Tim Houston signs documents as he is sworn in as Nova Scotia's new Progressive Conservative premier in Halifax on Tuesday Aug. 31, 2021. Nova Scotia has closed the books on fiscal 2020-21 registering a COVID-19 driven deficit of $341.6 million — a $396.6 million dip from the $55 million surplus forecast in last year's budget. THE CANADIAN PRESS/Tim Krochak-POOL

HALIFAX - Nova Scotia's deficit for the 2020-21 fiscal year is $341.6 million — a figure the province's finance minister says won't affect the new Tory government's election promise to spend significantly on health care.

Allan MacMaster closed the books for the previous fiscal year on Thursday, telling reporters that COVID-19 was the main reason for a $396.6-million drop from the $55-million surplus forecast in the budget tabled by the previous Liberal government in February 2020, just before the pandemic hit.

MacMaster said while there were extra expenditures because of the pandemic, the response by Nova Scotians in adhering to COVID-19 protocols and keeping virus numbers down actually helped lessen the overall impact to the economy.

"We could have had more extended lockdowns, which could have impacted our economy more greatly," he said. "Nova Scotians took care of themselves, and as a result the economy restarted more quickly than in some other jurisdictions."

MacMaster said the province responded with close to $940 million in pandemic-related operating and capital spending during the fiscal year that ended March 31, helped by $462.2 million in federal aid.

Total expenses increased by nearly $219 million to $12.63 billion because of increased support for health-care services during the pandemic and to support various sectors of the economy. As well, total revenues were down by $178 million because of lower tax revenue and federal transfer payments.

The Progressive Conservatives, who were elected to a majority government Aug. 17, campaigned almost solely on fixing the province's ailing health-care system.

The party pledged $430 million in spending for the sector during their first year in power for areas including a pension plan for doctors, the extension of operating room hours on weekdays and 2,500 more long-term care beds.

MacMaster said that plan won't change, based on what he's seen to date.

"We did say that we would deficit spend if necessary to fix health care, and we intend to do that," he said.

The minister said the government would also spend more if necessary to meet needs that arise as a result of the ongoing pandemic, despite a net debt that has grown to $16.4 billion from $15.2 billion since the end of March, 2020.

MacMaster said the rising debt won't effect the government's ability to operate as long as it sticks to the fiscal plan in its platform. He is expected to present an update on the current fiscal year by the end of this month.

Former Liberal finance minister Labi Kousoulis tabled the 2021-22 budget in late March. It projected a $585-million deficit caused by pandemic costs, including an estimated $350 million for such things as personal protective equipment and vaccination clinics around the province.

This report by The Canadian Press was first published Sept. 16, 2021.

News from © The Canadian Press, 2021