Pandemic cost Nova Scotia over $900 million: auditor general report

A new report by the office of Nova Scotia’s auditor general reveals the COVID-19 pandemic has already cost the province over $900 million.

The report, prepared by acting Auditor General Terry Spicer, says the province budgeted a projected surplus of $55 million before the pandemic began in March.

Now, the province is forecasting a deficit of $853 million for 2020-21.

According to the auditor general report, Nova Scotia’s economy is expected to shrink by 5.5 per cent this year.

The province’s net debt is expected to increase by an additional $1.2 billion during 2021-21 from what was originally budgeted, according to Spicer’s report.

Nova Scotia has also spent $120 million on COVID-19 relief efforts since March, with that number expected to balloon to $460 million by the end of 2021.

This includes $100 million to be administered by Dalhousie University, and deferred provincial loan payments of $151 million.

The province also “committed $270 million in cash advances for university and colleges, $380 million in loans for municipalities and is projected to spend $228 million in infrastructure stimulus funding next year.”

The Department of Health and Wellness projects its COVID-19 spending will cost $331 million in the 2020-21 fiscal year. This number includes the cost of personal protective equipment.

CLEAN REPORT, BUT WEAKNESSES IDENTIFIED

For the 20th year in a row, the auditor general report identified no significant issues with the quality of the information in provincial financial statements.

“This is an accomplishment that governments over the past 20 years should take pride in,” wrote Spicer in the report.

However, weaknesses were found in two provincial departments: the Department of Service Nova Scotia and Internal Services and the Department of Lands and Forestry, which the report says “should be addressed in a timely manner.”

IMPROVED CYBERSECURITY NEEDED

Spicer's report also says the COVID-19 pandemic is highlighting the need for more robust cybersecurity and anti-fraud measures as government employees are forced to work remotely.

However, he says the provincial government isn't working fast enough to manage those risks.

Spicer notes that the federal government's Canadian Centre for Cybersecurity has warned of an increase in attempts to access and attack networks used by remote workers.

The audit finds that 10 provincial government departments, nine public service units and 19 government organizations have not completed fraud risk assessments.

It adds that Service Nova Scotia, which helps citizens access government programs and services, is lagging behind on finalizing its regulations around cybersecurity.

The auditor general cautions that fraud in the public sector can result in the loss of taxpayer funds and erode the public's confidence in government if the risk isn't properly handled.

With files from the Canadian Press.