This editorial in today's Herald sums up what happened with the province's finances. This isn't the right forum for it, so I won't post the full content of the piece, but it's worth a read.
I'm gonna quote the most relevant section, though:
Quote:
Again, the answer is in the numbers. From 2003-2004 through 2008-2009, Mr. O’Neill wrote, Nova Scotia was the beneficiary of extraordinary growth in federal payments, which rose by an average eight per cent a year, to the province.
Those large increases were largely fuelled by substantial, but temporary, hikes in offshore royalties and federal transfers.
Previous Tory governments, unfortunately, responded by using the extra dollars to hike program spending — by about 7.4 per cent a year, on average — over the same five-year period. With offshore royalties and federal transfers now dropping, the province simply doesn’t have the money to keep funding all those previous commitments.
"In all categories save community services, program spending grew at a substantially higher rate than would be sustainable over the long term," wrote Mr. O’Neill."
|
In other words, everything looked good, but the provinces financial house was built on sand.