HANSARD

 

NOVA SCOTIA HOUSE OF ASSEMBLY

 

 

COMMITTEE

 

ON

 

PUBLIC ACCOUNTS

 

 

Wednesday, June 10, 2026

 

 

COMMITTEE ROOM

 

 

 

 

 

 

 

Additional Appropriations and Alternative Procurement

 

 

 

 

 

 

 

 

 

 

Printed and Published by Nova Scotia Hansard Reporting Services

 

Public Accounts Committee

Susan Leblanc (Chair)

Tom Taggart (Vice-Chair)

Hon. Trevor Boudreau

Tim Outhit

Rick Burns

Dianne Timmins

Lisa Lachance

Hon. Iain Rankin

Hon. Becky Druhan

 

[Tom Taggart acted as the Chair for this meeting.]

 

[Tim Outhit was replaced by Brad McGowan.]

[Dianne Timmins was replaced by Adegoke Fadare.]

[Lisa Lachance was replaced by Paul Wozney.]

 

 

 

 

In Attendance:

 

Robin Dann

Administrative Support Clerk

 

Tamer Nusseibeh

Legislative Committee Clerk

 

Gordon Hebb

Chief Legislative Counsel

 

 

 

 

 

 

 

 

 

WITNESSES

 

Department of Finance and Treasury Board

Kelliann Dean - Executive Deputy Minister

Robert Bourgeois - Controller

Department of Service Nova Scotia

Joanne Munro - Deputy Minister

Chris Mitchell - Executive Director, Strategic Sourcing

Angela Paulin - Senior Executive Director, Trade and Economic Policy, Intergovernmental Affairs

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

HALIFAX, WEDNESDAY, JUNE 10, 2026

 

STANDING COMMITTEE ON PUBLIC ACCOUNTS

 

9:00 A.M.

 

CHAIR

Susan Leblanc

 

VICE-CHAIR

Tom Taggart

 

 

THE CHAIR (Tom Taggart): Order. Good morning, everyone, and welcome. Thanks for being here. This is the Standing Committee on Public Accounts. The mandate is:

 

The Public Accounts Committee is established for the purpose of reviewing the public accounts, the annual report or other report of the Auditor General and any other financial matters respecting the public funds of the Province.

 

My name is Tom Taggart. I’m the MLA for Colchester North. I’m Vice-Chair of this committee. Before we start, I’d like to remind everyone to please have their phones on silent. Should there be any need to leave the building, we will exit through the doors on Granville Street and gather up at Grand Parade.

 

At this time, I’d like to ask the committee members to introduce themselves, beginning with the member nearest on my left here. MLA Boudreau.

 

[The committee members introduced themselves.]

 

THE CHAIR: Also with us, we have officials from the Auditor General’s Office, the Legislative Counsel Office, and the Legislative Committees Office. On today’s agenda, we have officials with us from the Department of Finance and Treasury Board and the Department of Service Nova Scotia with regards to Additional Appropriations and Alternative Procurement. At this time, I’d like to ask the witnesses to introduce themselves, beginning with the witness on my left here.

 

[The witnesses introduced themselves.]

 

THE CHAIR: I’d like to invite Executive Deputy Minister Dean to make opening remarks, and then Deputy Minister Munro.

 

KELLIANN DEAN: Thank you for the opportunity to appear before you today to speak about alternative procurement and additional appropriations. We’ll be happy to answer your questions after our brief introductory remarks.

 

We’ve been here a number of times on this topic, but I’d like to start by explaining additional appropriations for the benefit of those who may not remember. After the budget is tabled, each department’s estimated amount of spending authority - their appropriation - is approved. This gives departments the authority to spend within this amount. But this is an estimate. Things come up throughout the year, and this spending might need to be adjusted to better reflect Nova Scotians’ needs and priorities.

 

If there is an emergency like a wildfire, or use of a service goes up and more spending is required, there is an additional appropriation. Additional appropriations may also be triggered when one department has money in its budget that it transfers to another department. Governments set priorities based on what they believe are the areas of greatest need, and their spending decisions reflect those priorities. This government has chosen, over the last several years, to spend significantly on health care, housing, long-term care, and reducing the tax burden on Nova Scotians.

 

It is also investing in natural resources development to grow our revenues, so we can fund more of the services Nova Scotians need and expect. These are the decisions we elect governments to make. Alternative procurements are simply one tool departments can use to achieve their mandates.

 

I know Deputy Minister Munro has some remarks as well. After that, we look forward to answering the members’ questions.

 

THE CHAIR: Deputy Minister Munro.

 

JOANNE MUNRO: I’d like to start by thanking the committee for the invitation to join you today to talk about alternative procurements. The topic continues to be of interest to many. I welcome today’s meeting to clarify when and how alternative procurements are used, and the procedures and protocols followed in accordance with the Canadian Free Trade Agreement.

 

Before I continue, I would like to introduce both Chris Mitchell, the chief procurement officer, and Angela Paulin. Angela is the senior executive director for Trade and Economic Policy with the Department of Intergovernmental Affairs. We invited Angela to join us this morning because so much of how we manage alternative procurements is anchored in the Canadian Free Trade Agreement. Angela has first-hand experience negotiating these agreements, so we are very pleased she could join us today to help answer your questions.

 

Chair, while preparing for today’s session, the team and I talked a lot about the term “alternative procurement.” In and of itself, it implies that there is a choice, and that choice could be based on convenience, perhaps, even so far as the easy way out where rules and procedures don’t need to be followed. I can assure you that is not the case. ALTPs, as they have come to be known, are a legitimate part of the procurement process in Nova Scotia and, in fact, across the country. Exemptions to competitive processes are followed as set out in the various trade agreements. Indeed, if the decisions made are not supported by the trade agreement language, the Province could be subject to legal or trade tribunal challenges. These, I would like to point out, have not occurred to date. The Province’s procurement activities are guided by the Public Procurement Act and the Public Procurement Policy. This includes a conflict-of-interest declaration to ensure everyone involved or working on the procurement file is free of perceived or actual conflicts or biases.

 

The Act and Policy work together to ensure the procurement of goods, services, and construction by public sector entities results in best value for Nova Scotians. Alternative procurements follow specific provisions under the Canadian Free Trade Act. They allow governments to protect essential public services and the public interest. Over the past six years, the trend for using ALTPs has remained consistent and steady - around 28 to 30 percent per year for contracts awarded. Alternative procurements are conducted in fair, open, and transparent processes. They are not new, they are not a work around, and they are not used to avoid tendering projects. Alternative procurements are a legitimate way of doing business, not only in our province but across the country.

 

And with that, Chris and I will be pleased to answer your questions along with Angela and Executive Deputy Minister Dean and Robert.

 

THE CHAIR: Thank you very much. We’re going to start the question portion of our meeting. We start the first round with the NDP caucus for 20 minutes, followed by the Liberal and then the PC caucus. I just want to say that at the end of the 20 minutes, regardless of where we are in the discussion, I cut it off. It’s just the rules, I guess.

 

We will begin our meeting or questioning with MLA Wozney.

PAUL WOZNEY: This government has spent $6.7 billion outside the budget process since being elected in 2021. Earlier this year for the fourth year in a row, the Minister of Finance and Treasury Board rejected the Auditor General’s recommendation to increase transparency around this kind of spending. Because of this government’s budget decisions, communities are losing libraries, museums, and services they rely on with little explanation as to why. People are losing trust, and change is needed.

 

I’m wondering if Executive Deputy Minister Dean might comment on why the department has continuously refused to act on the AG’s recommendation to increase transparency around out-of-budget spending?

 

THE CHAIR: Executive Deputy Minister Dean.

 

KELLIANN DEAN: Certainly this has been a topic of discussion, and our minister has been clear that this government is not going to change the Finance Act, and that the process that we follow continues to demonstrate accountability and transparency for Nova Scotians in how money is being spent.

 

Maybe if I can just level set. The budget is approved in the House of Assembly and it is debated. That becomes the foundation for our spending throughout the year. Whenever there is a deviation from that that is over a department’s appropriated amount, it requires an additional appropriation. Those appropriations are reported on at every forecast period - four times a year - so that everybody can understand where there have been changes. Not all of the appropriations are actually the result of an overspend. It could be a transfer from one department to another or one budget area into another budget area - again, to demonstrate clearly where there is a change from what was appropriated in the budget and where a department is at that point in time.

 

Over the years, there have been opportunities where the government has chosen to continue to invest in priority areas. For example, back in 2022, there were additional appropriations that reflected investments to support business, agriculture, and homeowners with respect to Fiona. That was a disaster. It was unexpected. Government had to react quickly. Those expenditures, which were in the area of $6 million at the time, were shown and indicated through an additional appropriation - the Department of Municipal Affairs and Housing and the Department of Agriculture.

 

Again, events that require government to act quickly are explained through the additional appropriation process that is done at forecast. Wildfires are another example of an additional appropriation that was required in 2025 - $30 million that were clearly articulated in the forecast process. Health care is another area of significant spending. There’s a commitment by government to improve health care and improve health care services, and there are significant appropriations associated with pressures on utilization and with contract negotiations that are explained through additional appropriations. More homes faster, infrastructure - there’s another example of when construction is required or when the need to respond to homelessness very quickly has resulted in the need for an additional appropriation to explain that extra spending.

 

There are numerous examples in the last four or five years where the additional appropriation is used to document and provide that transparency. We continue to report on that four times a year, as I said, and we come to this table and are happy to explain where those appropriations are and what they indicate.

 

In our budget documents, they clearly outline all the changes and variances in departments. The forecast updates clearly explain that. Those are presented to media and to the public. They are posted on the website. We have endeavoured to provide more information through fact sheets in the OICs.

 

This government believes that there is the required transparency and accountability associated with the additional appropriations process. That is one of the reasons why we have not accepted that particular recommendation from the AG.

 

PAUL WOZNEY: When we talk about level setting, this issue keeps coming up, because it is a point of concern for the Auditor General. The people of Nova Scotia deserve transparency and accountability for the way that the government spends the people’s money.

 

I take to heart that any government, regardless of political stripe - a budget is a working document and an estimate. Circumstances require governments beyond the budget at times, often for compelling and legitimate reasons. I don’t believe anybody aims to put handcuffs on a government’s ability to do that. But the Auditor General’s recommendations about increased transparency would bring us more in line with how other Provinces manage out-of-budget spending. Right next door in New Brunswick, our neighbours bring additional appropriations back to the Legislature in the form of a bill that has to go through the entire cycle of debate for a second and third reading. It allows for the kind of robust debate and discussion that are warranted when we are spending people’s money.

 

I would flag for the committee that nobody is pounding on tables in New Brunswick that their process frustrates that particular government’s ability to spend outside of the budget cycle in the public interest, especially in the case of natural disasters or climate emergencies - many of the ones that affect us here in Nova Scotia. We’ve seen parallel spends under a very different, more transparent process in New Brunswick without frustration.

 

[9:15 a.m.]

 

If the rationale for this is that we are reporting additional appropriations, I want to flag again that there is no scrutiny through debate. Additional appropriations are never debated in Nova Scotia; they’re simply done by government and then reported. There’s no opportunity for those additional appropriations and the decisions that led to those appropriations to be put under the microscope, and government has an opportunity to explain why they’re legitimate.

 

Executive Deputy Minister Dean, given all this, I’m wondering if you can explain the reasoning for keeping additional appropriations outside the Legislature when other Provinces bring it inside the Legislature and it doesn’t frustrate their ability to spend outside the budget cycle.

 

KELLIANN DEAN: I recognize that other jurisdictions do things differently. We do table the additional appropriations in the House with the Clerk. I think members are free to raise questions at any time in the Legislature about additional appropriations. I know that our process is not the same as that of other Provinces.

 

What I can say is that this government has made it clear that it is not going to make changes to the Finance Act with respect to additional appropriations. We have repeatedly said that. We have repeatedly explained how we ensure that the purpose for those appropriations are transparent and accountable. At this stage, the government has chosen not to make any changes with respect to this process.

 

PAUL WOZNEY: I would just reiterate that Nova Scotians are not looking to put shackles on a government and its ability to spend when the need arises. What they’re looking for is transparency in process. Who’s making the decision? What’s the business case for making a decision? Oftentimes, in the case of emergency, it’s an opportunity for folks in Opposition to speak loud and clear that, along with government, we support the people of Nova Scotia in times of emergency and there’s wide agreement on how to support folks.

 

Frankly, the current process leaves people in a constant loop of reacting. We learn about decisions after they’re made without any ability to ask questions about the process. People are not understanding why money gets spent. That breeds a lack of trust, which is a growing problem for this government as it relates to how they spend people’s money.

 

This government was the first in the province’s history to spend $1.7 billion outside of their budget. They’ve spent close to that amount every other year they’ve been in power. While additional appropriations are a budget feature used across the country, the scale of the use of additional appropriations in Nova Scotia is a stark outlier. Last year, additional appropriations represented 9.2 percent of the Province’s original budget. A decade ago, that number was 1.2 percent. That’s nearly an 800-percent increase in how much the government relies on this budget lever.

 

Barring an emergency that requires significant provincial response, what is the department doing to lessen our growing reliance on additional appropriations in this coming budget year?

KELLIANN DEAN: I would like to clarify that there is not a reliance on additional appropriations. They are a tool that is used to indicate changes in budgets that departments have - a change from an original estimate to something that was unforeseen or not avoidable.

 

I would say this has been a difficult budget that was tabled recently. I think we all recognize that. I can’t say that the number of additional appropriations would change, because again, it is dependent on what is happening through the year and how government is responding to that. It could very well be that one department receives money from somewhere else within government that would increase their appropriation.

 

I think it’s difficult to speculate on the level of additional appropriations that may or may not be required this year. Departments are working very hard to stay within their appropriated amounts, and as we know, there are difficult decisions that were made this year with respect to the budget. Departments are working very closely with their stakeholders and within their envelopes to stay within their estimates.

 

We’ll have more to say on that. Again, we’ll be in a better position at the September update to say how things are going and to look at how departments are managing with respect to the budget.

 

PAUL WOZNEY: The Province’s budget passed months ago, but Nova Scotians are still finding out about its impacts. The recent closure of public libraries in the Annapolis Valley is the latest example.

 

Government has known for years that a new funding model was needed to ensure these libraries could keep up with the growing cost of delivering services to Nova Scotians. Executive Deputy Minister Dean, can you tell us why a new, sustainable funding model for libraries was not included and delivered in the most recent budget?

 

THE CHAIR: I’m not sure what that has to do with alternative procurement. However, we’ll allow the question to stand. Executive Deputy Minister Dean.

 

KELLIANN DEAN: I can’t speak for the negotiations or the work that CCTH - Communities, Culture, Tourism and Heritage - has been doing with their stakeholders. What I can tell you is that the amount that was allocated for the libraries remained the same in this year’s budget. It wasn’t reduced. It’s $16 million of support, and that was protected in this year’s budget.

 

PAUL WOZNEY: This line of questioning flows directly from our mandate. We’re speaking about the budget, which definitely qualifies as any other financial manager respecting the public funds of the Province.

 

THE CHAIR: Order. That’s your opinion. I have mine. We’re talking about alternative procurement here, not about funding for libraries.

 

Please continue.

 

PAUL WOZNEY: We’re talking about the budget, which is the principal financial matter respecting the public funds of the Province. It’s difficult to separate that from the committee.

 

THE CHAIR: We’re not going to argue this...

 

PAUL WOZNEY: Apparently we are.

 

THE CHAIR: ... but the next question I will call out of order.

MLA Wozney.

 

PAUL WOZNEY: Has the Department of Communities, Culture, Tourism and Heritage submitted a request for additional funds outside the budget process to keep rural libraries open?

 

THE CHAIR: Executive Deputy Minister Dean.

 

KELLIANN DEAN: Unfortunately, I’m not aware of anything at this point.

 

PAUL WOZNEY: A serious issue with the use of additional appropriations is the fact that people don’t know how or when funding decisions are being made. In the recent budget, one of the key problems we heard about was that organizations didn’t see cuts to their programs coming or understand why they were being made. We heard from Kari and James Robertson, who told us that they were immediately anxious and concerned when they heard the Caregiver Benefit they received to help care for their adult son was being cut.

 

THE CHAIR: Order.

 

PAUL WOZNEY: We know that trust is shaken...

 

THE CHAIR: Order, please. Do you have a question that deals with alternative procurement?

 

PAUL WOZNEY: I remind the Chair that the mandate allows questions including any other financial matters respecting the public funds of the Province. I’m asking questions about the budget. It’s within the purview of this committee to discuss. I object to the exclusion of questions that are clearly within the purview of this committee.

THE CHAIR: I recognize your objection. MLA Wozney.

 

PAUL WOZNEY: We know that trust is shaken for a lot of people, even with that particular cut being reversed. I’m wondering if Executive Deputy Minister Dean can outline how the department plans to handle communication and community engagement during the budget process differently moving forward?

 

KELLIANN DEAN: As you would know, every year there is a budget consultation that is done. I believe that again this year we will be looking very closely at how to engage and consult as we move into the planning for next year’s budget.

 

PAUL WOZNEY: One of the things that really stood out about this recent budget was that there were cuts to programs and services for African Nova Scotian communities, seniors, and people with disabilities across a number of departments. In each case, the cuts compounded in a way that made it feel like the budget was punching down.

 

Given that the Department of Finance and Treasury Board was the one who put the finishing touches on the budget, I’m wondering, Executive Deputy Minister Dean, if you could explain how this happened. Did anyone from your department look at the sum of the cuts across departments to understand community impacts?

 

KELLIANN DEAN: As I said earlier, this was a difficult budget. There was significant analysis that was done across departments with input from departments. Ultimately, government decided where changes would be made, where cuts would be made, and how we would structure this year’s budget.

 

PAUL WOZNEY: I wonder if you could speak to the steps that are being taken by the Department of Finance and Treasury Board moving forward to ensure that the announcement of cuts and the chaos and confusion around cuts that would be restored and those that would remain intact - that we avoid that kind of misunderstanding and public chaos in the future.

 

THE CHAIR: Do you have a question that deals with the purpose of this meeting, MLA Wozney?

 

PAUL WOZNEY: My question stands, Chair.

 

THE CHAIR: MLA Wozney.

 

PAUL WOZNEY: The Auditor General recently reported that the Nova Scotia Health Authority has awarded over $3.7 billion in contracts through alternative procurements since 2020, with almost $3 billion in 2024-25 alone. This is clearly a large spike outside the norm. Did this raise any red flags or trigger any additional processes within the Department of Service Nova Scotia?

THE CHAIR: Deputy Minister Munro.

 

JOANNE MUNRO: My understanding is that the Nova Scotia Health Authority fully agreed to the recommendations from the OAG report on health contracts...

 

THE CHAIR: Order. The time for questioning by the NDP has expired. I move to the 20 minutes for the Liberal Party.

 

MLA Druhan.

 

HON. BECKY DRUHAN: I appreciated EDM Dean’s description and explanation of additional appropriations, rooting this in the budget being an estimate of spending for the coming year and additional appropriations being adjustments to that, which are made throughout the course of the year when spending deviates from the estimate. Typically, historically, and normally, these are used in cases of emergency or unexpected expenses.

 

In Nova Scotia, this government particularly uses additional appropriation in very different ways. Very regularly, we see additional appropriation being used in predictable spending: increases or expansions of programs, or wage adjustments that are coming as a result of known bargaining. We see additional appropriations being used in relation to policy decisions that are made mid-year and items that could have been included in the original budget but are not.

 

Nova Scotia is in fact an outlier in how this operates. We are an outlier in how much spending flows through additional appropriations. I believe the Auditor General, at last tally, put that at $6.7 billion, which is a significant amount. Nova Scotia is also an outlier in how often additional appropriations are used. This is rooted in the fact that Nova Scotia arguably has the weakest law in the country and amongst other democratic jurisdictions around additional appropriations. In Nova Scotia additional appropriations are not subject to the same scrutiny as the budget. They are not debated line by line the way the budget is, and they do not receive the full vote of the House in the same way that the budget does.

 

[9:30 a.m.]

 

For multiple years now, the Office of the Auditor General has recommended that the Minister of Finance and Treasury Board amend the Finance Act to align with legislative practices of other Canadian jurisdictions, and each year the minister says he has no intention to amend the Act because he feels the current parameters of the Finance Act ensure accountability and transparency over spending of public funds.

 

Nova Scotians don’t feel that way, though. Nova Scotians feel like the process is not accountable or transparent, and they do not feel like they have appropriate insight into how their public funds are spent. The reality is that Nova Scotians and their children and their grandchildren - future generations - carry the weight of the debt that government incurs. They are entitled to the information that they want. They are asking for scrutiny. They are answering for transparency. They would have those things if the changes that are recommended to the Finance Act were implemented.

 

Government has indicated repeatedly that they’re not willing to make the change to the Finance Act that has been proposed. I recognize that this is not the decision of any of the witnesses who are here right now. This is the decision of the Premier and ministers. I do want to be really clear that we very much recognize that that decision is a government decision and it’s not in the hand of the folks who are here today. Having said that, that’s the decision that we’ve been given.

 

My question is - and this could go to any of the witnesses today - what do you suggest Nova Scotians do to get the information that they’re looking for, to achieve as much transparency and accountability as they can in the context of the current structure, the process, and the legislative regime that are there?

 

THE CHAIR: Executive Deputy Minister Dean.

 

KELLIANN DEAN: Perhaps I’ll start and hand it over to my colleagues. In terms of Nova Scotians’ ability to get information, I would say that the information is available. It is online. It is reported through the media.

 

I know that that’s not necessarily the only way that Nova Scotians could get information. If they are interested, they can watch Public Accounts Committee. They can look at the debates that are happening in the Legislature and be informed about the political process that we have and the legislative process that we have.

 

In terms of general information, we’re transparent in terms of what we post online that is available for Nova Scotians. If they are so inclined, they can access that information. All of the budget documents are public. They are accessible online. All of the additional appropriations are posted. They are accessible online. For a Nova Scotian who is really interested and engaged, they could access that information through those sources. I will leave it there.

 

THE CHAIR: Any other comments?

 

MLA Druhan.

 

BECKY DRUHAN: I certainly am familiar with those sources online, but I would ask if we could have details of the online sources shared with the committee formally. That would be excellent. Thank you.

 

The department and minister - well, the minister has been clear, and government has been clear, that they do not agree to make the legislative changes recommended by the Auditor General that would increase transparency. In light of that, and in light of the requests of Nova Scotians for more transparency, what policy or practical changes, if any, has the department made to increase transparency in approving additional appropriations?

 

KELLIANN DEAN: The process for approving additional appropriations is part of the budget process and our ongoing accountability and transparency. Additional appropriations are approved by the Governor in Council and they generate an Order in Council, which is a public order. That is posted online. We have tried to include more information about that appropriation than perhaps what might have been there in the past. That is one way that we have tried to enhance transparency around what the purpose of the additional appropriation actually is.

 

That process is a long-standing process that continues. There haven’t been any changes in the actual process. It’s a legislative process, and an Order in Council is required to approve the appropriation. The change where we have tried to improve information and communication is in providing a little bit more detail in that OIC - the Order in Council - again, through the fact sheets that we do at public forecast updates, where we itemize all of the appropriations and try to provide in plain language what they were for so that it’s much easier for folks to understand what the need was for that appropriation.

 

Rob, I don’t know if I’ve left anything out of that.

 

THE CHAIR: Mr. Bourgeois.

 

ROB BOURGEOIS: I would just kind of step back from the additional appropriations process and think about the rigour that goes into the decision-making. Treasury and Policy Board, Executive Council - when submissions come through their processes, there’s rigour before it gets to that table in the departments - in Finance and Treasury Board, in the Executive Council Office. Those decisions mid-year are done with a lot of rigour and staff assessments behind that. Then those are approved - if they are approved - by TPB and EC. They become part of a department’s spending only after the fact. The additional appropriations piece is that extra layer of rigour of whether we’re going to allow additional spending authority to be added to a department through the forecasting process.

 

There are multiple processes happening at the same time throughout the year that get us to where we’re at. The additional appropriations in September and December don’t mean that those expenses have been spent already. It’s the forecast to the end of the year that departments - based on the decisions of the government - think they’re going to go over their initial spending authority. They’re asking for that bump up. Once that bump up is approved, that’s when a department can spend that money. Then the additional appropriation, as Executive Deputy Minister Dean described, is what we know and the transparency behind the publishing of the additional appropriations during our forecast - budget as well, but also public accounts.

BECKY DRUHAN: I really appreciate that comment from Mr. Bourgeois. I think it highlights an important aspect of what goes on behind the scenes in relation to advice being provided to government around decision making. As minister, I certainly was incredibly grateful to the intelligent, dedicated, skilled staff with very specialized knowledge within the Department of Finance and Treasury Board who provided those assessments and that analysis that is then submitted to government for consideration.

 

Just for clarity, though, for Nova Scotians - I want to be clear that I deeply appreciate that work and recognize all that goes into it, but the advice and recommendations that may be made by staff are not binding on government. Government fundamentally makes whatever decisions they choose to make, regardless of that thorough work that is done by departments. Can you confirm that that’s the case?

 

KELLIANN DEAN: That is our job. It’s to provide the best advice we can based on our own analysis and to advise government, and then government ultimately will make the decision. Nova Scotians elect governments to make those decisions for them.

 

BECKY DRUHAN: Thank you for that, Executive Deputy Minister Dean.

 

Going back to your earlier comments on the additional appropriation process that flows through Governor in Council and then is communicated through an OIC, I really appreciate the inclusion of additional information in that process for the public. I think that’s a really important point to note, especially in the context of the recommendations of the Auditor General not being followed and the call from the public for more information.

 

For Nova Scotians who may not know, can you give a little more detail about what an OIC is, where they can find it, and how they would access that information and understand it?

 

KELLIANN DEAN: Executive Council is made up of ministers of the Crown, and they make many decisions that sometimes require an Order in Council to be signed by the Lieutenant Governor. It is part of the parliamentary process that we follow here in Nova Scotia.

 

In terms of where the Order in Council is posted, I’ll have to get back to you specifically with my details on the online sources where all the other information is shared. Finance and Treasury Board has a website where we share ours. The Orders in Council, I believe, are shared through the Executive Council Office. Interested Nova Scotians can find those online.

 

BECKY DRUHAN: My go-to, now that I’m not in government, is the Royal Gazette, but if there are additional sources of that information and places that we can point Nova Scotians to to be able to access that for themselves, that would be excellent to know about.

This year, the Province has seen a credit rating downgrade, which was disappointing news to Nova Scotians, for sure. There has been significant public scrutiny as a result of that. We’ve heard loud and clear that government is not interested in changing the legislation or the law around this, but in the context of that credit rating downgrade and the $1.3-billion deficit, should this have been a trigger for a change in our practices? Can you speak more about, in that context, why we aren’t seeing practices change to address the concern around the credit rating downgrade?

 

KELLIANN DEAN: The Standard & Poor’s downgrade that happened recently - let me just step back. Credit rating agencies look at the Province’s financials. They look at management. They have their own financial parameters against which they evaluate our financial performance. Standard & Poor’s, after the budget was tabled, met with us to discuss it, and they made a decision to downgrade the Province.

 

What I will say about that is - and I think we mentioned this the last time - that downgrade has not significantly impacted the cost of our borrowing at this stage. Nova Scotia’s bond issues are met enthusiastically by investors. In fact, in some instances, they are oversubscribed. We are still seeing a strong demand for Nova Scotia bonds. To this point, we haven’t seen a significant impact on that demand as a result of the downgrade.

 

What I will also say is that Moody’s also recently reviewed the Province, as they do, and we met with them. They issued a report recently - in fact, May 20^th, I believe. They are maintaining the credit profile of the Province as stable. Their assessment is based on what they say reflects strong management practices and policies, considerable policy flexibility over budgetary outcomes, and relatively significant levels of funding coming from reliable federal transfers, which help stabilize what might be unpredictable own-source revenue.

 

Agencies look at everything. They look at the risk that we’re assessing, they look at our revenues, and they look at where our expenses are going. Moody’s in particular believes that strong management policies are supporting sound fiscal planning and debt management, that a fiscal policy - our flexibility to adjust revenue or expenses will help us address our fiscal challenges, and that we have an ability, through federal transfers, to help offset our own-source revenues.

 

[9:45 a.m.]

 

All of that to say, this supports the processes and the policies that we currently have in place as we’re building a fiscal plan, as we’re developing the budget, as we are analyzing our revenues, making adjustments, and determining our path forward. It also speaks to the fact that we have a fiscal plan, we’ve demonstrated that we’re going to need to reduce our expenses in order to ensure that our revenues keep up. When we meet with the credit rating agencies, we discuss in detail what our policies are, how we’re managing, and part of that also impacts their view of the Province and their view of how the Province’s finances are being managed.

 

The different rating agencies look at different things. To this point, Moody’s is maintaining our rating.

 

BECKY DRUHAN: Government has made it quite clear that they’re not going to change their legislation associated with additional appropriations. It appears that while there have been some tweaks to practices, generally the approach is not shifting, despite the deficit and the credit rating downgrade. It seems like we’re continuing optimistically with business as usual. My question then is: Is there an expectation that in this fiscal year, government will again approve another additional billion dollars in overbudget spending? Are we going to see that practice continue?

 

KELLIANN DEAN: I would just like to clarify that the way we handle additional appropriations is not related to credit ratings or the credit downgrade. Having said that, I can’t sit before you today - I don’t have a crystal ball. I cannot say what is going to happen in the next several months than can impact. We’re managing risks carefully. If we have a significant emergency situation, or we see a tariff impact that is completely unrealistic, something that we haven’t seen that has a significant impact on the province, that could affect our financial planning. I can’t predict that at this stage.

 

THE CHAIR: MLA Druhan with 10 seconds.

 

BECKY DRUHAN: I appreciate Executive Deputy Minister Dean’s comments, and we’ll follow up in the next round.

 

THE CHAIR: MLA McGowan.

 

BRAD MCGOWAN: Thank you for being here and for providing some clarity with regard to the additional appropriation and alternative procurement process. We’re grateful for that. Many of us are either filling in for other MLAs on the Public Accounts Committee or we’re new, but I’ve heard a lot of conversation around transparency and accountability today. I’m just wondering - and I’ll direct this, first of all, to Executive Deputy Minister Dean - how many times have you and your department been here in this committee having this conversation?

THE CHAIR: Executive Deputy Minister Dean.

 

KELLIANN DEAN: Well, that’s a good question. I’ll estimate it. I think it may be eight or nine times. You know, I will say this: We are happy to be here, to come and answer questions about accountability and transparency, because that is what we do. That is what is important to all of us in government. We know that we have to safeguard taxpayers’ dollars and that we are doing the best we can to ensure that there’s value for money for Nova Scotians. If I come 10 more times, that’s fine. We will answer the questions. We take this committee very seriously and the role of this committee very seriously. If we are providing the information that Nova Scotians need and expect, then that is part of our job.

 

BRAD MCGOWAN: Thank you for your transparency and accountability. On the same topic or a similar topic, can you talk a little bit about and maybe outline how the Finance and Treasury Board explains additional appropriations to media, to the public, and to the members of this committee? Is it a fulsome discussion?

 

KELLIANN DEAN: Well, I would hope that you would feel that the information that we’re providing you is fulsome. We certainly come in the spirit of full transparency and provide you with as much as we can. In terms of briefing the public, when we talk about the forecast update and we talk about changes from the budget which is an estimate, as I always say, we do a technical briefing first with the media because we recognize that some of the terms and some of the changes they need to ask their own questions about. We take the time to go through that in detail so that they are able to report on it and ask further questions of the minister when the minister comes. The minister is ultimately accountable.

 

That process happens four times a year when we do a forecast update and when we also table the budget. That happens. The first one will be September. Under legislation, we must do a forecast update before the end of September, before the end of December. We also table a forecast update when we table the budget because changes can still have happened, and then we’ll do it again with Public Accounts. Four times a year, we are reporting on what change has happened since the budget was established. Given that it is - it can be fluid. It is based on an estimate that is information that we know at one point in time, and that is how we build our budget. There will be changes through the year, and that is what we expect. We do news releases, we do a forecast update document that we actually produce a hard copy and online, and we do fact sheets, again, that itemize any additional appropriation which would reflect a change in an estimate from the last time that we appeared or the last time that we had a forecast update.

 

There is a significant amount of effort that goes into trying to ensure that we publicly communicate and make that information available and also, through this committee, answer questions in detail about the additional appropriations. There is nothing precluding anybody from also reaching out to a department to inquire about anything that may need further explanation.

 

THE CHAIR: MLA Boudreau.

 

HON. TREVOR BOUDREAU: I was on PAC when I first got elected and I’m back, so I wasn’t a part of the discussions about how this topic or these two different topics, really, because it seems like it’s two different things. It’s alternative procurement and then additional appropriations. I’m not sure how this came to be, but certainly happy to ask a couple of questions.

These are complicated things, and we’re trying to make sure that the public understands what they really are all about. The first kind of part of my question is going to be a little bit simplistic in a way to try and make sure that people understand what these are, and then we’ll get maybe a bit more into the details. Maybe for the committee, can you clarify what exactly prompts an additional appropriation, and why might a department record one? You’ve kind of highlighted a couple different things, so I think it’s important for the committee but also the public to know. What are those? Pretty straightforward, pretty simplistic question.

 

THE CHAIR: Mr. Bourgeois.

 

ROBERT BOURGEOIS: Really, the appropriations are set at budget time. When the budget is set in the spring which is basically the plan for the fiscal year, that’s really the reference point for all of the departments’ and the government’s spending. Each department is given an appropriation which is its spending authority for that fiscal year. It gets added - it gets debated, 80 hours of debate, during budget time when the budget is tabled, and then it forms - it becomes the appropriations Act for that fiscal year.

 

Throughout the year as the operations of the government unfold, the decisions that it’s made, the funding that it’s committed to unfold, and there are examples like utilization pressures in the sense that patient visits go up, so health operations have to be increased. The decision of the government is to say that we’re going to continue those patient services and tend to the patients, so we have to make an adjustment to our appropriation for that fiscal year.

 

The appropriation is looked at at the department level across all programs within that department. Just because patient visits go up in one area of health doesn’t mean that’s an additional appropriation, because maybe there’s an underspending in another area that covers that. Really, at the end of the day when we report that forecast in September, in December, with the next budget, and at Public Accounts Committee, we look at it for the full fiscal year - the spending that we expect to incur based on the decisions of the government. If there are increases to that original appropriation that was set at budget, that’s when an additional appropriation is submitted to Treasury and Policy Board and Executive Council for approval for the OIC that we talked about earlier. That’s how we see the additional appropriations arise during the year.

 

Other examples we’ve talked about today - emergencies, major storms, wildfires. Another example would be new federal programs where we leveraged the federal funding, and because of leveraging the federal funding, we have to incur our own dollars that weren’t in the budget. As a result, that may - not always, but it may - increase a departmental appropriation, and thus result in an additional appropriation.

 

Other examples are accounting adjustments at year end. We have the liabilities for contaminated sites. Those estimates are reviewed every year at year end and they may not be able to be estimated at the final forecast. We see those accounting adjustments come through in the Public Accounts, which are our final additional appropriations to finish off the fiscal year, and that rounds out our financial reporting cycle for the year.

 

TREVOR BOUDREAU: This leads me to the next question. I’ve had the privilege of being a minister, as well as being on Treasury and Policy Board. The budget process, as you described it, is quite intense, and it starts quite early. It’s not something that just happens in February-March-April. I mean, Executive Deputy Minister Dean and I have had conversations about how we make sure we get the time that we need to really get there and see what we need to do.

 

I think it’s about understanding how, in this process, do we get the best information possible to create a budget? It’s really about - you’re taking things and forecasting and trying to plan accordingly, and then, like you said, if the federal government comes out with a program three months into it and we have to pony up to be able to get into that program, well, that’s a potential additional appropriation.

 

How do we get that best information? How do we plan accordingly? Can you talk to that a little bit?

 

THE CHAIR: Executive Deputy Minister Dean.

 

KELLIANN DEAN: Well, the budget is an estimate. It’s a term that’s hard to identify with when you think about a budget and you think about - you know what your income is, you know what you have to work with, you know what your revenues are, and you can change your expenses to accommodate that to make sure that you have enough money. But with government, it’s not the same as the private sector. An estimate is made that’s forward-looking based on information that’s lagging. That’s part of the challenge when you build a budget.

 

We get our information from Statistics Canada. We do a revenue projection with a very sophisticated model that has a number of inputs that take in growth rates in various industries and GDP changes and projections. It takes into account our tax revenue and changes in tax revenue built. We get updated data on a regular basis from the federal government that we use when we build a budget.

 

When we build it, it’s at a point of time. There’s still more data, and the data we might be using is lagging, but we have to make a projection based on it. That work is a significant amount of work that happens, and we try to use the most recent information we can in order to do that projection for the future. It starts with revenue: How is the economy growing? What are we seeing in growth? Is it going to continue to grow? Is it going to slow? What is our population growth? Is it soaring? Is it starting to slow? As we saw in this past budget, our population growth is slowing. Our expected GDP is slowing. That means that we have to look at what that’s going to do to our revenue projections for a fiscal year.

 

[10:00 a.m.]

 

I will say, too, that the other piece of information that we pull in at budget time is through a consultation with economists across the country so that we can validate our own assumptions about the economy and where it’s going. It’s a critical input into our projection tool. We validate those assumptions and we take input from them, and we have a robust discussion on what they are seeing in their projections for Canada, for Nova Scotia. We sometimes get input from them, and sometimes they agree completely with the assumptions that we are making. We use that as a sounding board to validate our modeling.

 

From there, we have to work with departments. We know there’s a variety of things that are expenses that we won’t be able to change because there are pressures in program areas that Nova Scotians rely on in health care, for example, and seniors in long-term care. Utilization is a program that - its costs are going up because more people need it and it isn’t necessarily something that we can actually reduce. There are known expenses like that. Some of those expenses are contractual obligations, so those aren’t going to change, so a significant amount of the expense line is actually utilization-related.

 

Then there’s an opportunity to look at strategic priorities or initiatives that government really wants to invest in in a given year - and that needs to be built in. The programs and services that departments deliver have to be budgeted for as well. That all gets rolled up into an expense line. That is awfully simplistic. Rob is probably shuddering at my description of how I’m building the budget.

 

The other piece is that we have financial guardrails, so we have to look at the debt we’re carrying and what we’re going to need to borrow, and the capital plan and how that gets built into the budget, and how the operational expenses associated with a capital plan feed into the expense line. Then we have to make sure that our bottom line - the projected surplus or deficit - keeps us within our fiscal guardrails and we’re targeting 40 percent net debt to GDP ratio.

 

All of these factors have to come together. While at a point in time, we can say where we are and where we’d like to be, as we’ve discussed today, throughout the year there are changes that happen. I think that’s the critical importance of additional appropriation. It’s to document that change and be very transparent about what it is from where you were at budget. I don’t know if that’s Budget 101. (Laughter)

 

THE CHAIR: MLA Fadare.

 

ADEGOKE FADARE: Thank you for being here. There are a couple of things that I think are very obvious that we’re learning today. Obviously, one of the lessons is additional appropriation and forecasts are reporting tools. The Province reports publicly four times a year. There are technical briefings, public budget documents, Orders in Council, and committee appearances like we have today. Also, the credit rating discussion is separate from the mechanics of additional appropriations and procurement. It was not that that was affecting that. Anyway, I just wanted to do a quick recap, because there’s a lot that’s happened and said so far.

 

My question is simple today. I know that we’ve heard a lot this morning around reporting and accountability for the government, but also, I think it’s important for us to understand the framework that actually governs our government, which buys goods and services in the first place.

 

My question is going to go to Service Nova Scotia. We’ve been looking at terms like trade agreements and alternative procurement. They come up often. We’ve heard some of that already this morning. How can we bring this explanation to the average Nova Scotian who might be watching today or probably during the course of the day? Could you help the committee to understand what these trade agreements are, why they exist in the first place, and why it’s important to Nova Scotia to follow them? I think the framework will begin to help guide our conversation to allow the average Nova Scotian - like we had Budget 101 - to understand this better.

 

THE CHAIR: Deputy Minister Munro.

 

JOANNE MUNRO: I’d say that the Nova Scotia procurement system is designed to operate within trade rules and to use defined exemptions in a structured way within the trade agreements. With that, I’ll ask Angela to take the committee through the broader trade agreement framework and why those exemptions are built in for governments to use. I think that’s the 101 that we don’t necessarily get to as often as we’d like to.

 

THE CHAIR: Ms. Paulin.

 

ANGELA PAULIN: I would start by saying that the key point in relation to the trade agreements is that our procurement policy is anchored in a rules-based framework that attempts to balance open competition with permissible exceptions that governments need to act on in the public interest. The trade agreements were created to open markets and reduce unfair trade barriers, but they were never designed as a rigid system with no room for governments to regulate and deliver essential public services.

 

Executive Deputy Minister Dean alluded to the fact that governments are not just buyers. The agreements recognize that governments have a public service mandate, and they need to deliver care. They need to protect citizens and ensure that they’re living in safe environments. They need the flexibility to respond to urgent situations and address other socio-economic priorities in the public interest.

 

For Nova Scotia, that framework comes from a range of domestic and international trade agreements. Domestically, we work very closely with the procurement team in the application of the Canadian Free Trade Agreement. Internationally, procurement obligations can be found in the WTO Agreement on Government Procurement, the CETA agreement with the European Union, the Canada-U.K. Trade Continuity Agreement, as well as the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, otherwise known as the CPTPP. Those agreements all shape where the procurement rules apply and where exceptions may apply.

 

With the exceptions, I think it’s important to note that the flexibility is not arbitrary. The agreement is set out in advance: which public sector bodies are covered, which goods and services are covered, what financial thresholds trigger the obligations, and what exceptions limited-tendering grounds are allowed. In Nova Scotia, those obligations are incorporated directly into our Public Procurement Act, and the ALTP system is how those flexibilities are operationalized in practice.

 

I guess I would sum up by saying the flexibilities are designed not as a workaround but basically a recognition that government has a public service mandate. That’s recognized across all of the trade agreements.

 

ADEGOKE FADARE: Thank you, Chair. Thank you for that because I think...

 

THE CHAIR: Order. My apologies. The time for the government has expired. We’ll move again to the NDP caucus. Each caucus is going to have 14 minutes. MLA Wozney.

 

PAUL WOZNEY: I’d like to go back to a question that was truncated by the clock previously. Looping back to Deputy Minister Munro, I’ll just restate the question and perhaps give you a chance to complete the answer that you were mid-stream on.

 

The Auditor General recently reported that the Nova Scotia Health Authority has awarded over $3.7 billion in contracts through alternative procurement since 2020 with almost $3 billion in the 2024-25 budget year alone. This is clearly a large spike outside the norm. Did this raise any red flags or trigger any additional processes within the Department of Service Nova Scotia?

 

JOANNE MUNRO: I’ll go back to the fact that the procurement services - we, as the Service Nova Scotia procurement team - provide advice and counsel to our colleagues across the system, and we are one measure of advice and counsel. ALTPs, we’ve talked about, are rooted in, and procurement is rooted in the Canadian Free Trade Agreement. All procurements have rigour and process and protocol and sign-off required.

 

Obviously, the contracts that the Nova Scotia Health Authority engages in and signs off on, they need to be involved in the conversations if we talk about specific contracts with the Nova Scotia Health Authority. I would say that with the fact that my colleague, a CPO, Chris Mitchell, does provide support and counsel. The health sector is part of the exemption process. I think it’s really important to understand how they are a bit unique when it comes to the CFTA and exemptions related to their procurement spend.

 

I think I’d like to have Angela speak to that particular exemption criterion for Health and why that is part of public safety, public service, continuity of service, and then maybe Chris to talk in more general around that level of spend. I would say that when it comes to specific contract discussions that we would have to have our Health colleagues here.

 

THE CHAIR: Ms. Paulin.

 

ANGELA PAULIN: I would start by saying that in general, with many caveats, but in general, services supplied in the exercise of government authority are typically excluded from trade agreements because they’re not considered to be liberalized, commercial services. With respect to the health and social services exemption, none of the agreements that I referenced earlier cover the procurement of health services. It’s not a new exemption; Nova Scotia’s not an outlier in the application of that exemption. It’s long been part of the trade agreement framework and a fundamental position that Canada takes in all negotiations to ensure that the flexibility is there to deliver the publicly funded health care system in this country.

 

Under the Canadian Free Trade Agreement in particular, the exemption finds itself in a section called the non-application section, where it’s clear that all of those particular services are not subject to the obligations in that procurement chapter. In plain language, that means where procurement generally falls within the procurement chapter in the agreement, it’s carved out of the normal procurement rules rather than being treated like an ordinary covered procurement.

 

Again, the reason for that is that health and social services are not ordinary market transactions; they involve considerations such as continuity of care, urgent need, equity access, and overall stability of the system. Again, at the same time, not everything connected to Health is outside of the procurement rules, but that’s just a general overview of how importantly Canada treats this particular issue when negotiating trade agreements.

 

PAUL WOZNEY: Chair, if I understood the deputy minister’s remarks, I think the executive director from Strategic Sourcing was also going to offer some comment.

 

THE CHAIR: Very well. Mr. Mitchell.

 

CHRIS MITCHELL: I would only add, because I think we’ve got pretty much a good answer from Angela, specific to your question about the OAG’s comments and what we’ve made changes to, I would say that our team - myself, but many of my directors - works quite frequently with the OAG. We’re in almost constant communication around the alternative procurement. During the last two years, with their input, we’ve made significant review and amendments to all of our documentation, not the least, the Public Procurement Act was reviewed and re-released in 2024, public procurement policy released again in 2024 after review. We’ve recently gone through as a government the S/4HANA launch in June plus or minus 2025. The alternative procurement protocols were updated and re-released October 2025, and the procurement manual’s been reviewed and updated in February 2026.

 

[10:15 a.m.]

 

We take the inputs from the Auditor General related to procurement generally, but in this instance - related to the alternative procurement process or pathway - very seriously, and we’ve amended all of those documents to reflect additional controls being put in place, et cetera. I think there’s been some really positive outcome from that with respect to controls and review around the alternative procurement process.

 

PAUL WOZNEY: The most recent report out of the Auditor General’s Office states: “We are concerned with the potential use of the health and social services exemption to award future alternative procurements that could be valued in millions or even billions of dollars without public disclosure.” I’m wondering if one of the witnesses can outline how many times the health and social services exemption has been used to date, and what the total value of goods and services procured under this exemption is.

 

THE CHAIR: Deputy Minister Munro.

 

JOANNE MUNRO: I don’t have that information here now, but we can commit to getting it to you.

 

PAUL WOZNEY: Nova Scotian company Dexter Construction recently had to go through the public tender process for a $160,000 contract to pave a quarter of a kilometre of a road. Conversely, big companies like Google are awarded millions of dollars of contracts through a process that’s substantially less transparent. Why the disparity in the amount of transparency for wildly differing values of contracts?

 

THE CHAIR: Deputy Minister Munro.

 

JOANNE MUNRO: Government obviously does a lot of contracting, a lot of procurement work, and each one is unique and different. When there is procurement requirement, there is then the dialogue that happens between our teams and the department at hand. The procurement pathway is then determined through those discussions and lots of information that goes back and forth. The procurement pathway then is decided upon and things proceed.

 

Not all things are the same, and there are exemptions within the CFTA that are rooted and are decided upon at the time that those conversations happen. Obviously, every department makes their own decisions when it comes to their procurement after advice and counsel has been given, and there’s a lot of balancing of many things that are coming at a deputy head. At the end of the day, the procurement path forward is decided upon through those discussions.

 

With that, every file is unique, every discussion is unique, and every pathway has to have its rigour and protocol, and agreement and approvals before it hits the street or it goes through an alternative procurement path.

 

I’d like to see if my colleague, Chris, would augment that.

 

CHRIS MITCHELL: Actually, the examples you had are perfect because the Dexter Construction situation is above $139,000 for services or construction, which requires now that it goes to open competition. I’m delighted to get $160,000 awarded contract. They went through an open competition. That’s exactly what should have occurred.

 

The second example, without the details of it, it’s probably something that was either awarded off of a standing offer already in existence or was the subject of an alternative procurement. If it was an alternative procurement, as we’ve already touched on a couple of times, there’s an extremely rigorous review process it would have gone through to determine if it was, in fact, covered by one of the specified circumstances. The two really do point out, after the CFTA lower-level thresholds, open competition is the way that the government awards those contracts, except for alternative procurements, and then the circumstances are reviewed.

 

THE CHAIR: MLA Wozney with three minutes.

 

PAUL WOZNEY: I think what’s emerging for me here this morning is that we have all of these policies and procedures that are not visible to Nova Scotians and it’s hard for them to wrap their heads around how this government is spending money and why. This is not a small question; $6.7 billion out of the budget cycle is exceptional. It’s historic. No government before this government has spent this way and spent as much this way. No government has relied on alternative procurement to the degree that this government has. This is a trend that’s unusual in our own province. Nova Scotians are not clear on how this government is spending their money and why.

 

We saw significant engagement from the public when we were in the Legislature recently. I know some witnesses have made comments that we can ask questions about it when we’re in the Legislature, and I take to heart that the witnesses don’t decide how often we are present in the Legislature and for how long we sit. Nonetheless, it bears stating that on average, provincial legislatures in Canada sat for 53 days. Here in Nova Scotia, our Legislature sat for just 30 days. The ability of MLAs from all parties to be able to interrogate, ask questions, seek clarity on the budget, structurally is demonstrably less than it is in other jurisdictions.

 

We’re not talking about a paltry sum of an extra $275,000 on a particular deal; we’re talking about unprecedented deficit spending and billions of dollars outside the budget cycle in terms of a fiscal update. Sitting even a few more days to consider additional appropriations would mean better understanding for everybody, for all political parties, but mainly clarity for Nova Scotians about how the money is being spent.

 

Despite measures to increase transparency by bringing this kind of spending to legislatures routinely elsewhere than Nova Scotia that don’t deprive other provincial governments of the ability to spend in a timely and responsive way, I’m wondering, Executive Deputy Minister Dean, if you can explain what the reasoning is for keeping additional appropriations outside of the Legislature so routinely despite the Auditor General’s calls that this a step that’s needed to be taken here in the province.

 

THE CHAIR: Mr. Bourgeois with two seconds.

 

Order. MLA Druhan.

 

BECKY DRUHAN: This budget session we saw millions of dollars in cuts to existing programming, to people’s jobs and to departments. At the same time, government is operating in a deficit but still relying heavily on additional appropriations to fund operations. It’s a very concerning circumstance. I want to reiterate that these are decisions of the Premier and the ministers, not any of the civil servants who are sitting here at the table today. The reality is that these contradictory financial practices suggest that government is unable to budget appropriately. There are significant risks with these practices.

 

I was going to ask the Auditor General, but as she’s not here today, I’d like to ask any of the other witnesses who are present to describe what those risks are and explain them for Nova Scotians, particularly focused on the alternative procurement practices in the context of the other financial decisions.

 

THE CHAIR: Executive Deputy Minister Dean.

 

KELLIANN DEAN: I don’t think I’m entirely clear on the question.

 

BECKY DRUHAN: Maybe I’ll narrow it down. Our focus is right now on additional appropriations. I think they carry risks even outside of the other financial practices that government is currently engaging in. Maybe we could focus on that. There are risks associated with the approval process for additional appropriations; we’ve heard the Auditor General speak about that. I wonder if you could explain the risks associated with those.

 

KELLIANN DEAN: I don’t think that there are risks associated with the additional appropriation process. It is a process. It’s a process that’s been in place for many years. It’s in full accordance with the Finance Act which all governments for the past 10, 15 years have complied with. I don’t think that this is a question of process or a question of risk. We are using additional appropriations to communicate changes since the budget was tabled and in a particular forecast period.

 

I would say that over the years, when government has had fiscal capacity, it has spent it in areas of priority for Nova Scotians, areas of priority like health care, like for seniors and long-term care homes, to help with disaster relief, to support wage increases in sectors where they were required. Government made the decision to spend when resources were available to spend, and an additional appropriation was the mechanism to illustrate how that was spent from one budget period to the next. I believe that we are following the Finance Act, we are using additional appropriations as they have been intended to be used, and we are implementing government’s decisions in a fully compliant way.

 

BECKY DRUHAN: We’ve had discussions here and at other times in other contexts about the kinds of things that additional appropriations are typically used for, and examples where they would be understandable, I think, to the public. For example, emergency situations, natural disasters that may be unpredictable. We heard the example today of surprise federal funding that we need to add provincial funding to take the benefit of, and also departmental transfers. I think those were the three key areas that we heard about that would be typically justifiably used.

 

Are you able to quantify how much of the additional appropriations, either in the last year or out of the $6.7 billion accumulated from this government, fall into those categories?

 

KELLIANN DEAN: I wouldn’t be able to - I can’t do that exactly here. I don’t have that specific information with me, but we can certainly get that for you. One of the areas that I think we should spend a bit of time discussing around additional appropriations is the accounting adjustments. Those are sort of the things that are not necessarily seen. They don’t deliver programming, per se, but they are an important change that happens during a fiscal year that we use an additional appropriation to explain.

 

Rob, I’m going to turn it over to you to speak about the accounting side of additional appropriations.

 

THE CHAIR: Mr. Bourgeois.

 

ROB BOURGEOIS: Another example of additional appropriations comes from those year-end financial accounting changes that we see that have to be recognized in the public accounts. Those are needed to be recognized in the public accounts in order to obtain a clean audit opinion. Those are discussions that we have with the Auditor General throughout the year, but also throughout the year-end process as we finalize public accounts.

 

The biggest that we’ve seen in recent years is the long-term care accounting change. That’s one that in the past we would have recognized mortgages that we have issued to long-term care service providers as loans receivable. In the auditor’s work, we had numerous discussions on that topic, and, in the end, we thought that those are more seen as tangible capital assets. That change in the accounting - and I don’t want to get too technical - had a big impact on our net debt because we had to show those mortgages as tangible capital assets on our public accounts. That is a big change that would have impacted additional appropriations to our capital purchases for that fiscal year. Then we saw it in the September forecast for this fiscal year because that had not been contemplated in the last budget that was passed. That’s an example.

 

[10:30 a.m.]

 

The tobacco settlement was an example last year where we recorded revenue of $200 million-some from that settlement, but also had $16 million or $17 million in legal costs that went along with that settlement. Those legal costs were never accounted for, were never budgeted for or forecasted for because we didn’t know until the year end. We had to make that adjustment at year end in public accounts.

 

Those are examples, and they can be large at times. Another one was the removal of the tolls of the Halifax Harbour Bridges. Because they had their funding or their debt through us, we basically had to, I’ll say, write off that debt because they had no more revenue source to pay back that debt to us. That was a financial technical change that we made that impacted the Finance and Treasury Board’s additional appropriation to the tune of $157 million. But on consolidation that was eliminated, so there was no impact to the bottom line of government. It was an impact to the department’s additional appropriation.

 

Those are just other examples that come up as additional appropriations, usually at the end of the fiscal year when we are finalizing public accounts.

 

BECKY DRUHAN: I appreciate those explanations. I will say that there are circumstances, I think, where it is understandable that additional appropriations are necessary. I think we could get in a bit of a debate over whether the ones that were just described are necessarily being used as additional appropriations or if they could be addressed in other ways. Legal costs, for example, associated with settlements. Insurance companies project and anticipate what those settlements might be and factor them into their fiscal planning, and accounting adjustments associated with, for example, the bridge commission change. I think there’s a question as to whether those would need to be done in the additional appropriation context or as part of the larger budget.

 

Setting those really technical questions aside though, I am still left with - and I think Nova Scotians are still left with - significant concern around some of the types of things that are being used as additional appropriations. I’m just going to look at one document as an example to go through this, and it’s the Summary of Additional Appropriations from February 2025. I’m going to go through them.

 

The first is the Department of Advanced Education, and there were over $13 million in additional appropriations. They were for: housing project support for Tartan Downs and the Gaelic College Mabou campus, additional funding to PREP Academy and the Aboriginal Academic Access Post-Secondary Program at the Mi’kmaw Native Friendship Centre. Important projects and programs I think we can all agree, but also predictable projects and programs that should have and could have been included in the budget.

 

The Department of Emergency Management. Here’s one I think that Nova Scotians may better understand: disaster assistance relief. That was $6 million.

 

The next, the Department of Growth and Development - primarily due to increased utilization of home repair and accessibility program, Nova Scotia Provincial Housing Agency operating costs and transfer of property. Again, really important programs, but also programs that Nova Scotians know about that have been in existence for some time and should and could have been included as part of the budget in anticipation of these needs. None of these needs are surprise needs.

 

The next, Office of Addictions and Mental Health - primarily due to increase in mental health services. I won’t go into the details there, but I will again say this is a policy decision that government could have made at the time of budgeting - did not need to wait to make in the midst of the year. We know that there’s a need for increased mental health supports and services, and this should be part of the plan. It should not be coming as a surprise in the middle of a budget year.

 

Similarly, the Department of Public Works: snow and ice removal, highway and ferry maintenance costs. Finance and Treasury Board: debt servicing costs due to Canadian debt and pension obligations. Finally, capital purchase requirements. All of these things are - we can understand that they’re important, but they should be predictable.

 

Finally, the one I want to point to is the Department of Communities, Culture, Tourism and Heritage. That was over $17 million - almost $18 million - primarily due to increase in various community grants. Again, incredibly important programs, but there is absolutely no reason why these could not have been anticipated at the time the budget was made and debated in accordance with the budget. Instead, they came through the course of the year as additional appropriations.

These total hundreds of millions of dollars in additional appropriations. Nowhere in this summary do we see surprise federal funding, departmental transfers, accounting adjustments, or legal costs. That’s what’s not appearing in this summary.

 

I guess I would say that it appears to Nova Scotians that this is lack of planning on the part of the government. I would just say, in relation to that last item - the $18 million that was an increase in community grants - that government turned around in the following year and cut over $14 million of those.

 

The question is: Are the departments struggling to forecast? Why are we seeing these expenses emerging in the course of the year when it’s clear that government could have been able to predict them in advance and build them into the budgeting process?

 

THE CHAIR: Executive Deputy Minister Dean with 40 seconds.

 

KELLIANN DEAN: I guess I would point out that a significant portion of those appropriations is related to the QEII Halifax Infirmary Expansion Project. A year prior, when the capital plan was being discussed - some of these costs cannot be foreseen. They happen throughout the year and then have to be trued up at the end of the year through the additional appropriation. That’s $192 million in terms of additional appropriation.

 

The February...

 

THE CHAIR: Order. I now would like to go to MLA Burns.

 

RICK BURNS: Thank you all for being here this morning. As we discuss additional appropriations, some of the examples that get brought up - there’s one example in particular that resonates with me particularly, which is when wildfires are given as an example.

 

As you may know, my constituency is Hammonds Plains-Lucasville, where the 2023 Upper Tantallon wildfire started. We recently just passed the three-year anniversary of those fires, where I myself and 16,000 of my neighbours were evacuated; 151 of them lost their homes, and some of them lost their pets. That was an emergency that took place on a Sunday afternoon. It’s impacted and traumatized the community in ways that still surface today. So when I hear wildfires brought up as an example for additional appropriations, my mind just goes into thoughts of all the things that I know about that situation.

 

That afternoon - that day - I was evacuated on my way home and had to leave with what we had in our truck. We had to find somewhere to stay. Fortunately, I have my sister in town. I had a spot to stay, but the circumstances were much different for numerous people in the constituency.

 

When I think about the idea that government was able to help with responding quickly and rapidly and having to use political mechanisms like an additional appropriation - that’s not the sort of thing I think residents are thinking about when they’re in a parking lot outside the constituency trying to see where they’re going to go or where they’re going to stay that night.

 

The thought of going back and sitting in the Legislature to call the House back to discuss and debate how we’re going to react and respond to Nova Scotians to allocate funds to do the things that the government did - and there was a lot. There was so much going on after that evacuation that it was actually hard to keep track of the activities - the places that were stood up, the coordination, the effort that went into it.

 

I guess my question is - I want to give you the opportunity to speak on that, to speak specifically to the topic of additional appropriations as they’re related to wildfires - how they’re used, how the department is enabling that responsiveness.

 

THE CHAIR: Executive Deputy Minister Dean.

 

KELLIANN DEAN: I was one of those evacuees as well, so I identify completely with the uncertainty, the worry, the fear in community. The ability for government to react quickly and respond quickly in those types of emergencies and those situations is critical. It’s critical for Nova Scotians. It’s critical to be able to put their minds at ease and to be able to provide the support that’s needed in the face of such a broad-scale emergency, and then to be able to support the residents who’ve lost their homes and be able to help them navigate a truly horrific situation.

 

The point that you made about coming back into the Legislature to debate whether or not money should be spent to do that is a valid one. This government has the flexibility to do what’s needed in times of emergencies and did not hesitate to do what had to be done. The accounting for that after the fact comes through the additional appropriation rather than having to go into the Legislature to get it, knowing that there would be money that would need to be spent that would be over and above a budgeted amount in a department. In some jurisdictions, the additional appropriations are actually debated after the fact. So the money is already spent, and then the debate happens on the appropriations after.

 

All of that to say that I think the Finance Act is set the way it’s set for a reason, and we are implementing it in full transparency and complying with it. The additional appropriation is the mechanism by which we report and provide accountability to Nova Scotians about how money was spent.

 

There are numerous examples, I think, over the years where this government has made a deliberate decision to make an investment in an area that they believed was underfunded when they had the resources to do so. That extra money that was spent in those areas - housing, affordability, health care, response to wildfires and other disasters - Hurricane Fiona, and drought - that is actually clearly accounted for through the additional appropriation process.

 

I would say as well that government has been in surplus positions for the last four years. This is the first year that there has been a deficit. That is also linked to changing economy and slowing revenue growth. So this government made deliberate decisions to look at spending and to try to reduce that so that can come in line better with our revenue growth down the road.

 

It is government’s purview to make decisions on behalf of Nova Scotians and do what they can to support Nova Scotians to provide them with programs and services they need when they need them, so they make those decisions. At the end of the day, Nova Scotians have to decide if those are the decisions that they wanted made.

 

RICK BURNS: I really appreciate that. There’s certainly a lot of work that goes in both at the time of acting on additional appropriation, as well as the technical accounting procedure and the budgetary process that impacts it as well. That addresses a question on additional appropriation, so I want to ask one about alternative procurement. Understanding in a similar space and in a similar situation - again continuing with the fact that the impact on community, on homes, on businesses by natural disasters such as the wildfire - we’ve also had floods and hurricanes and all kinds of problematic weather in our environment and our community and our province.

 

Some of the response that government has provided for that has been funded through alternative procurement as well. I wonder if you could speak to the alternative procurement mechanisms that have been used to help Nova Scotians in response to emergency and national disasters.

 

[10:45 a.m.]

 

JOANNE MUNRO: Yes, there is a specific circumstance within the Canada Free Trade Agreement around emergency and emergency response that goes back to government is responsible to support public safety and public health. Emergency response - let’s go back to - I’m sure we all remember COVID-19 where it was a public heath crisis, and the mechanism that was used because of speed and first time ever we’ve all had to be involved in something as big and broad and serious as that. Emergency response was necessary in providing public safety. So that is one. The discussions happen, and emergency response happens.

 

The same within fires and floods. When you have an emergency and it bridges out, you can’t go to RFP and find out who can be the contractor to replace that bridge. There’s a public safety issue there. So immediately you find a contractor who can go and take care of that bridge right away. We don’t have the luxury of time. The same with wildfires. There are a lot of circumstances and situations that are used. There is discussion. There is protocol and sign-off and that kind of thing, but you have to do it in a way that allows you to do it with speed.

 

I would love my colleague here to contribute to that conversation, but it is a fundamental exemption within the CFTA that allows us to react and respond to public health and public safety.

 

CHRIS MITCHELL: I actually don’t have much to add. I think the idea is that the trade agreements recognize and allow for public bodies to expend resources in times of emergency without necessarily open and competitive processes. That is, in those particular cases, to achieve the speed that they need to deal with that emergency. They’re framed up. They’re Circumstance 1 in the ALTP Circumstance Guide for emergencies, and they’re used by departments under those exact sort of situations that you’ve described.

 

THE CHAIR: MLA Boudreau with three-and-a-half minutes.

 

HON. TREVOR BOUDREAU: I might not get to my last question. I might just use my time to kind of talk about what I’ve heard and what I think about when we talk about these two topics. What I’m hearing is this is - when I talk about additional appropriations, this is a long-standing practice. This has been happening for many, many years. In fact, in 2010, my understanding is it’s the NDP government through the Finance Act who kind of created this process or adjusted this process accordingly. My understanding is that also in 2021, there was a need for the Liberal government at the time to amend that to be able to utilize more resources or more funds through this process when needed.

 

I think this goes back to my question and conversation about the budgeting process. Executive Deputy Minister Dean talked about the surpluses in the last four years and the additional monies that we had. When we have the best information when you’re creating a budget, sometimes you actually have more revenue coming in. That’s usually in September or December, I believe, that you start seeing those things. Then with that, it’s about investing, and our government has chosen to invest in the needs of Nova Scotians with some of those additional funds.

 

When we talk about community and additional appropriations in CCTH, we knew in the budget process that those things were there, but we budgeted accordingly to the amount of money we expected to have. Then, all of a sudden, you have extra money and you can go back to some of these priorities. I think this is about understanding that whole process and being able to invest in Nova Scotians. That’s why sometimes you’ll see the number being $6.7 billion - because we had additional funds and we were able to invest in Nova Scotians in the appropriate way in the needs that they wanted.

 

Other governments have made choices before us not to invest, whether it’s in health care, whether it’s in building more public housing, whether it’s in building long-term care facilities. I can talk about the retention bonus for health care workers. I can talk about the retention bonus for health care workers. I can talk about the 23 percent increase to wages for CCAs. All of these things - we’re talking about additional appropriations. We invest as a government in Nova Scotians when and where we can. I think it’s important for people to understand that.

 

I think it’s also important to understand that we’ve been through some unprecedented times, more recently with the global challenges that we’re facing, but Nova Scotia in terms of the natural disasters that we’ve had. I think the government before us in their eight years had one natural disaster. I think we had four in four years. I think that’s important to highlight - that we’re dealing with different times. We’ve responded where we can, when we can.

 

I think it’s also important to highlight the importance of the accountability measures that are in place. I think of the four times a year that those forecasts come in. We talk about the additional appropriations. We talk about the increases or decreases in revenues and how we adjust accordingly. I think about the opportunity to have these discussions in the Public Accounts Committee. I think about the budget process in the Legislature. We have 80 hours of debate on the budget to understand what that budget process is.

 

The ability and the availability of the OICs, to be able to go in and say . . .

 

THE CHAIR: Order, please. The time for questioning has elapsed. I thank everyone for attending, and I ask if any of the witnesses would like to make any closing comments. Seeing no closing comments, we’re just going to have a one-minute recess, if you don’t mind, and we’ll be back here at 10:52 a.m. and a half. (Laughter) Just because we have committee business we have to get done up.

 

[10:52 a.m. The committee recessed.]

 

[10:53 a.m. The committee reconvened.]

 

THE CHAIR: Order, please. We’re going to carry on here with committee business, which I don’t have right in front of me. First is the report from the subcommittee. I believe everybody has that in front of them. We’ll need a vote on that. Are there any questions or comments in advance? MLA Boudreau.

 

TREVOR BOUDREAU: If there are no comments, I’m fine to make the motion to accept the subcommittee’s recommendations and move forward with those.

 

THE CHAIR: All those in favour? Contrary minded? Thank you.

 

The motion is carried.

 

Our next meeting is on June 17^th with the Department of Growth and Development, the Affordable Housing Association of Nova Scotia, Turner Drake & Partners Ltd., and it’s about the Review of our Homes, Action for Housing Five-Year Plan.

 

Is there any additional committee business? Seeing none, I call this meeting adjourned.

 

[The committee adjourned at 10:55 a.m.]