After growth of 2.4% in 2010, Nova Scotia will see its economy slow in the coming year, according to the Provincial Monitor report by BMO Capital Markets Economics. However, future exports of natural gas are a bright spot on the horizon.
“Thanks to fading fiscal stimulus and government restraint, growth is likely to clock in at 2% this year, well below the national rate,” said Robert Kavcic, a BMO economist. The province is in deficit-reduction mode, and efforts are ongoing to return the budget shortfall (about 1% of gross domestic product in fiscal 2011-2012) to balance on a sustained basis.
“Despite softening growth, there’s still great news in Nova Scotia with construction activity at Encana’s $800 million Deep Panuke natural gas project continuing,” said Laura Charlton, vice president of the Nova Scotia District at BMO Bank of Montreal. “The first gas is expected to begin flowing late in the year, and we can look forward to bigger exports in the coming years” (see Daily GPI, Nov 16, 2009).
Encana’s Deep Panuke project involves the installation of facilities required to produce and process gas from the Deep Panuke field, about 155 miles southeast of Halifax, NS, on the Scotian Shelf. Gas from Deep Panuke will be processed offshore and transported, via subsea pipeline, to Goldboro, NS, for further transport to markets via the Maritimes & Northeast Pipeline. First gas is expected from Deep Panuke in 2011, according to the company.
Nova Scotia is now forecasting a $97 million surplus for fiscal 2010-2011, an improvement from the $203 million deficit projected in September. This is the result of higher revenue and lower spending, plus savings from pension valuation adjustment. The province still anticipates a $370 million deficit in fiscal 2011-2012, as projected in the spring budget, BMO said.
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