Finance Minister Jamie Muir announced proposed changes to the Provincial Finance Act today, April 30. The Offshore Offset Revenue Expenditure Act, a proposed amendment to the Provincial Finance Act, will allow the province of Nova Scotia to use funds that are earmarked for debt reduction to fund programs and services. “The dramatic downturn of the economy has made government take a long hard, look at the way we do things,” said Finance Minister Jamie Muir. “While we remain committed to reducing the debt, we know that without this change, we would have to make significant reductions to health care, education and social services.” In 2005, the government adopted the Debt Reduction Plan, placing debt management along with balanced budgets as a central priority of fiscal management. Some provisions of the plan were given force by amendments to the Provincial Finance Act. The act was amended to ensure that a payment of $830 million from the government of Canada for the offshore offset would go to debt reduction. The province will introduce a new Debt Management Plan in 2009 to replace the Debt Reduction Plan of 2005, which will involve the amendment to the Provincial Finance Act. The Offshore Offset Revenue Expenditure Act would amend the Provincial Finance Act by repealing clauses in section 76, allowing government to spend the offshore offset-related surplus on programs and services. The amendment will not remove the prohibition against tabling a deficit budget. It simply allows offshore revenue to be used as it normally would under standard accounting practice, and as it is in all other provinces. The amendments to the Provincial Finance Act are consistent with generally accepted accounting principles. In effect, the definition of “deficit” under the act will be the same as the definition under generally accepted accounting principles.