|
(2) |
|
Restated to reflect changes in accounting policies during fiscal year 2004-2005. See
“Government Finance —Accounting Changes.” |
|
(3) |
|
Restated to reflect changes in accounting policies during fiscal year 2005-2006. See
“Government Finance —Accounting Changes.” |
|
(4) |
|
Restated to reflect changes in accounting policies during fiscal year 2006-2007. See
“Government Finance —Accounting Changes.” |
|
(5) |
|
Forecast Expenses for the fiscal year 2008-2009 are from the Budget, April 29, 2008. |
Departmental expenses, consisting of program expenses and the amortization of tangible capital
assets, were $7,100.6 million for fiscal year 2007-2008 and are budgeted to be $7,360.9 million for
fiscal year 2008-2009. Departmental expenses at the December 19, 2008 Forecast Update were
projected to have declined to $7,349.3 million.
Health, Education, and Social Services
42
Health (including Health Protection & Promotion) and education (including Assistance to
Universities) are the two largest areas of expense from the Consolidated Fund. These amounts
totaled $3,082.1 million and $1,652.6 million, respectively, for the fiscal year ended March 31,
2008, and are estimated to be $3,293.4 million and $1,492.2 million, respectively, for the fiscal
year 2008-2009.
In the field of health care, the Province administers a universal and comprehensive medical
services and hospital care plan, a dental care program for residents less than 10 years of age, and
provides pharmaceutical services for residents 65 years of age and over and Nova Scotians with no
other health coverage. In the field of education, the Province makes grants to school boards and
community colleges, and assists universities through operating grants.
Community Services include the provision of direct assistance to persons with disabilities and
other disadvantaged individuals and families who require long-term assistance, residential care for
persons with disabilities, short-term social assistance, and the provision of direct service to the
public. Community Services expenses from the Consolidated Fund totaled $870.3 million for the
fiscal year ending March 31, 2008, and are estimated to be $912.6 million for the fiscal year
2008-2009.
Resource and Industrial Development
The Province is engaged in a wide range of resource and industrial development activities,
including direct assistance grants, development and maintenance of natural resources, and
consulting services to industry (Agriculture, Economic Development, Fisheries & Aquaculture, and
Natural Resources). Expenses from the Consolidated Fund in these areas totaled $270.2 million for
the fiscal year ending March 31, 2008, and are estimated to be $243.3 million in fiscal year
2008-2009. The Province also provides loans directly and through agencies to assist the primary,
manufacturing, and services industries.
Public Service
The Province provides a number of essential services, statutory or other, which are necessary
for the efficient and/or effective operation of government. There are also programs and activities
that provide a benefit to the whole of government but cannot be specifically identified with any
other function. Public Service expenses from the Consolidated Fund are estimated to increase from
$132.8 million in the fiscal year ending March 31, 2008 to $156.4 million in fiscal year 2008-2009
primarily due to the decision to centralize the human resource function to the Public Service
Commission from individual departments.
Justice
The Province is engaged in activities for the provision of protection of a legal nature to
persons and property; public services of a general nature, which lead to a higher degree of
personal safety; and the protection of the environment. Expenses from the Consolidated Fund for
Justice were $235.0 million in the fiscal year ending March 31, 2008 and are estimated to be $262.2
million in fiscal year 2008-2009. The continued increase in contributions to the costs of municipal
policing formed a large part of this increase in expense requirements.
Transportation and Infrastructure Renewal
The Province is engaged in a wide range of activities to facilitate the effective and
efficient movement of persons and property and general communications between people with the
associated dispersal of knowledge. Transportation and Infrastructure Renewal expenses from the
Consolidated Fund are estimated to decrease from $366.3 million in the fiscal year ending March 31,
2008 to $350.9 million in fiscal year 2008-2009.
Service Nova Scotia & Municipal Relations
The Province supports municipalities through provision of advice and assistance, and
administration of a variety of grant programs. Expenses for the year ending March 31, 2008 were
$237.0 million and are estimated to increase to $254.5 million in fiscal year 2008-2009 primarily
due to increased grants to municipalities for public transit and infrastructure, and the
introduction of a new program to provide assistance to low income households for heating oil costs.
43
Loans and Investments
Under the authority of various Provincial statutes, the Province provides loans to, and makes
investments in, its own corporations and agencies, and other entities. The loans and investments
relate to programs for the promotion of resource and industrial development, the provision of
low-cost and senior-citizen housing and the provision of funding for various Crown agencies and
municipalities. Loans are repayable, and assets of Government-owned or other entities support
investments.
The following table sets forth the balances of loans and investments of the Province for the
Consolidated Entity, net of allowances for un-collectable amounts adopting the accounting policies
described in “Government Finance — Specific Accounting Policies” above.
LOANS AND INVESTMENTS FOR CONSOLIDATED ENTITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at March 31, 2008 |
|
|
|
(in millions) |
|
|
|
Gross |
|
|
Provisions |
|
|
Net |
|
Loans of the Consolidated Fund |
|
|
|
|
|
|
|
|
|
|
|
|
Nova Scotia Farm Loan Board |
|
$ |
187.2 |
|
|
$ |
17.8 |
|
|
$ |
169.4 |
|
Fisheries Development Fund |
|
|
89.2 |
|
|
|
0.2 |
|
|
|
89.0 |
|
Nova Scotia Housing Development Fund |
|
|
82.6 |
|
|
|
24.2 |
|
|
|
58.4 |
|
Industrial Development Fund |
|
|
107.0 |
|
|
|
76.5 |
|
|
|
30.4 |
|
Venture Corporations Act |
|
|
0.8 |
|
|
|
0.8 |
|
|
|
0.0 |
|
Loans to Municipalities |
|
|
0.3 |
|
|
|
0.0 |
|
|
|
0.3 |
|
Halifax Dartmouth Bridge Commission |
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
Miscellaneous |
|
|
0.7 |
|
|
|
0.0 |
|
|
|
0.7 |
|
Market Development Initiative Fund |
|
|
5.6 |
|
|
|
0.0 |
|
|
|
5.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
473.3 |
|
|
|
119.5 |
|
|
|
353.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments of the Consolidated Fund |
|
|
9.5 |
|
|
|
0.1 |
|
|
|
9.4 |
|
|
|
|
|
|
|
|
|
|
|
Total Loans and Investments of the Consolidated Fund |
|
|
482.8 |
|
|
|
119.6 |
|
|
|
363.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and Investments to Governmental Units |
|
|
|
|
|
|
|
|
|
|
|
|
Nova Scotia Business Incorporated |
|
|
156.8 |
|
|
|
48.9 |
|
|
|
107.9 |
|
Nova Scotia Government Fund |
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
Nova Scotia Innovation Corporation |
|
|
17.0 |
|
|
|
0.0 |
|
|
|
17.0 |
|
Nova Scotia Municipal Finance Corporation |
|
|
690.2 |
|
|
|
0.0 |
|
|
|
690.2 |
|
Other Governmental Units |
|
|
4.9 |
|
|
|
0.0 |
|
|
|
4.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
868.9 |
|
|
|
48.9 |
|
|
|
820.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Loan and Investments |
|
$ |
1,351.7 |
|
|
$ |
168.5 |
|
|
$ |
1,183.2 |
|
|
|
|
|
|
|
|
|
|
|
The Government announced in February 2009 that it had increased by $175 million the available
funding for the Industrial Expansion Fund (in the table shown as the Industrial Development Fund).
That fund is designed to support the expansion of Nova Scotia businesses, invest in new technology
and to improve productivity and competitiveness.
44
Agriculture and Rural Credit Act
The Nova Scotia Farm Loan Board (“Farm Loan Board”), a Provincial agency, provides loans to
individuals, partnerships, and corporations engaged in the farming industry. Loans are provided for
the acquisition of real estate or the improvement of existing facilities, and generally are secured
by agreements of sale between the borrower and the Farm Loan Board. The Farm Loan Board establishes
the interest rate on loans issued. This rate, which must be approved by the Minister of Agriculture
and Fisheries, is based on the average quarterly commercial loan rates for the relevant term
obtained from three or more financial institutions, adjusted by business risk and policy factors,
with a minimum rate of interest equal to the all-in Province of Nova Scotia cost of borrowing plus
50 basis points.
Fisheries and Coastal Resources Act
The Fisheries Loan Board, a Provincial agency, provides loans for the construction or purchase
of vessels, machinery, and other fishing equipment. Loans are made to individuals, partnerships,
and corporations and are secured by first marine mortgages. Fisheries loans bear interest at
prevailing market rates repayable on a seasonal repayment schedule.
Industrial Development Act
The Province provides financial assistance to establish, assist, develop, or expand industries
in Nova Scotia. Assistance can be in the form of loans, guarantees, and other financial
information.
Nova Scotia Housing Act
The Housing Act enables the Nova Scotia Department of Community Services to provide subsidized
mortgage loans for home ownership, and low-interest loans for home repair or rehabilitation to
low-to-moderate income households in Nova Scotia. The Nova Scotia Housing Development Corporation
and the Department of Community Services administer the capital housing programs, some of which are
cost-shared with Canada Mortgage and Housing Corporation and municipalities. The Housing Act also
enables the Nova Scotia Housing Development Corporation to provide loan guarantees for housing
projects, construct lease-purchase housing and public housing, and to develop and service land.
There are no current initiatives to develop new land or construct new lease-purchase housing or
public housing, but the Nova Scotia Housing Development Corporation continues to administer
existing housing and land.
Municipal Loan and Building Fund Act
The Province, through the Nova Scotia Municipal Finance Corporation, provides loans to
municipalities for approved capital purposes, which can be roads, sidewalks, public works fleets,
recreation facilities, water and sewer systems, and municipal buildings. Loans are secured by
municipal debentures.
Nova Scotia Business Incorporated Act
The Nova Scotia Business Incorporated Act created Nova Scotia Business Incorporated (“NSBI”),
a body corporate whose purpose is to make arms-length decisions respecting the provision of
financial assistance within Nova Scotia for economic development. At present, the Province funds
NSBI’s activities. The first Board of Directors of NSBI was appointed by the Province in 2000. The
Board of NSBI is electing subsequent directors. At present, the Board of Directors consists of both
those originally appointed by the Province and new members elected by the Board of NSBI. The latter
are subject to the approval of the Province as sole shareholder.
Venture Corporations Act
The Province has provided a source of equity capital to registered venture corporations to
encourage the development of small business in Nova Scotia. Venture corporations in turn provide
assistance in the development of small enterprises by providing equity capital, business and
managerial expertise. Outstanding assistance is currently managed under this Act, but no new
funding is being provided under this program.
45
Revenue Act
The Province may provide unsecured loans to establish, maintain, expend, construct, or equip
hospitals or health care facilities in Nova Scotia.
Provincial Finance Act
The Governor-in-Council may authorize the Minister of Finance to lend money to a Government
Business Enterprise or a Governmental Unit.
46
PROVINCIAL DEBT
Funded Debt
The following table sets forth the funded debt of the Province for the Consolidated Fund as
described in “Government Finance — Specific Accounting Policies” above, outstanding at March 31 in
each of the five fiscal years ended March 31, 2004 through to March 31, 2008, each as audited under
the Province’s accounting policies in effect at the time. Figures have not been restated for
accounting changes, and as a result may not be directly comparable.
FUNDED DEBT FOR THE CONSOLIDATED FUND(4)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2008 |
|
Provincial Funded Debenture Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable in Canadian Dollars |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Canadian Pension Plan Fund(1) |
|
$ |
1,079.4 |
|
|
$ |
1,079.4 |
|
|
$ |
1,079.4 |
|
|
$ |
1,079.4 |
|
|
$ |
1,079.4 |
|
Other |
|
|
9,727.6 |
|
|
|
8,734.7 |
|
|
|
8,304.9 |
|
|
|
9,022.4 |
|
|
|
9,574.0 |
|
Payable in U.S. Dollars (2) |
|
|
2,356.8 |
|
|
|
2,142.7 |
|
|
|
1,580.3 |
|
|
|
1,215.2 |
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
13,163.8 |
|
|
|
11,956.8 |
|
|
|
10,964.6 |
|
|
|
11,317.0 |
|
|
|
10,653.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Long-term Indebtedness (3) |
|
|
453.4 |
|
|
|
504.8 |
|
|
|
439.8 |
|
|
|
401.3 |
|
|
|
379.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Provincial Funded Debt |
|
$ |
13,617.2 |
|
|
$ |
12,461.6 |
|
|
$ |
11,404.4 |
|
|
$ |
11,718.3 |
|
|
$ |
11,032.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Sinking Funds and Public Debt Management |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Funds (2) (5) |
|
|
2,919.8 |
|
|
|
2,599.4 |
|
|
|
2,094.8 |
|
|
|
1,906.8 |
|
|
|
2,011.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Funded Debt (6) |
|
$ |
10,697.4 |
|
|
$ |
9,862.2 |
|
|
$ |
9,309.6 |
|
|
$ |
9,811.5 |
|
|
$ |
9,020.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Capita ($) (7) |
|
$ |
11,422.7 |
|
|
$ |
10,514.1 |
|
|
$ |
9,946.2 |
|
|
$ |
10,492.5 |
|
|
$ |
9,657.3 |
|
As a Percentage of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Income (7) |
|
|
43.8 |
% |
|
|
38.8 |
% |
|
|
35.0 |
% |
|
|
35.5 |
% |
|
|
31.2 |
% |
Gross Domestic Product at Market Prices (7) |
|
|
37.1 |
% |
|
|
33.0 |
% |
|
|
29.8 |
% |
|
|
30.9 |
% |
|
|
27.3 |
% |
|
|
|
(1) |
|
Debentures held by the Canada Pension Plan Fund are payable 20 to 30 years after their
respective dates of issue, are not negotiable, are not transferable or assignable, but are
redeemable in whole or in part before maturity at the option of the Minister of Finance of
Canada, on six months’ prior notice, if deemed necessary to meet the requirements of the
Canada Pension Plan. |
|
(2) |
|
Debentures payable in foreign currencies and related sinking funds invested in foreign
currencies are reflected at rates of exchange in effect at March 31 in each of the years
2004 through 2008, respectively, and reflect currency-swap contracts. |
|
(3) |
|
Other long-term indebtedness includes capital leases, for the Consolidated Fund, in the
amounts of $450.9 million, $433.8 million, $415.6 million, $396.1 million and $375.1
million, for the fiscal years ended, 2004, 2005, 2006, 2007 and 2008 respectively. |
|
(4) |
|
There were subsequent borrowings of $1,283.5 million and debt retirements of $759.25
million, as of March 11, 2009. |
|
(5) |
|
At March 31, 2008, the Public Debt Management Fund held $136.2 million that is
available to repay or retire debentures of the Province at the discretion of the
Governor-in-Council. |
|
(6) |
|
Funded debt does not include any unfunded pension liabilities or other retirement
benefits of the Province. |
|
(7) |
|
Population at July 1 for the previous calendar year. Personal Income and Gross Domestic
Product at Market Prices for the previous calendar year. |
In addition to the debt of the Consolidated Fund, there is a funded debt with other entities
that comprise part of the Consolidated Entity. The major entities not included in the Consolidated
Fund are Nova Scotia Power Finance Inc. and the Housing Development Corporation, and
self-supporting entities such as the Halifax Dartmouth Bridge Commission, Highway 104, Nova Scotia
Liquor Commission, and the Nova Scotia Gaming Corporation. As at March 31, 2008, total funded debt
of the Consolidated Entity was $12,469.9 million.
47
Derivative Financial Instruments
The Province is party to financial instruments with off-balance sheet risk, either to hedge
against the risks associated with fluctuations in foreign exchange rates or to manage risks
associated with interest rate fluctuations. Foreign currency contracts are used to convert the
liability for foreign currency borrowing and associated costs into Canadian or U.S. dollars.
Interest rate contracts are used to vary the amounts and period for which interest rates on
financial instruments are fixed or floating. The Province uses interest rate swap contracts to
convert certain interest payments from fixed to floating. Foreign exchange contracts include
forward and swap agreements. Interest rate contracts include swap agreements and options on swaps.
The Department of Finance credit policy states that it executes derivative transactions only
with well-rated counterparties. The minimum credit rating for counterparties to derivative
transactions is “A”.
The Province had the following interest and currency swap contracts outstanding for the fiscal
year ended March 31, 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
# of |
|
|
|
|
|
Notional |
|
Term |
|
Mark to |
|
|
Swaps |
|
Currency |
|
Principal |
|
Remaining |
|
Market * |
|
|
|
|
|
|
|
|
|
|
($ thousands) |
|
(years) |
|
($ millions) |
|
|
|
151 |
|
|
CDN$ |
|
|
1,899,994 |
|
|
51 days to 23 |
|
|
(10.7 |
) |
|
|
|
25 |
|
|
US$ |
|
|
3,294,000 |
|
|
|
4 to 14 |
|
|
|
(480.1 |
) |
|
|
|
2 |
|
|
UK |
|
|
83,250 |
|
|
3 and 11 |
|
|
(9.8 |
) |
|
|
|
1 |
|
|
Euro |
|
|
50,000 |
|
|
|
2 |
|
|
|
5.4 |
|
|
|
|
* |
|
Mark to Market is an indication of the swap’s market value as at March 31, 2008. This
represents the estimated realizable gain (loss), and is equivalent to the present value of future
savings (losses) based on market conditions as at March 31, 2008. |
The Province has also executed numerous foreign currency swap contracts/forward agreements to
convert foreign denominated debt into Canadian or United States denominated debt. The mark to
market of these swap contracts are included in the previous table, and the currency swap contracts
are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Original |
|
Original |
|
Current |
|
Current |
Termination Date |
|
Currency |
|
Principal |
|
Currency |
|
Principal |
|
|
|
|
|
|
(thousands) |
|
|
|
|
|
(thousands) |
SWAPS: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 28, 2011 |
|
UK |
|
|
23,250 |
|
|
CDN$ |
|
|
56,283 |
|
April 16, 2019 |
|
UK |
|
|
60,000 |
|
|
CDN$ |
|
|
114,387 |
|
February 27, 2012 |
|
US$ |
|
|
500,000 |
|
|
CDN$ |
|
|
795,000 |
|
July 27, 2013 |
|
US$ |
|
|
300,000 |
|
|
CDN$ |
|
|
299,850 |
|
March 15, 2016 |
|
US$ |
|
|
150,000 |
|
|
CDN$ |
|
|
205,725 |
|
January 26, 2017 |
|
US$ |
|
|
500,000 |
|
|
CDN$ |
|
|
586,500 |
|
February 1, 2019 |
|
US$ |
|
|
200,000 |
|
|
CDN$ |
|
|
198,000 |
|
July 1, 2019 |
|
US$ |
|
|
200,000 |
|
|
CDN$ |
|
|
199,900 |
|
November 15, 2019 |
|
US$ |
|
|
244,000 |
|
|
CDN$ |
|
|
246,318 |
|
March 1, 2020 |
|
US$ |
|
|
300,000 |
|
|
CDN$ |
|
|
409,200 |
|
May 1, 2021 |
|
US$ |
|
|
300,000 |
|
|
CDN$ |
|
|
312,002 |
|
April 1, 2022 |
|
US$ |
|
|
300,000 |
|
|
CDN$ |
|
|
379,517 |
|
July 30, 2022 |
|
US$ |
|
|
300,000 |
|
|
CDN$ |
|
|
329,310 |
|
February 24, 2010 |
|
Euro |
|
|
50,000 |
|
|
CDN$ |
|
|
72,235 |
|
48
At March 31, 2008 the Province had entered into 5 forward agreements to convert future
interest payments on foreign debt into Canadian dollars as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
Original |
|
Original |
|
Current |
|
Current |
Termination Date |
|
Currency |
|
Principal |
|
Currency |
|
Principal |
|
|
|
|
(thousands) |
|
|
|
(thousands) |
May 15, 2008 to
November 14, 2008
|
|
US$ |
|
49,380
|
|
CDN$
|
|
|
50,391 |
|
49
Debt Maturities and Sinking Funds
The following table sets forth the maturities of total funded debt and related sinking fund
balances, at March 31, 2008, from the Consolidated Fund as described in “Government Finance —
Specific Accounting Policies” above, adopting the accounting policies, other than consolidation of
government entities, described in “Government Finance — Specific Accounting Policies” above.
SCHEDULE OF DEBT MATURITIES AND RELATED SINKING FUND BALANCES (1)
FOR THE CONSOLIDATED FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Period Ending |
|
Debt in |
|
|
Debt in |
|
|
Total Debt in |
|
|
|
|
March 31 |
|
Canadian Dollars |
|
|
US Dollars |
|
|
Canadian Dollars(2) |
|
|
Sinking Funds(3) |
|
|
|
(in millions) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinking Fund General |
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
738.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009 |
|
$ |
292.3 |
|
|
$ |
— |
|
|
$ |
292.3 |
|
|
$ |
— |
|
2010 |
|
|
683.9 |
|
|
|
— |
|
|
|
684.9 |
|
|
|
— |
|
2011 |
|
|
675.8 |
|
|
|
— |
|
|
|
675.8 |
|
|
|
— |
|
2012 |
|
|
1,605.2 |
|
|
|
— |
|
|
|
1,605.2 |
|
|
|
— |
|
2013 |
|
|
81.9 |
|
|
|
— |
|
|
|
81.9 |
|
|
|
— |
|
2014 |
|
|
469.7 |
|
|
|
— |
|
|
|
469.7 |
|
|
|
170.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2009-2014 |
|
|
3,809.8 |
|
|
|
— |
|
|
|
3,809.8 |
|
|
|
908.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2015-2019 |
|
|
1,761.6 |
|
|
|
— |
|
|
|
1,761.6 |
|
|
|
200.0 |
|
2020-2024 |
|
|
2,786.9 |
|
|
|
— |
|
|
|
2,786.9 |
|
|
|
767.4 |
|
2025-2029 |
|
|
642.5 |
|
|
|
— |
|
|
|
642.5 |
|
|
|
— |
|
2030-2034 |
|
|
900.0 |
|
|
|
— |
|
|
|
900.0 |
|
|
|
— |
|
2035-2039 |
|
|
1,132.9 |
|
|
|
— |
|
|
|
1,132.9 |
|
|
|
— |
|
2040-2044 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,032.7 |
|
|
$ |
— |
|
|
|
11,033.7 |
|
|
$ |
1,875.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
This includes debt of public schools, courthouses, and certain capital lease obligations. |
|
(2) |
|
Canadian dollar-equivalent at rates of exchange in effect at March 31, 2008 or, if
applicable, the rate of exchange in the associated swap. |
|
(3) |
|
In addition to these Sinking Funds, there are funds available for debt retirement in the
Public Debt Management Fund that is comprised of $136.2 million in assets at March 31, 2008.
During the fiscal year 2007-2008, a $55.9 million contribution was made to Sinking Funds, and
total earnings to both the Sinking Fund and Public Debt Management Fund were $112.8 million
and there were no redemptions. |
Until March 31, 2003, the Province provided sinking fund installments for all of its term debt
issues except Canada Pension Plan (“CPP”) and Medium Term Notes (“MTN”) issues. As of March 31,
2003, sinking funds held for public issues without a sinking fund bond covenant, as well as CPP and
MTN issues, have been moved to the “Sinking Fund General”, and are available at the discretion of
the Minister of Finance to retire maturing debt issues. The Province continues to make sinking fund
installments for those debentures that contain sinking fund bond covenants. On those issues, annual
sinking fund installments generally range from one to three per cent of the original issue, but may
vary slightly from year to year, based on actual and anticipated rates of return on sinking fund
assets. Sinking fund payments relating to debentures payable in foreign currency are adjusted each
year, as necessary, to reflect exchange rate movements since the date of issuance of the
debentures. Sinking funds are treated as restricted assets and are used solely for debt retirement.
Sinking fund assets are recorded at cost, which includes premiums and discounts associated
with the purchase of these investments. These premiums and discounts are amortized on a
straight-line basis over the term of the related investment. The unamortized portion of the
premiums and discounts are included as part of the value of sinking funds. As of March 31, 2008,
the unamortized premium was $58.6 million.
50
Annual cash contributions into the sinking fund and Public Debt Management Fund are invested
in approved securities. Assets consist primarily of debentures of the provinces and Government of
Canada with floating and fixed interest rates. Regarding the latter, the fixed interest rates on
funds held at March 31, 2008, ranged from 4.30% to 10.0%, for Canadian funds, and from 4.45% to
9.50%, for U.S. funds. Earnings on investments are retained and reinvested in each of the sinking
funds and Public Debt Management Fund. Sinking funds for debentures payable in U.S. currency are
invested in U.S. dollar denominated investments. For those U.S. dollar issues that have been
swapped to Canadian dollars, sinking funds are maintained in both Canadian and U.S. dollars.
Debentures payable in foreign currencies, accrued interest thereon, and related sinking funds
invested in foreign currencies are reflected in the accounts of the Province at the rate associated
with the swap contact.
As at March 31, 2008, the Consolidated Fund held financial assets in the sinking funds and
Public Debt Management Fund totaling $2,011.9 million. These funds were comprised of $1,793.9
million in Canadian assets and $218.0 million in U.S. assets (USD $212.0 million converted to
Canadian dollars at the March 31, 2008 foreign exchange rate). Total market value of
both funds was $2,166.2 million at year-end.
At March 31, 2008, the Province held $1,064.8 million in par value of its own debentures
(carrying value of $1,177.7 million) in sinking funds and Public Debt Management Fund as active
investments. These were comprised of $505.7 million in Canadian assets and $672.0 million in U.S.
dollar assets. Of the $2,011.9 million the Province holds in financial assets for debt retirement,
$136.2 million is held in the Public Debt Management Fund, while $1,875.7 million is held in
sinking funds and the Sinking Fund General.
The following table sets forth the sinking funds, by currency, of funded debt of the Province
for the Consolidated Fund (as described in “Government Finance — Specific Accounting Policies”
above) at March 31, 2008, adopting the accounting policies, other than consolidation of government
entities, described in “Government Finance — Specific Accounting Policies” above.
PROVINCIAL RESTRICTED SINKING FUNDS FOR THE CONSOLIDATED FUND
|
|
|
|
|
|
|
As at March 31, 2008 |
|
|
|
(in millions) |
|
|
|
|
|
|
For Issues Payable in: |
|
|
|
|
Canadian Dollars |
|
$ |
62.4 |
|
United States Dollars (1) |
|
|
1,075.1 |
|
|
|
|
|
|
|
$ |
1,137.5 |
|
|
|
|
|
|
|
|
(1) |
|
Canadian dollar equivalent at the rate of exchange in effect at March 31, 2008. |
Based on rates of return on investments held in the sinking funds and the schedule of
maturities for debt outstanding at March 31, 2008, the Province estimates debt refinancing
requirements for the Consolidated Entity during the five fiscal years ending March 31, 2009 to 2013
to be $371.9 million for the fiscal year 2008-2009, $759.8 million for the fiscal year 2009-2010,
$751.0 million for the fiscal year 2010-2011, $1,679.1 million for the fiscal year 2011-2012, and
$156.5 million for the fiscal year 2012-2013.
51
Current Liabilities
The following table sets forth the amount of short-term debt of the Consolidated Entity (as
described in “Government Finance — Specific Accounting Policies” above) at March 31, 2008,
adopting the accounting policies as described in “Government Finance — Specific Accounting
Policies” above.
SHORT-TERM DEBT FOR THE CONSOLIDATED ENTITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal years Ended March 31 |
|
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2008 |
|
|
|
(Millions $) |
|
Bank Advances and Short-term Borrowings |
|
$ |
585.3 |
|
|
$ |
1,048.4 |
|
|
$ |
900.1 |
|
|
$ |
790.9 |
|
|
$ |
1,090.9 |
|
Accounts Payable & Accrued Liabilities |
|
|
1,079.6 |
|
|
|
1,299.7 |
|
|
|
1,314.8 |
|
|
|
1,315.4 |
|
|
|
1,531.0 |
|
Accrued Interest |
|
|
241.0 |
|
|
|
229.4 |
|
|
|
204.7 |
|
|
|
200.6 |
|
|
|
188.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,905.9 |
|
|
$ |
2,577.4 |
|
|
$ |
2,419.6 |
|
|
$ |
2,308.5 |
|
|
$ |
2,831.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Offsetting the above current liabilities, current assets (cash and short-term investments,
accounts receivable, and short-term advances) for the Consolidated Entity at March 31, 2008 totaled
$1,747.0 million.
Guaranteed Debt
The following table sets forth the guaranteed debt of the Consolidated Entity for the fiscal
years 2004, 2005, 2006, 2007 and 2008.
GUARANTEED DEBT FOR CONSOLIDATED ENTITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal years Ended March 31 |
|
|
|
|
|
|
|
Restated |
|
|
Restated |
|
|
|
|
|
|
|
|
|
2004 |
|
|
2005(1) |
|
|
2006(1) |
|
|
2007 |
|
|
2008 |
|
|
|
(Millions $) |
|
Guaranteed Debt: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Payable in Canadian Dollars |
|
$ |
463.5 |
|
|
$ |
415.7 |
|
|
$ |
418.9 |
|
|
$ |
409.6 |
|
|
$ |
380.7 |
|
Payable in U.S. Dollars (2) |
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Guaranteed Debt |
|
|
463.7 |
|
|
|
415.9 |
|
|
|
418.9 |
|
|
|
409.6 |
|
|
|
380.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for Guarantee Payout |
|
|
43.3 |
|
|
|
58.8 |
|
|
|
52.7 |
|
|
|
69.9 |
|
|
|
76.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Guarantees not Reflected in Statements |
|
$ |
414.9 |
|
|
$ |
357.1 |
|
|
$ |
366.2 |
|
|
$ |
339.7 |
|
|
$ |
304.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Restated to correct the official amount guaranteed. |
|
(2) |
|
Amounts payable in U.S. dollars are reflected herein at the Canadian dollar-equivalent at
rates of exchange in effect March 31, 2004 and 2005 respectively. |
The table for guaranteed debt for the Consolidated Entity does not include the $1,008.4
million of gross debt, as at March 31, 2008, of the Nova Scotia Power Finance Corporation debt
guaranteed by the Province of Nova Scotia, which has been fully defeased.
52
Pension Funds
The Province evaluates its pension funds using two methods. The first method, as prescribed by
the CICA, measures a plan sponsor’s potential liability, with rates of return based on management’s
best estimate (and gains and losses amortized over time). The financial statements of the
Province’s pension plans calculated on this basis are provided in Note 7 to the Public Accounts
included as Exhibit (2) to this Form 18-K. The second method, used for the purpose of determining
the funded status of the plan on a going-concern basis, as well as the total current service cost
and contributions to the plan for the upcoming year, uses a rate of return based on management’s
best estimate less a margin for conservatism. The tables and discussions included in the following
section are shown using the latter funding basis of calculation.
Public Service Superannuation Fund
The Minister of Finance is the trustee of the Public Service Superannuation Fund (the
“Superannuation Fund”). Employees of the Province and certain of its entities are entitled to
receive pension benefits pursuant to the provisions of a plan established under the Public Service
Superannuation Act. Employees’ and matching employer contributions are paid into the Superannuation
Fund, while pensions, refunds, and transfer values are paid from it.
The Superannuation Fund, which is not part of the Consolidated Fund, is invested in Federal,
provincial, municipal, and corporate securities, and real estate.
The Auditor General of Nova Scotia audits the financial statements of the Superannuation Fund.
The following table sets forth the audited Statement of Continuity of the Superannuation Fund.
STATEMENT OF CONTINUITY OF THE PUBLIC SERVICE SUPERANNUATION FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended March 31 |
|
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2008 |
|
|
|
(in millions) |
|
Opening Balance |
|
$ |
2,555.5 |
|
|
$ |
3,035.8 |
|
|
$ |
3,188.8 |
|
|
$ |
3,541.8 |
|
|
$ |
3,817.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee Contributions |
|
|
42.6 |
|
|
|
45.1 |
|
|
|
49.9 |
|
|
|
56.3 |
|
|
|
68.4 |
|
Employer Contributions |
|
|
37.4 |
|
|
|
43.9 |
|
|
|
47.8 |
|
|
|
55.1 |
|
|
|
64.2 |
|
Income Earned |
|
|
178.7 |
|
|
|
190.4 |
|
|
|
314.8 |
|
|
|
295.2 |
|
|
|
286.9 |
|
Increase (Decrease) in Market
Value of Investments |
|
|
413.0 |
|
|
|
52.8 |
|
|
|
131.4 |
|
|
|
75.5 |
|
|
|
(430.5 |
) |
Transfers from other pension plans |
|
|
4.0 |
|
|
|
1.4 |
|
|
|
1.5 |
|
|
|
2.4 |
|
|
|
5.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
675.7 |
|
|
|
333.5 |
|
|
|
545.4 |
|
|
|
484.4 |
|
|
|
(5.5 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,231.2 |
|
|
|
3,369.3 |
|
|
|
3,734.2 |
|
|
|
4,026.1 |
|
|
|
3,811.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pensions Paid |
|
|
155.4 |
|
|
|
164.1 |
|
|
|
173.4 |
|
|
|
183.9 |
|
|
|
194.5 |
|
Refunds & Transfers Out |
|
|
24.4 |
|
|
|
8.1 |
|
|
|
10.5 |
|
|
|
15.9 |
|
|
|
23.9 |
|
Operating Expenses |
|
|
7.6 |
|
|
|
8.2 |
|
|
|
8.5 |
|
|
|
9.3 |
|
|
|
9.8 |
|
Prior period adjustment(1) |
|
|
8.1 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
195.4 |
|
|
|
180.4 |
|
|
|
192.5 |
|
|
|
209.1 |
|
|
|
228.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Balance |
|
$ |
3,035.8 |
|
|
$ |
3,188.8 |
|
|
$ |
3,541.8 |
|
|
$ |
3,817.0 |
|
|
$ |
3,583.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Calculations of accrued income for fixed income securities, as originally stated in financial
statements for prior years, were found to contain errors relating to real return bonds. These
errors were corrected in the fiscal year ended March 31, 2004. |
53
The latest actuarial valuation, for funding purposes, of the Superannuation Fund was performed
by Mercer (Canada) as at December 31, 2007. The actuarial valuation projects liabilities for each
member on the basis of service earned to date and projected average salaries for the five highest
years at the date of retirement (the “projected unit credit actuarial cost method”). The major
economic assumption used in the valuation was a real rate of return on investments of 4.25%.
Inflation was assumed to be 2.5%, while salary increases were assumed to average 2.5% plus
merit/seniority based on attained age. The assumed retirement age was based on a 35% probability
that a member would retire upon attainment of age 54 and 80 points (age plus service); otherwise
the member was assumed to retire at the earlier of age 60 and 35 years of service (or in one year’s
time if the member had already attained either age 60 or 35 years of service). The actuarial
valuation indicated that at December 31, 2007, the Superannuation Fund had actuarial liabilities
with a present value of $4,437.7 million, assets with a present value of $3,705.0 million, an
unfunded liability of $732.7 million, and a funded ratio of 83.5%. The Superannuation Fund’s
actuaries have provided an estimated present value for the Superannuation Fund’s actuarial
liabilities as at March 31, 2008 of $4,496.2 million. Assets had an actuarial value of $3,584.0
million, resulting in an unfunded liability of $912.2 million and a funded ratio of 79.7%. Market
conditions have negatively impacted the Fund since the last valuation. The Nova Scotia Pension
Agency staff has estimated that as of September 30, 2008, the actuarial deficiency was $1,283.9
million and the funded ratio was 72.2%.
Provincial legislation and regulations provide that certain payments to pensioners are charged
to the Consolidated Fund rather than to the Superannuation Fund. These payments, total and net of
recoveries, amounted to $16.7 million and $14.6 million, respectively, for the fiscal year ended
March 31, 2008.
The Public Service Superannuation Act provides that the Province must make payment out of its
Consolidated Fund if the Superannuation Fund is insufficient to provide for pension payments as
they become due.
54
Teachers’ Pension Fund
Until April 1, 2006, the Minister of Finance was the trustee of the Teachers’ Pension Fund
(the “Teachers’ Fund”). Effective April 1, 2006, under a joint trust agreement between the Province
of Nova Scotia and the Nova Scotia Teachers’ Union, the Teachers’ Pension Plan Trustee Incorporated
replaced the Minister of Finance as trustee.
Teachers employed by the school boards and Nova Scotia Community College are entitled to
receive pension benefits pursuant to the provisions of a plan established under the Teachers’
Pension Act. Employees’ and matching employer contributions are paid into the Teachers’ Fund, while
pensions, refunds and transfer values are paid from it. The Teachers’ Fund is invested in Federal,
provincial, municipal and corporate securities, and real estate.
The annual financial statements of the Teachers’ Fund are audited by an auditor appointed by
the trustee. The auditor for the most recent financial statements was Grant Thornton. The
following table sets the continuity of the Teachers’ Fund, as audited, for the five fiscal years
ended December 31, 2007.
STATEMENT OF CONTINUITY OF THE TEACHERS’ PENSION FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended December 31 |
|
|
|
2003(1) |
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
|
(in millions) |
|
Opening Balance |
|
$ |
3,350.7 |
|
|
$ |
3,709.2 |
|
|
$ |
3,900.4 |
|
|
$ |
4,384.4 |
|
|
$ |
4,758.4 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee Contributions |
|
|
55.4 |
|
|
|
57.2 |
|
|
|
58.9 |
|
|
|
61.3 |
|
|
|
62.1 |
|
Employer Contributions |
|
|
69.7 |
|
|
|
55.3 |
|
|
|
200.6 |
(2) |
|
|
59.2 |
|
|
|
60.3 |
|
Income Earned |
|
|
143.6 |
|
|
|
251.4 |
|
|
|
329.9 |
|
|
|
366.0 |
|
|
|
387.1 |
|
Increase (Decrease) in Market
Value of Investments |
|
|
327.6 |
|
|
|
76.0 |
|
|
|
161.4 |
|
|
|
187.5 |
|
|
|
(343.9 |
) |
Transfers from other pension plans |
|
|
1.2 |
|
|
|
1.6 |
|
|
|
1.4 |
|
|
|
2.0 |
|
|
|
4.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
597.5 |
|
|
|
441.6 |
|
|
|
752.1 |
|
|
|
675.9 |
|
|
|
170.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,948.2 |
|
|
|
4,150.8 |
|
|
|
4,652.5 |
|
|
|
5,060.3 |
|
|
|
4,928.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pensions Paid |
|
|
219.8 |
|
|
|
238.1 |
|
|
|
257.1 |
|
|
|
286.4 |
|
|
|
305.4 |
|
Refunds & Transfers Out |
|
|
3.3 |
|
|
|
3.1 |
|
|
|
1.7 |
|
|
|
5.0 |
|
|
|
2.1 |
|
Operating Expenses |
|
|
7.9 |
|
|
|
9.2 |
|
|
|
9.3 |
|
|
|
10.5 |
|
|
|
11.3 |
|
Prior Period Adjustments(1) |
|
|
8.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
239.0 |
|
|
|
250.4 |
|
|
|
268.1 |
|
|
|
301.9 |
|
|
|
318.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Balance |
|
$ |
3,709.2 |
|
|
$ |
3,900.4 |
|
|
$ |
4,384.4 |
|
|
$ |
4,758.4 |
|
|
$ |
4,610.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) |
|
Calculations of accrued income for fixed income securities, as originally stated in financial
statements for prior years, were found to contain errors relating to real return bonds. These
errors were corrected, and comparative accrued investment income amounts for the fiscal year
ended December 31, 2003 were restated in the financial statements for the fiscal year ended
December 31, 2004, the figures shown above are the restated figures. |
|
(2) |
|
As part of an agreement between the Province of Nova Scotia and the Nova Scotia Teachers’
Union signed on June 22, 2005 that led to joint trusteeship, the Province made a contribution
to the Teachers’ Fund of $142.0 million plus accured interest. This amount represented the
actuarial value of indexing that teachers would be relinquishing under the agreement. Indexing
for future pensioners will be contingent on the funding level of the pension plan. |
The latest actuarial valuation, for funding purposes, of the Teachers’ Fund was performed by
Mercer (Canada) Limited as at December 31, 2007, using the projected unit credit actuarial cost
method. The major
55
economic assumption used in the valuation was a real rate of return on investments of 4.25%.
Inflation was assumed to be 2.5%, while salary increases were assumed to average 2.75% plus
merit/seniority based on attained age. The assumed retirement age was based on a 60% probability
that a member would retire at the earliest age at which he or she would be eligible for an
unreduced pension; otherwise the member was assumed to retire at the earliest of age 65, 35 years
of service, and age 60 with 10 years of service. The actuarial valuation indicated that at December
31, 2007, the Teachers’ Fund had actuarial liabilities with a present value of $5,065.6 million,
assets of $4,610.0 million, an unfunded liability of $455.6 million and a funded ratio of 91.0%.
Market conditions have negatively impacted the Fund since the last valuation. The Nova Scotia
Pension Agency staff has estimated that as of September 30, 2008, the actuarial deficiency was
$1,089.5 million and the funded ratio was 78.9%.
On June 22, 2005, the Province and the Nova Scotia Teachers’ Union signed an agreement to
address the unfunded obligation of the Fund and to provide the framework for joint trusteeship of
the Nova Scotia Teachers’ Pension Fund, which became effective on April 1, 2006. As part of the
agreement, the Province made a one-time payment of $142.0 million in June 2005 as its contribution
to the plan to offset changes to the indexing provisions agreed to by teachers effective April 1,
2005 upon changes to the Teachers’ Pension Act Regulations. The accounting impact on the total
accrued benefit obligation was estimated by management to be $230.3 million; however, the precise
amount will be impacted over time by a number of factors that will affect the calculation,
including, but not limited to, the rate of inflation, the funded status of the plan, the percentage
of members who opted for the new rules, the return on plan assets and the number of teachers who
retired prior to August 1, 2006.
Under the joint trust agreement between the Province of Nova Scotia and the Nova Scotia
Teachers’ Union, the Province effective April 1, 2006, out of its Consolidated Fund, is responsible
for 50% of the payment if the Teachers’ Fund is insufficient to provide for pension payments as
they become due.
Sydney Steel Corporation Superannuation Fund
The Sydney Steel Corporation Superannuation Fund was established under the Sydney Steel
Corporation Sale Act effective March 1, 2001. The Fund assumed responsibility for the assets and
obligations of the former Sydney Steel Corporation pension plans. Under subsection 7(9) of the
Sydney Steel Corporation Sale Act, the Province of Nova Scotia has assumed responsibility to fund
any shortfalls arising under this Fund. The remaining former Sydney Steel Corporation Pension Fund
assets, in the amount of $70.0 million, were transferred to the Sydney Steel Corporation
Superannuation Fund.
Three pension plans are covered by the Fund.
|
• |
|
United Steelworkers of America Pension Plan is a non-contributory defined benefit plan
that covers employees of Sydney Steel Corporation who are member of Locals 1064, 6516,
6537 of the United Steelworkers of America. Under the plan, contributions were made only
by Sydney Steel Corporation. |
|
|
• |
|
Salaried Pension Plan is a partially contributory defined pension plan covering the
salaried employees of Sydney Steel Corporation. Under the plan, contributions were made by
plan members and by Sydney Steel Corporation. |
|
|
• |
|
Canadian Union of Public Employees Pension Plan is a non-contributory defined benefit
plan that covers employees of Sydney Steel Corporation who are members of Local 1675 of
the Canadian Union of Public Employees. Under the plan, contributions were made only by
Sydney Steel Corporation. |
The Auditor General of Nova Scotia audits the annual financial statements of the Sydney Steel
Corporation Superannuation Fund.
The following table sets forth the continuity of the Fund, as audited, for the five fiscal
years ended March 31, 2008.
56
STATEMENT OF CONTINUITY OF THE SYDNEY STEEL CORPORATION
SUPERANNUATION FUND
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year Ended March 31 |
|
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2008 |
|
|
|
(in millions) |
|
Opening Balance |
|
$ |
16.8 |
|
|
$ |
15.3 |
|
|
$ |
11.5 |
|
|
$ |
8.4 |
|
|
$ |
2.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employee Contributions |
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
Employer Contributions |
|
|
19.8 |
|
|
|
19.5 |
|
|
|
19.5 |
|
|
|
16.9 |
|
|
|
18.7 |
|
Income Earned |
|
|
1.7 |
|
|
|
1.6 |
|
|
|
1.6 |
|
|
|
1.3 |
|
|
|
0.5 |
|
Increase (Decrease) in Market
Value of Investments |
|
|
1.6 |
|
|
|
(1.0 |
) |
|
|
(0.2 |
) |
|
|
(1.0 |
) |
|
|
(0.5 |
) |
Other |
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
23.1 |
|
|
|
20.1 |
|
|
|
20.9 |
|
|
|
17.2 |
|
|
|
18.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
39.9 |
|
|
|
35.4 |
|
|
|
32.4 |
|
|
|
25.6 |
|
|
|
21.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pensions Paid |
|
|
24.3 |
|
|
|
23.8 |
|
|
|
23.8 |
|
|
|
22.6 |
|
|
|
22.1 |
|
Refund of Contributions |
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
|
|
0.0 |
|
Other |
|
|
0.3 |
|
|
|
0.1 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
0.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
24.6 |
|
|
|
23.9 |
|
|
|
24.0 |
|
|
|
22.8 |
|
|
|
22.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing Balance |
|
$ |
15.3 |
|
|
$ |
11.5 |
|
|
$ |
8.4 |
|
|
$ |
2.8 |
|
|
|
($0.7 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at March 31, 2007 the United Steelworkers of America Pension Plan and the Canadian Union of
Public Employees Pension Plan were exhausted of funds. The funds of the Salaried Pension Plan were
exhausted in October 2007. The Province has been making the payments for the plans whose assets
have been exhausted.
The most recent actuarial valuations of the three pension plans funded from the Sydney Steel
Corporation Superannuation Fund were performed by Morneau Sobeco as at December 31, 2005, using the
projected unit credit actuarial cost method. The major economic and demographic assumptions used in
each valuation included a discount rate of 5.95%, an inflation rate of 2.75% (applicable to the
Salaried Pension Plan only) and a 100% probability that a member would retire at the earliest age
at which he or she would be eligible for an unreduced pension. The actuarial valuations indicated
that as at December 31, 2005, the United Steelworkers of America Pension Plan had actuarial
liabilities with a present value of $166.2 million, assets of $1.5 million, an unfunded liability
of $164.7 million, and a funded ratio of 0.9%. The Salaried Pension Plan had actuarial liabilities
with a present value of $53.7 million, assets of $7.6 million, an unfunded liability of $46.1
million, and a funded ratio of 14.2%. The Canadian Union of Public Employees Pension Plan had
actuarial liabilities with a present value of $2.5 million, assets of $30,900, an unfunded
liability of $2.4 million, and a funded ratio of 1.3%.
As at March 31, 2008, combined net assets available for benefits for the three plans had a
market value of negative $0.7 million, while actuarial liabilities for the three plans totaled
$218.9 million. The combined unfunded liability was $219.6 million, while the combined funded ratio
was negative 0.3%. This deficiency was previously recognized by the Province in its accounts. The
major economic assumptions used in determining the actuarial liabilities as at March 31, 2008
included a discount rate of 4.95% and an inflation rate of 2.5%.
57
PUBLIC SECTOR FUNDED DEBT
Public Sector Funded Debt
The debt burden, for which the public sector of the Province is responsible, consists of the
funded debt and guaranteed debt of the Province, and the underlying debt of municipalities and
Crown agencies that has not been funded or guaranteed by the Province of Nova Scotia.
The following table sets forth the public sector funded debt for the Consolidated Fund (as
described in “Government Finance — Specific Accounting Policies” above) as well as the Guaranteed
Debt of Governmental Units for the five fiscal years ended March 31, 2004 through to March 31,
2008.
PUBLIC SECTOR FUNDED DEBT (1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restated |
|
|
Restated |
|
|
|
|
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2008 |
|
|
|
(in millions unless otherwise indicated) |
|
Total Provincial Funded Debt (2) |
|
$ |
13,617.2 |
|
|
$ |
12,461.6 |
|
|
$ |
11,404.4 |
|
|
$ |
11,718.3 |
|
|
$ |
11,032.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Guaranteed Debt of the Province(3) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial Development and Other |
|
|
286.5 |
|
|
|
251.1 |
|
|
|
262.1 |
|
|
|
260.4 |
|
|
|
243.2 |
|
Mortgages |
|
|
177.2 |
|
|
|
164.8 |
|
|
|
156.8 |
|
|
|
149.2 |
|
|
|
137.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Guaranteed Debt |
|
|
463.7 |
|
|
|
415.9 |
|
|
|
418.9 |
|
|
|
409.6 |
|
|
|
380.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Underlying Debt (4) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Housing |
|
|
12.5 |
|
|
|
14.1 |
|
|
|
6.0 |
|
|
|
7.6 |
|
|
|
8.6 |
|
Municipal (5) |
|
|
0.2 |
|
|
|
0.1 |
|
|
|
0.1 |
|
|
|
0.0 |
|
|
|
0.0 |
|
Other |
|
|
0.0 |
|
|
|
0.0 |
|
|
|
12.1 |
|
|
|
15.0 |
|
|
|
13.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Underlying Debt |
|
|
12.7 |
|
|
|
14.2 |
|
|
|
18.2 |
|
|
|
22.6 |
|
|
|
22.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Public Sector Funded Debt |
|
|
14,093.6 |
|
|
|
12,891.7 |
|
|
|
11,841.5 |
|
|
|
12,150.5 |
|
|
|
11,436.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deduct Sinking Funds and Debt Retirement Fund |
|
|
2,919.8 |
|
|
|
2,599.4 |
|
|
|
2,094.8 |
|
|
|
1,906.8 |
|
|
|
2,011.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Public Sector Funded Debt |
|
$ |
11,173.8 |
|
|
$ |
10,292.3 |
|
|
$ |
9,746.7 |
|
|
$ |
10,243.7 |
|
|
$ |
9,424.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Per Capita ($) (6) |
|
$ |
11,931.4 |
|
|
$ |
10,972.6 |
|
|
$ |
10,413.1 |
|
|
$ |
10,954.7 |
|
|
$ |
10,088.9 |
|
As a Percentage of: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Income (6) |
|
|
45.7 |
% |
|
|
40.5 |
% |
|
|
36.6 |
% |
|
|
37.1 |
% |
|
|
32.6 |
% |
Gross Domestic Product at Market Prices (6) |
|
|
38.7 |
% |
|
|
34.5 |
% |
|
|
31.2 |
% |
|
|
32.3 |
% |
|
|
28.5 |
% |
|
|
|
(1) |
|
Debentures payable in foreign currencies and related sinking funds invested in foreign
currencies are reflected at rates of exchange in effect at March 31 in each of the years 2004
through 2008, respectively, and reflect currency-swap contracts. It does not include the debt
of Government Business Enterprises. |
|
(2) |
|
See table on “Funded Debt for the Consolidated Fund”, for more detailed information on this figure. |
|
(3) |
|
The Province guarantees certain debt of the Student Loan program and industrial development
agencies, and mortgages of the Housing Development Corporation. |
|
(4) |
|
Underlying debt does not include debt of Nova Scotia Housing Development Corporation ($314.0
million at March 31, 2008), a Provincial Crown Corporation established by an Act of the House
of Assembly, which debt is secured by mortgages issued to the Corporation. |
|
(5) |
|
See “Nova Scotia Municipal Finance Corporation” under “Certain Crown Corporation and Agencies”. |
|
(6) |
|
Population as of July 1 of the preceding calendar year Personal income and gross domestic
product at market prices are for the previous calendar year. |
58
CERTAIN CROWN CORPORATIONS AND AGENCIES
Crown corporations and agencies are special purpose entities to which the Province has
delegated responsibility for the operation of certain of its programs. These entities are subject
to policy direction by the Government and have been provided with financial assistance from the
Province, where required, either through debt guarantees, loans, equity investments, or grants. See
“Government Finance — Loans and Investments”, and “Provincial Debt — Guaranteed Debt”. The
Province prepares consolidated financial statements whereby the operating results of the crown
corporations and agencies became part of the consolidated Provincial surplus / (deficit). The more
significant of the Province’s corporations and agencies are discussed below.
Sydney Steel Corporation
Sydney Steel Corporation (“Sysco”), a Provincial Crown Corporation established by an Act of
the House of Assembly in 1967, owned a steel mill in Sydney, Nova Scotia that ceased operations in
July 2000. With the Corporation’s operations being discontinued, work was undertaken to dismantle
and sell the remaining assets, perform environmental clean up, and conduct development activities
for future land use.
The Province’s Statement of Operations for the year ended March 31, 2000, included an Unusual
Item for the sale of Sysco in the amount of $475.3 million. Included in this amount were $96.8
million for pensions and severance costs, $250 million for environmental remediation at Sysco,
$68.5 million for environmental costs at the Sydney Tar Ponds, $14 million for Sysco losses to
October 31, 2000, and $46 million for expected loss on sale of assets. As at March 31, 2000, the
Province assumed the outstanding debt of Sysco in an amount of $154.7 million.
During the period 2001-2006, the Province provided contributions of $58.8 million to the
Corporation to fund certain closure, demolition and remediation expenditures. It was determined
that the Corporation did not require these direct contributions due to better than expected
recoveries on asset and scrap sales since the closure. The Province directed the Corporation to
return these contributions to the Sysco Decommissioning Fund.
Sysco will continue to exist to address residual issues arising from historic operations (See
— Litigation).
Sydney Tar Ponds Agency
The Sydney Tar Ponds is a hazardous chemical waste site adjacent to Sysco created by
discharges from Sysco’s coke ovens into an adjacent creek. Engineering and environmental studies
have generated estimates for the cost of remediation of the Sydney Steel Corporation and adjacent
sites as well as the Sydney Tar Ponds site. As noted under Sydney Steel Corporation, the Province
recorded liabilities totaling $318.5 million in 2000, and in 2006-2007 there was a further $58.8
million contributed by Sydney Steel Corporation to the environmental site clean-up provision (Sysco
Decommissioning Fund). At March 31, 2008, $257.6 million remains unspent in the Sysco
Decommissioning Fund. The provision will continue to be utilized for future decommissioning,
demolition and remediation of Sysco’s and adjacent sites, including the Sydney Tar Ponds site.
Based on currently available information, the provision, in aggregate, appears to be sufficient to
cover the estimated costs to remediate these sites.
The Province of Nova Scotia and the Federal Government entered into a memorandum of
understanding on May 14, 2004 respecting further cost sharing this project. The agreement between
the Federal Government and the Province of Nova Scotia is expected to ensure the diligent and
cost-effective management of the remediation project. The sites are expected be cleaned up on a
cost-shared basis over eight years for a total of $400 million, with the Federal Government
contributing $280 million and the Province, the lesser of 40% of the actual cost incurred or $120
million.
In July 2006, the Joint Environmental Review Panel, an independent review panel established by
the Federal Government, released recommendations regarding the process of remediation of the Sydney
Tar Ponds and Coke Ovens Sites Remediation Project. The report contained numerous recommendations
regarding refinements to the clean-up plan and on-going monitoring. The Federal Government and
Province of Nova Scotia have approved a modified plan to clean up the Tar Ponds and Coke Ovens in
response to the 55 recommendations of the Joint Environmental Review Panel.
59
The proposed project is expected to treat contaminated Tar Ponds sediments in place with a
process known as solidification and stabilization, which involves mixing the sediments with
hardening agents like cement powder. Then the sites will be contained and capped within an
engineered containment system, followed by site development and long-term monitoring and
maintenance. The cleanup will not include incineration.
Nova Scotia Resources Limited
Nova Scotia Resources Limited (“NSRL”), formerly a corporation owned by the Province, was
established to invest in and manage the Province’s participation in petroleum, energy, and mineral
projects. The Province has engaged in transactions since 1999 to liquidate the assets of NSRL. The
total proceeds from the sale of NSRL assets amounted to $408 million. The Province recorded gains
on the sale of NSRL assets of $8.7 million in fiscal year 2003-2004. There were larger gains in
earlier fiscal years.
The Province, though NSRL, had a 50% working interest in the Deep Panuke project area that was
sold to the other 50% holder, PanCanadian Petroleum Limited (now EnCana Corporation), in October
1999, in exchange for a two per cent gross overriding royalty on the Province’s interest, which
translates into one per cent of all Deep Panuke petroleum revenues. The gross overriding royalty
was transferred in the summer of 2001 to 3052155 Nova Scotia Limited, a wholly owned Provincial
Crown Corporation.
The Crown Corporation 3052155 Nova Scotia Limited has assumed the Promissory Note, originally
issued by NSRL, with the Canada-Nova Scotia Offshore Petroleum Board in the amount of $2.5 million
as evidence of financial responsibility with respect to its abandonment obligations related to the
Cohasset-Panuke project. The Province has provided a guarantee on this note, which was in place as
at March 31, 2008.
Nova Scotia Municipal Finance Corporation
Nova Scotia Municipal Finance Corporation (“MFC”), a Provincial Crown Corporation established
by an Act of the House of Assembly in 1979, acts as a central borrowing agency for municipalities
and municipal enterprises in Nova Scotia. Under the incorporating legislation, municipalities and
municipal enterprises are required to raise their long-term capital requirements through the MFC
except for borrowings from the Federal Government, the Province, another municipality, or their
agencies.
The following table sets forth the revenues, expenditures and income for MFC for the five
fiscal years ended March 31, 2004 through March 31, 2008.
SUMMARY OF NET REVENUE FOR MUNICIPAL FINANCE CORPORATION
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2008 |
|
|
|
(in millions) |
|
Total Revenues |
|
$ |
30.8 |
|
|
$ |
33.1 |
|
|
$ |
33.8 |
|
|
$ |
34.0 |
|
|
$ |
35.6 |
|
Total Expenditures |
|
|
30.8 |
|
|
|
32.9 |
|
|
|
33.6 |
|
|
|
33.8 |
|
|
|
35.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Revenue |
|
$ |
0.0 |
|
|
$ |
0.2 |
|
|
$ |
0.2 |
|
|
$ |
0.2 |
|
|
$ |
0.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nova Scotia Power Finance Corporation
On August 12, 1992, the Province of Nova Scotia completed the public sale of all the common
shares of Nova Scotia Power Inc. (“NSPI”), an electric utility that had assumed the net operating
assets of Nova Scotia Power Corporation (“NSPC”). Prior to that date, the utility was a Provincial
Crown Corporation. Neither the Province nor NSP Finance Corporation will guarantee, assume or
otherwise be responsible for any obligations of NSPI, and NSPI has agreed to indemnify NSP Finance
Corporation and the Province against any claims arising out of the liabilities and commitments
assumed by NSPI.
In accordance with the Nova Scotia Power Corporation Privatization Agreement passed in 1992,
the Nova Scotia Power Finance Corporation provides for defeasance of its debt. The portfolio of
defeasance assets consists of
60
Nova Scotia Power Corporation, other provincial government and utilities, Federal Government
and Federal U.S. Treasury bonds, coupons or residuals.
61
FOREIGN EXCHANGE
Canada maintains a floating exchange rate for the Canadian dollar, which permits the rate to
be determined by fundamental market forces without intervention except as required to maintain
orderly market conditions.
Closing spot exchange rates for the U.S. dollar in Canada, expressed in Canadian dollars per
U.S. dollar, are shown in the table below for 2004 through 2008.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Spot Rates |
|
2004 |
|
|
2005 |
|
|
2006 |
|
|
2007 |
|
|
2008 |
|
|
High |
|
|
1.3957 |
|
|
|
1.2696 |
|
|
|
1.1794 |
|
|
|
1.1878 |
|
|
|
1.2935 |
|
Low |
|
|
1.1759 |
|
|
|
1.1518 |
|
|
|
1.0948 |
|
|
|
0.9066 |
|
|
|
0.9765 |
|
Close |
|
|
1.2020 |
|
|
|
1.1163 |
|
|
|
1.1654 |
|
|
|
0.9913 |
|
|
|
1.2180 |
|
Average Noon |
|
|
1.3015 |
|
|
|
1.2116 |
|
|
|
1.1341 |
|
|
|
1.0748 |
|
|
|
1.0660 |
|
|
Source: Bank of Canada |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On March 11, 2009 the closing spot rate for the US dollar in Canada, as reported by the Bank
of Canada, was $1.2862.
Unless otherwise specified or the context otherwise requires, the following table sets forth
the conversion rates used in this Annual Report for foreign currency borrowings.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
US (noon) |
|
Pound |
|
Japanese |
Closing Rate |
|
at March 31 |
|
|
Euro |
|
|
Dollar |
|
|
Sterling |
|
|
Yen |
|
|
|
|
|
2004 |
|
|
|
1.6109 |
|
|
|
1.3105 |
|
|
|
2.4116 |
|
|
|
0.012577 |
|
|
|
|
2005 |
|
|
|
1.5689 |
|
|
|
1.2096 |
|
|
|
2.2848 |
|
|
|
0.011283 |
|
|
|
|
2006 |
|
|
|
1.4169 |
|
|
|
1.1671 |
|
|
|
2.0299 |
|
|
|
0.009933 |
|
|
|
|
2007 |
|
|
|
1.5418 |
|
|
|
1.1529 |
|
|
|
2.2697 |
|
|
|
0.009806 |
|
|
|
|
2008 |
|
|
|
1.6244 |
|
|
|
1.0279 |
|
|
|
2.0407 |
|
|
|
0.010290 |
|
62
OFFICIAL STATEMENTS
The Minister of Finance or his authorized representatives acting in their official capacities
have supplied the information set forth in this Exhibit to Form 18-K.
63
TABLE 1 — STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2008
|
|
|
|
|
Sinking
Fund General |
|
$ |
738,198,657 |
|
Canada Pension Plan Fund (A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date |
|
|
Maturity |
|
|
Outstanding |
|
|
|
|
|
|
Coupon |
|
|
Canadian |
|
|
Sinking Funds |
|
Series |
|
Of Issue |
|
|
Date |
|
(in thousands) |
|
|
|
Rate |
|
|
Dollars |
|
|
(C) |
|
C30 |
|
01-Jun-89 |
|
01-Dec-08 |
|
|
78,450,000 |
|
|
CAD |
|
|
10.080 |
|
|
|
78,450,000 |
|
|
|
|
|
C31 |
|
01-Jun-90 |
|
01-Mar-10 |
|
|
85,218,000 |
|
|
CAD |
|
|
9.900 |
|
|
|
85,218,000 |
|
|
|
|
|
C32 |
|
01-May-91 |
|
01-Aug-10 |
|
|
46,648,000 |
|
|
CAD |
|
|
10.580 |
|
|
|
46,648,000 |
|
|
|
|
|
C34 |
|
01-May-92 |
|
02-Jul-11 |
|
|
78,408,000 |
|
|
CAD |
|
|
9.920 |
|
|
|
78,408,000 |
|
|
|
|
|
C35 |
|
03-May-93 |
|
02-Jul-12 |
|
|
55,808,000 |
|
|
CAD |
|
|
9.370 |
|
|
|
55,808,000 |
|
|
|
|
|
C36 |
|
01-Mar-99 |
|
01-Mar-19 |
|
|
27,102,000 |
|
|
CAD |
|
|
5.870 |
|
|
|
27,102,000 |
|
|
|
|
|
C37 |
|
03-Mar-00 |
|
03-Mar-20 |
|
|
73,922,000 |
|
|
CAD |
|
|
6.610 |
|
|
|
73,922,000 |
|
|
|
|
|
C38 |
|
02-Mar-01 |
|
02-Mar-21 |
|
|
78,277,000 |
|
|
CAD |
|
|
6.400 |
|
|
|
78,277,000 |
|
|
|
|
|
C39 |
|
01-Mar-02 |
|
01-Mar-22 |
|
|
96,251,000 |
|
|
CAD |
|
|
6.400 |
|
|
|
96,251,000 |
|
|
|
|
|
C40 (D) |
|
01-Mar-04 |
|
01-Mar-24 |
|
|
90,597,000 |
|
|
CAD |
|
|
5.390 |
|
|
|
90,597,000 |
|
|
|
|
|
C41 |
|
02-Jan-05 |
|
02-Jan-25 |
|
|
85,762,000 |
|
|
CAD |
|
|
5.270 |
|
|
|
85,762,000 |
|
|
|
|
|
C42 |
|
03-Mar-06 |
|
03-Mar-36 |
|
|
91,752,000 |
|
|
CAD |
|
|
4.700 |
|
|
|
91,752,000 |
|
|
|
|
|
C43 |
|
02-Mar-07 |
|
03-Mar-37 |
|
|
109,641,000 |
|
|
CAD |
|
|
4.570 |
|
|
|
109,641,000 |
|
|
|
|
|
C44 |
|
02-Mar-08 |
|
02-Mar-38 |
|
|
81,516,000 |
|
|
CAD |
|
|
4.850 |
|
|
|
81,516,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
1,079,352,000 |
|
|
|
|
|
|
|
|
|
|
$ |
1,079,352,000 |
|
|
$ |
738,198,657 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
64
TABLE 1 — STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2008
Medium-Term Promissory Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date |
|
|
Maturity |
|
|
Amount |
|
|
|
|
|
|
Coupon |
|
|
Canadian |
|
|
Sinking Funds |
|
Series |
|
Of Issue |
|
|
Date |
|
|
Outstanding |
|
|
|
|
|
|
Rate |
|
|
Dollars |
|
|
(C) |
|
P21 |
|
30-Oct-97 |
|
14-Mar-14 |
|
$ |
44,000,000 |
|
|
CAD |
|
|
9.000 |
|
|
$ |
44,000,000 |
|
|
|
|
|
P35 (D) |
|
21-May-99 |
|
21-May-08 |
|
|
25,000,000 |
|
|
CAD |
|
|
5.580 |
|
|
|
25,000,000 |
|
|
|
|
|
P49 |
|
16-Apr-01 |
|
16-Apr-08 |
|
|
40,000,000 |
|
|
CAD |
|
Floating |
|
|
40,000,000 |
|
|
|
|
|
P75 |
|
16-Apr-03 |
|
16-Apr-08 |
|
|
125,000,000 |
|
|
CAD |
|
Floating |
|
|
125,000,000 |
|
|
|
|
|
P77 (D) (G) |
|
14-Jul-03 |
|
14-Jul-15 |
|
|
35,000,000 |
|
|
CAD |
|
Step-Up |
|
|
35,000,000 |
|
|
|
|
|
P78 (D) |
|
02-Sep-03 |
|
01-Jun-17 |
|
|
50,000,000 |
|
|
CAD |
|
|
5.460 |
|
|
|
50,000,000 |
|
|
|
|
|
P102 (D) |
|
26-Apr-06 |
|
01-Jun-13 |
|
|
100,000,000 |
|
|
CAD |
|
|
4.500 |
|
|
|
100,000,000 |
|
|
|
|
|
P103 (D) |
|
24-Oct-06 |
|
24-Oct-21 |
|
|
200,000,000 |
|
|
CAD |
|
|
4.450 |
|
|
|
200,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
619,000,000 |
|
|
|
|
|
|
|
|
|
|
$ |
619,000,000 |
|
|
$ |
0.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65
TABLE 1 — STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2008
Payable in Canadian Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sinking Funds in |
|
|
|
Date |
|
|
Maturity |
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
Canadian |
|
|
Canadian Dollars |
|
Series |
|
Of Issue |
|
|
Date |
|
|
Outstanding |
|
|
|
|
|
|
Rate |
|
|
Dollars |
|
|
(C) |
|
7T (B) |
|
07-Sep-78 |
|
07-Sep-08 |
|
|
800,000 |
|
|
CAD |
|
|
9.750 |
|
|
$ |
800,000 |
|
|
|
|
|
9K |
|
30-Jan-92 |
|
30-Jan-22 |
|
|
200,000,000 |
|
|
CAD |
|
|
9.600 |
|
|
|
200,000,000 |
|
|
|
62,382,306 |
|
9Z |
|
03-Oct-97 |
|
01-Jun-27 |
|
|
550,000,000 |
|
|
CAD |
|
|
6.600 |
|
|
|
550,000,000 |
|
|
|
|
|
A4 |
|
20-Jan-99 |
|
01-Jun-09 |
|
|
250,000,000 |
|
|
CAD |
|
|
5.400 |
|
|
|
250,000,000 |
|
|
|
|
|
A4 |
|
05-Mar-99 |
|
01-Jun-09 |
|
|
250,000,000 |
|
|
CAD |
|
|
5.400 |
|
|
|
250,000,000 |
|
|
|
|
|
A8 |
|
01-Nov-00 |
|
01-Sep-10 |
|
|
300,000,000 |
|
|
CAD |
|
|
6.400 |
|
|
|
300,000,000 |
|
|
|
|
|
A8 |
|
26-Jun-00 |
|
01-Sep-10 |
|
|
300,000,000 |
|
|
CAD |
|
|
6.400 |
|
|
|
300,000,000 |
|
|
|
|
|
B1 |
|
14-May-01 |
|
01-Jun-11 |
|
|
350,000,000 |
|
|
CAD |
|
|
6.250 |
|
|
|
350,000,000 |
|
|
|
|
|
B1 |
|
12-Oct-01 |
|
01-Jun-11 |
|
|
300,000,000 |
|
|
CAD |
|
|
6.250 |
|
|
|
300,000,000 |
|
|
|
|
|
B2 |
|
12-Jun-01 |
|
01-Dec-31 |
|
|
300,000,000 |
|
|
CAD |
|
|
6.600 |
|
|
|
300,000,000 |
|
|
|
|
|
B5 |
|
01-Dec-03 |
|
01-Jun-33 |
|
|
200,000,000 |
|
|
CAD |
|
|
5.800 |
|
|
|
200,000,000 |
|
|
|
|
|
B5 |
|
30-Jan-04 |
|
01-Jun-33 |
|
|
200,000,000 |
|
|
CAD |
|
|
5.800 |
|
|
|
200,000,000 |
|
|
|
|
|
B5 |
|
12-Sep-03 |
|
01-Jun-33 |
|
|
200,000,000 |
|
|
CAD |
|
|
5.800 |
|
|
|
200,000,000 |
|
|
|
|
|
B6 |
|
14-Jan-05 |
|
14-Jan-15 |
|
|
200,000,000 |
|
|
CAD |
|
|
4.700 |
|
|
|
200,000,000 |
|
|
|
|
|
B7 |
|
30-Jun-05 |
|
01-Jun-35 |
|
|
150,000,000 |
|
|
CAD |
|
|
4.900 |
|
|
|
150,000,000 |
|
|
|
|
|
B7 |
|
03-Jun-05 |
|
01-Jun-35 |
|
|
200,000,000 |
|
|
CAD |
|
|
4.900 |
|
|
|
200,000,000 |
|
|
|
|
|
B8 |
|
25-Jan-06 |
|
01-Jun-37 |
|
|
300,000,000 |
|
|
CAD |
|
|
4.500 |
|
|
|
300,000,000 |
|
|
|
|
|
B8 |
|
10-Nov-06 |
|
01-Jun-37 |
|
|
200,000,000 |
|
|
CAD |
|
|
4.500 |
|
|
|
200,000,000 |
|
|
|
|
|
B9 |
|
18-Aug-06 |
|
18-Aug-16 |
|
|
300,000,000 |
|
|
CAD |
|
|
4.600 |
|
|
|
300,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Payable in Canadian dollars |
|
|
|
|
|
$ |
4,750,800,000 |
|
|
|
|
|
|
|
|
|
|
$ |
4,750,800,000 |
|
|
$ |
62,382,306 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
66
TABLE 1 — STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2008
Payable in Pound Sterling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent |
|
Sinking Funds in |
|
|
Date |
|
Maturity |
|
Amount |
|
|
|
|
|
|
|
|
|
in Canadian |
|
Canadian Dollars |
Series |
|
Of Issue |
|
Date |
|
Outstanding |
|
|
|
|
|
Rate |
|
Dollars |
|
(C) |
8C (E) |
|
31-Oct-81 |
|
31-Oct-11 |
|
|
23,250,000 |
|
|
GBP |
|
|
16.75 |
|
|
|
56,283,147 |
|
|
|
|
|
8P (E) |
|
18-Apr-84 |
|
18-Apr-19 |
|
|
60,000,000 |
|
|
GBP |
|
|
11.75 |
|
|
|
114,386,580 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
83,250,000 |
|
|
|
|
|
|
|
|
|
|
|
170,669,727 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments relating to swap agreements |
|
|
|
|
|
|
(83,250,000 |
) |
|
|
|
|
|
|
|
|
|
|
(170,669,727 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Payable in Pound Sterling |
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
Payable
in Euro
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent |
|
|
Sinking Funds in |
|
|
|
Date |
|
|
Maturity |
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
in Canadian |
|
|
Canadian Dollars |
|
Series |
|
Of Issue |
|
|
Date |
|
|
Outstanding |
|
|
|
|
|
|
Rate |
|
|
Dollars |
|
|
(C) |
|
P44 (E) |
|
24-Feb-00 |
|
24-Feb-10 |
|
|
50,000,000 |
|
|
EUR |
|
|
5.20 |
|
|
|
72,235,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
50,000,000 |
|
|
|
|
|
|
|
|
|
|
|
72,235,000 |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments relating to swap agreements |
|
|
|
|
|
|
(50,000,000 |
) |
|
|
|
|
|
|
|
|
|
|
(72,235,000 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Payable in Euro |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
67
TABLE 1 — STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2008
Payable in United States Dollars
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equivalent |
|
|
Sinking Funds in |
|
|
|
Date |
|
|
Maturity |
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
in Canadian |
|
|
Canadian Dollars |
|
Series |
|
Of Issue |
|
|
Date |
|
|
Outstanding |
|
|
|
|
|
|
Rate |
|
|
Dollars |
|
|
(C) |
|
Hedged |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
9N (E) |
|
27-Jul-93 |
|
27-Jul-13 |
|
|
300,000,000 |
|
|
USD |
|
|
7.250 |
|
|
|
299,850,000 |
|
|
|
170,080,906 |
|
8V (E) |
|
15-Mar-86 |
|
15-Mar-16 |
|
|
150,000,000 |
|
|
USD |
|
|
8.875 |
|
|
|
205,725,000 |
|
|
|
120,788,068 |
|
9B (E) |
|
01-Feb-89 |
|
01-Feb-19 |
|
|
200,000,000 |
|
|
USD |
|
|
9.500 |
|
|
|
198,000,000 |
|
|
|
79,206,136 |
|
9C (E) |
|
01-Jul-89 |
|
01-Jul-19 |
|
|
200,000,000 |
|
|
USD |
|
|
8.875 |
|
|
|
199,900,000 |
|
|
|
74,257,947 |
|
9D (E) |
|
15-Nov-89 |
|
15-Nov-19 |
|
|
244,000,000 |
|
|
USD |
|
|
8.250 |
|
|
|
246,318,000 |
|
|
|
164,184,849 |
|
9E (E) |
|
01-Mar-90 |
|
01-Mar-20 |
|
|
300,000,000 |
|
|
USD |
|
|
9.250 |
|
|
|
409,200,000 |
|
|
|
159,403,097 |
|
9J (E) |
|
01-May-91 |
|
01-May-21 |
|
|
300,000,000 |
|
|
USD |
|
|
9.125 |
|
|
|
312,002,107 |
|
|
|
100,660,908 |
|
9L (E) |
|
01-Apr-92 |
|
01-Apr-22 |
|
|
300,000,000 |
|
|
USD |
|
|
8.750 |
|
|
|
379,516,788 |
|
|
|
108,387,576 |
|
9M (E) |
|
30-Jul-92 |
|
30-Jul-22 |
|
|
300,000,000 |
|
|
USD |
|
|
8.250 |
|
|
|
329,310,000 |
|
|
|
98,141,914 |
|
B4 (D)(E) |
|
26-Feb-02 |
|
27-Feb-12 |
|
|
500,000,000 |
|
|
USD |
|
|
5.750 |
|
|
|
795,000,000 |
|
|
|
|
|
D1 (D)(E) |
|
26-Jan-07 |
|
26-Jan-17 |
|
|
500,000,000 |
|
|
USD |
|
|
5.125 |
|
|
|
586,500,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,294,000,000 |
|
|
|
|
|
|
|
|
|
|
|
3,961,321,894 |
|
|
$ |
1,075,111,402 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments relating to swap agreements |
|
|
|
|
|
|
(3,294,000,000 |
) |
|
|
|
|
|
|
|
|
|
|
(3,961,321,894 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Payable in USD: |
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LONG TERM TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
10,653,378,620 |
|
|
$ |
1,875,692,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
68
TABLE 1 — STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2008
Short Term Promissory Notes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Date |
|
|
Maturity |
|
|
Amount |
|
|
|
|
|
|
|
|
|
|
Canadian |
|
|
Sinking Funds |
|
Series |
|
Of Issue |
|
|
Date |
|
|
Outstanding |
|
|
|
|
|
|
Rate |
|
|
Dollars |
|
|
(C) |
|
P85 (D)(F) |
|
19-Feb-07 |
|
19-Aug-08 |
|
|
20,000,000 |
|
|
CAD |
|
Step-Up |
|
$ |
20,000,000 |
|
|
|
|
|
P86 (D)(F) |
|
01-Oct-07 |
|
01-Apr-08 |
|
|
35,000,000 |
|
|
CAD |
|
Step-Up |
|
|
35,000,000 |
|
|
|
|
|
P87 (D)(F) |
|
08-Oct-06 |
|
08-Apr-08 |
|
|
55,000,000 |
|
|
CAD |
|
Step-Up |
|
|
55,000,000 |
|
|
|
|
|
P90 (D)(F) |
|
10-Feb-07 |
|
10-Aug-08 |
|
|
30,000,000 |
|
|
CAD |
|
Step-Up |
|
|
30,000,000 |
|
|
|
|
|
P91 (D)(F) |
|
01-Feb-07 |
|
01-Aug-08 |
|
|
20,000,000 |
|
|
CAD |
|
Step-Up |
|
|
20,000,000 |
|
|
|
|
|
P92 (D)(F) |
|
17-Feb-07 |
|
17-Aug-08 |
|
|
50,000,000 |
|
|
CAD |
|
Step-Up |
|
|
50,000,000 |
|
|
|
|
|
P93 (D)(F) |
|
25-Nov-06 |
|
25-May-08 |
|
|
35,000,000 |
|
|
CAD |
|
Step-Up |
|
|
35,000,000 |
|
|
|
|
|
P94 (D)(F) |
|
02-Dec-06 |
|
02-Jun-08 |
|
|
25,000,000 |
|
|
CAD |
|
Step-Up |
|
|
25,000,000 |
|
|
|
|
|
P95 (D)(F) |
|
22-Dec-06 |
|
22-Jun-08 |
|
|
30,000,000 |
|
|
CAD |
|
Step-Up |
|
|
30,000,000 |
|
|
|
|
|
P96 (D)(F) |
|
22-Nov-06 |
|
22-May-08 |
|
|
30,000,000 |
|
|
CAD |
|
Step-Up |
|
|
30,000,000 |
|
|
|
|
|
P97 (D)(F) |
|
22-Nov-06 |
|
22-May-08 |
|
|
25,000,000 |
|
|
CAD |
|
Step-Up |
|
|
25,000,000 |
|
|
|
|
|
P98 (D)(F) |
|
22-Dec-06 |
|
22-Jun-08 |
|
|
25,000,000 |
|
|
CAD |
|
Step-Up |
|
|
25,000,000 |
|
|
|
|
|
P99 (D)(F) |
|
28-Feb-07 |
|
28-Aug-08 |
|
|
20,000,000 |
|
|
CAD |
|
Step-Up |
|
|
20,000,000 |
|
|
|
|
|
P100 (D)(F) |
|
01-Nov-06 |
|
01-May-08 |
|
|
20,000,000 |
|
|
CAD |
|
Step-Up |
|
|
20,000,000 |
|
|
|
|
|
P101 (D)(F) |
|
21-Dec-06 |
|
01-Jun-08 |
|
|
15,000,000 |
|
|
CAD |
|
Step-Up |
|
|
15,000,000 |
|
|
|
|
|
P104 (D)(F) |
|
15-May-07 |
|
15-May-08 |
|
|
20,000,000 |
|
|
CAD |
|
Step-Up |
|
|
20,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
455,000,000 |
|
|
|
|
|
|
|
|
|
|
$ |
455,000,000 |
|
|
$ |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHORT TERM TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
455,000,000 |
|
|
|
0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GRAND TOTAL |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
11,108,378,620 |
|
|
$ |
1,875,692,366 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(A) |
|
Debentures held by the Canada Pension Plan Fund are payable up to 30 years after their
respective dated of issue, are not negotiable, not transferable or assignable, but are
redeemable in whole or in part before maturity at the option of the Minister of Finance of
Canada, on six months’ prior notice when he deems it necessary in order to meet the
requirements of the Canada Pension Plan. |
|
(B) |
|
Debenture issue to be retired through annual principal payments. |
|
(C) |
|
For designated sinking funds, payments normally commence on the first anniversary date of the
issue of the debenture and are designed to retire the debt over the term of the issue. Sinking
Fund investments consist primarily of debentures of the Province of Nova Scotia, other
provincial governments and the Government of Canada. |
|
(D) |
|
The Province has executed swap contracts to convert certain interest payments from a fixed to
floating for the fiscal year ended March 31, 2008. |
|
(E) |
|
The Province has executed currency swap contracts to convert foreign denominated debt into
Canadian denominated debt. |
|
(F) |
|
Consists of numerous short-term promissory notes totaling $455 million, extendible in whole
but not in part, on the initial extendible date and on each extendible date thereafter, on 15
days notice, at the option of the Province. |
|
(G) |
|
Consists of one $35 million in mid-term promissory notes, redeemable in whole but not in
part, on the initial redemption date and, on each redemption date thereafter, on 15 days
notice, at the option of the Province. |
69