Accountability lacking: Nova Scotia auditor general takes aim at blown budgets

HALIFAX — Nova Scotia's auditor general accused the provincial government Tuesday of lacking accountability and transparency, saying the province is unique in Canada when it comes to approving extra spending when departments have blown their budgets.

"I felt it was extremely important ... to point out how Nova Scotia is different from the rest of the country — in fact, offside from the rest of the country," Kim Adair told a news conference after she released her annual financial report for 2022.

The province's Finance Act is the only one of its kind in Canada that allows for extra spending to be approved solely by the government of the day without being subjected to a review, vote or approval by the legislature.

"It is up to the government to decide whether or not they want to amend the 2010 Finance Act and bring it into line with the rest of Canada," Adair said. "I think it's time. Nova Scotians deserve better transparency."

Adair's report reveals that during the past 10 years, successive provincial governments have used vague cabinet orders to approve $4.7 billion in over-budget spending.

"That's $4.7 billion in public funds going out the door without debate or challenge through the legislature," she said.

In 2012-13, the "additional appropriations" amounted to $263 million. By 2021-22, that amount had more than tripled to $896 million after peaking at $1.1 billion the previous year — the first year of the COVID-19 pandemic.

As for the cabinet orders making that spending possible, Adair cited an example from Sept. 29, 2021, which included a murky reference to "supplemental sums." The document doesn't say how much extra money was needed — $424 million — or which departments had asked for the funds. That information was included in a so-called "Schedule A," which was never released to the public, Adair said.

In 2021-22, most of the extra money was requested by the departments of advanced education, municipal affairs, tourism and health. And in the previous year, the Health Department received almost half of the extra funds as the pandemic grew.

Lisa Lachance, the New Democrats' finance spokesperson, said Nova Scotians deserve to know how the government is managing its budget.

"Things are tight for Nova Scotia families and people are making difficult choices, such as between heating and eating," Lachance said in a statement. "We are out of line from other provinces and need to do better."

Adair is recommending the provincial Finance Department assess whether its current practices provide for "adequate accountability and transparency," and consider whether changes are needed to align with practices elsewhere in Canada.

In its official response to Adair's recommendation, the Finance Department said it is not planning to propose any legislative changes.

"(Finance and Treasury Board) considers the spending authorities as established in the Finance Act to be appropriate and is of the view that these were well understood by the legislature when the Finance Act was passed," the department said in a written response that is included in Adair's report.

"While other jurisdictions may have different processes, (the department) is confident the spending authorities and processes permitted under the Finance Act are appropriately transparent and support public accountability."

The department, however, did commit to releasing Schedule A documents and producing online fact sheets for the media summarizing the reasons behind additional cabinet-approved spending.

Premier Tim Houston was unavailable for comment Tuesday, but Finance Department spokesman Steven Stewart said the government needs to have a way of dealing with unexpected costs.

"This allows the province to respond to emergencies," Stewart said. "This process is transparent and accountable and has been in place since 2010 ... We don't believe a change is needed to the legislation."

This report by The Canadian Press was first published Dec. 6, 2022.

Michael MacDonald, The Canadian Press