Province Of Nova Scotia 18-K Annual report (foreign governments)

Consolidated Financial Statements

Consolidated Financial Statements

Consolidated Financial Statements

Statement of Responsibility

for the Consolidated Financial Statements
of the Province of Nova Scotia

Responsibility for the integrity, objectivity, and fair presentation of the consolidated financial statements of the Province of Nova Scotia rests with the government. These financial statements are prepared on behalf of the Minister and Deputy Minister of Finance by the Controller in accordance with the accounting principles recommended by the Public Sector Accounting Board of the Canadian Institute of Chartered Accountants (CICA), supplemented where appropriate by other CICA and International Federation of Accountants accounting standards or pronouncements.

The consolidated financial statements include a Consolidated Statement of Financial Position, a Consolidated Statement of Operations and Accumulated Deficits, a Consolidated Statement of Change in Net Direct Debt, and a Consolidated Statement of Cash Flow. They present fairly, in all material respects, the financial position and the results of operations for the year ended. The government is responsible for maintaining a system of internal accounting and administrative controls in order to provide reasonable assurance that transactions are appropriately authorized, assets are safeguarded, and financial records are properly maintained,

Under the mandate in section 9 of the Auditor General Act, the Auditor General of Nova Scotia provides an independent opinion on the consolidated financial statements prepared by the government.

 

Byron Rafuse, CMA
Controller

1

Office of the Auditor General

AUDITOR’S REPORT

To the Members of the Legislative
 Assembly of Nova Scotia

I have audited the consolidated statement of financial position of the Province of Nova Scotia as at March 31, 2007 and the consolidated statements of operations and accumulated deficits, change in net direct debt and cash flow for the year then ended. These statements are the responsibility of the Government of Nova Scotia, represented by the Minister of Finance. My responsibility is to express an opinion on these financial statements based on my audit.

I conducted my audit in accordance with Canadian generally accepted auditing standards. Those standards require that I plan and perform an audit to obtain reasonable assurance whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.

In my opinion, these financial statements present fairly, in all material respects, the financial position of the Province of Nova Scotia as at March 31, 2007 and the results of its operations, changes in net direct debt and cash flows for the year then ended in accordance with Canadian generally accepted accounting principles for the public sector.

 

Jacques R. Lapointe, CA CIA
Auditor General

Halifax, Nova Scotia
June 30, 2007

2

Consolidated Financial Statements

Statement 1

Consolidated Statement of Financial Position
As at March 31, 2007
($ thousands)

				2006
	2007			(as restated)
Financial Assets
Cash and Short-term Investments (Note 3)		873,090			391,861
Accounts Receivable and Advances		821,509			830,248
Inventories for Resale		3,957			4,043
Loans Receivable (Schedule 3)		1,107,683			1,081,131
Investments (Schedule 3)		43,840			43,468
Investment in Government Business Enterprises (Schedule 6)		15,615			4,932
		2,865,694			2,355,683
Liabilities
Bank Advances and Short-term Borrowings		790,909			900,106
Accounts Payable and Accrued Liabilities		1,317,078			1,314,779
Deferred Revenue (Note 4)		1,143,636			1,031,818
Accrued Interest		200,559			204,736
Unmatured Debt of Governmental Units (Schedule 4)		10,107,186			9,627,323
Unamortized Foreign Exchange Translation Gains		118,863			91,444
Unamortized Premiums and Discounts		(3	)		(4	)
Federal Equalization Repayable Loan (Note 6)		108,290			120,322
Pension, Retirement and Other Obligations (Note 7)		1,436,381			1,304,329
		15,222,899			14,594,853
Net Direct Debt		12,357,205			12,239,170
Non-Financial Assets
Tangible Capital Assets (Schedule 7)		3,688,117			3,387,318
Inventories of Supplies		46,694			47,560
Prepaid Expenses		16,632			16,084
		3,751,443			3,450,962
Accumulated Deficits		(8,605,762	)		(8,788,208	)
Trust Funds under Administration (Note 8)		8,722,128			8,055,543
Accounting Changes (Note 2)
Contingencies and Contractual Obligations (Note 12)
Comparative Figures (Note 13)

The accompanying notes and schedules are an integral part of these Financial Statements

3

Public Accounts Volume 1 — Financial Statements

Statement 2

Consolidated Statement of Operations and Accumulated Deficits
For the fiscal year ending March 31, 2007
($ thousands)

							Actual
	Estimate			Actual			2006
	2007			2007			(as restated)
Revenue (Schedule 1)
Provincial Sources		4,402,558			4,529,586			4,227,744
Federal Sources		2,691,292			2,598,883			2,477,254
Prior Years’ Adjustments — Federal/Provincial Fiscal Arrangements		—			19,657			21,447
Other Revenue		619,425			682,711			676,689
Sinking Fund and Public Debt Retirement Fund Earnings		87,783			121,591			124,395
Total Revenue		7,801,058			7,952,428			7,527,529
Expenses (Schedule 2)
Agriculture		50,740			54,552			57,833
Community Services		960,825			836,008			815,933
Education		1,454,424			1,510,086			1,420,822
Assistance to Universities		235,987			268,710			231,958
Energy		22,982			19,808			21,606
Environment and Labour		44,699			82,393			81,324
Finance		25,521			39,441			30,252
Health		2,974,241			3,054,867			2,848,468
Health Promotion and Protection		47,350			49,477			34,701
Justice		216,582			214,604			203,781
Natural Resources		71,020			74,654			72,386
Public Service		226,957			222,418			194,496
Service Nova Scotia and Municipal Relations		232,685			195,862			171,442
Tourism Culture and Heritage		51,764			56,275			53,471
Transportation and Public Works		301,426			296,011			277,632
Restructuring Costs		117,216			95,539			77,087
Pension Valuation Adjustment		33,213			83,137			29,587
Loss (Gain) on Disposal of Crown Assets		—			(1,963	)		(6,395	)
Debt Servicing Costs (Note 10)		994,998			958,744			1,017,779
Total Expenses (Note 9)		8,062,630			8,110,623			7,634,163
Deficit from Governmental Units		(261,572	)		(158,195	)		(106,634	)
Net Income from Government Business Enterprises (Schedule 6)		335,064			340,641			345,419
Provincial Surplus		73,492			182,446			238,785
Accumulated Deficits, Beginning of Year
As Previously Reported					(8,809,290	)		(9,037,408	)
Accounting Changes (Note 2)					21,082			10,415
As restated					(8,788,208	)		(9,026,993	)
Accumulated Deficits, End of Year					(8,605,762	)		(8,788,208	)

The accompanying notes and schedules are an integral part of these Financial Statements

4

Consolidated Financial Statements

Statement 3

Consolidated Statement of Change in Net Direct Debt
For the fiscal year ended March 31, 2007
($ thousands)

							Actual
	Estimate			Actual			2006
	2007			2007			(as restated)
Net Direct Debt, Beginning of Year
As Previously Reported		(12,239,170	)		(12,239,170	)		(12,305,174	)
Accounting Changes (Note 2)		—			—			(56	)
As restated		(12,239,170	)		(12,239,170	)		(12,305,230	)
Changes in the Year
Provincial Surplus		73,492			182,446			238,785
Acquisition of Tangible Capital Assets		(358,466	)		(548,239	)		(399,896	)
Amortization of Tangible Capital Assets		148,496			241,874			216,040
Disposals and Adjustments to Tangible Capital Assets		—			5,566			13,839
(Increase) Decrease in Inventories of Supplies		—			866			(1,506	)
Increase in Prepaid Expenses		—			(548	)		(1,202	)
Total Changes in the Year		(136,478	)		(118,035	)		66,060
Net Direct Debt — End of Year		(12,375,648	)		(12,357,205	)		(12,239,170	)

Except for the Provincial Surplus figure, the Estimates for items shown as Changes in the Year reflect the activity of the Consolidated Fund only.

The accompanying notes and schedules are an integral part of these Financial Statements

5

Public Accounts Volume 1 – Financial Statements

Statement 4

Consolidated Statement of Cash Flow
For the fiscal year ended March 31, 2007
($ thousands)

				2006
	2007			(as restated)
Cash Inflow (Outflow) from the following activities:
Operating:
Provincial Surplus		182,446			238,785
Sinking Fund and Public Debt Retirement Fund Earnings		(121,591	)		(124,395	)
Foreign Exchange Amortization		2,130			5,963
Amortization of Tangible Capital Assets		241,874			216,040
Net Income from Government Business Enterprises		(340,641	)		(345,419	)
Profit Distributions from Government Business Enterprises		329,958			336,552
Net Change in Other Items (Note 11)		141,938			482,942
		436,114			810,468
Investing:
Repayment of Loans		182,908			166,843
Advances and Investing		(209,832	)		(224,454	)
		(26,924	)		(57,611	)
Capital:
Acquisition of Tangible Capital Assets		(548,239	)		(399,896	)
Proceeds from Disposal of Tangible Capital Assets		4,189			7,209
Loss on Disposal of Tangible Capital Assets		1,377			6,630
		(542,673	)		(386,057	)
Financing:
Debentures Issued		1,474,021			788,471
Repayment of Federal Equalization Repayable Loan		(12,032	)		—
Foreign Currency Swaps and Adjustments		(8,204	)		7,632
Sinking Fund Installments		(63,246	)		(54,840	)
Proceeds from Sinking Funds for Debt Repayment		360,000			657,700
Repayment of Debentures and Other Long-term Obligations		(1,135,827	)		(1,779,114	)
		614,712			(380,151	)
Cash (Outflows) Inflows		481,229			(13,351	)
Cash Position, Beginning of Year		391,861			405,212
Cash Position, End of Year		873,090			391,861
Cash Position Represented by:
Cash and Short-Term Investments		873,090			391,861

The accompanying notes and schedules are an integral part of these Financial Statements

6

Schedules to the Consolidated Financial Statements

Schedule 1

Revenue
For the fiscal year ended March 31, 2007
($ thousands)

			2006
	2007		(as restated)
Provincial Sources
Income Taxes		2,071,580		1,929,957
Sales Taxes		1,494,873		1,483,575
Petroleum Royalties		269,100		123,850
Other Provincial Revenue		694,033		690,362
		4,529,586		4,227,744
Federal Sources
Equalization Payments		1,385,539		1,343,527
Canada Health and Social Transfers		874,781		835,979
Other Federal Payments		338,563		297,748
		2,598,883		2,477,254
Prior Years Adjustments — Federal/Provincial Fiscal Arrangements
Provincial Sources		12,935		16,420
Federal Sources		6,722		5,027
		19,657		21,447
Other Revenue		682,711		676,689
Sinking Fund and Public Debt Retirement Fund Earnings		121,591		124,395
Total Revenue		7,952,428		7,527,529

7

Public Accounts Volume 1 — Financial Statements

Schedule 2

Expenses

For the fiscal year ended March 31, 2007
($ thousands)

	2007		2006
			(as restated)
Agriculture
Department of Agriculture		54,552		57,513
CIDA Ghana / Africa Project		—		320
		54,552		57,833
Community Services
Department of Community Services		738,856		721,304
Nova Scotia Housing Development Corporation		97,152		94,629
		836,008		815,933
Education
Department of Education		300,706		275,761
Annapolis Valley Regional School Board		114,739		112,696
Cape Breton Victoria Regional School Board		140,113		125,270
Chignecto-Central Regional School Board		174,312		169,012
Conseil Scolaire Acadien Provincial		40,694		37,399
Halifax Regional School Board		378,182		358,178
Nova Scotia Community College		157,157		144,283
Scotia Learning Centre Technology Refresh		—		2,325
South Shore Regional School Board		65,642		61,984
Strait Regional School Board		78,756		73,435
Tri County Regional School Board		59,785		60,479
		1,510,086		1,420,822
Assistance to Universities		268,710		231,958
Energy
Department of Energy		17,004		21,186
Coal Research Agreement Fund		—		275
Nova Scotia Market Development Initiative Fund		2,804		145
		19,808		21,606
Environment and Labour
Department of Environment and Labour		40,865		40,965
Resource Recovery Fund Board Incorporated		41,528		40,359
		82,393		81,324

8

Schedules to the Consolidated Financial Statements

Schedule 2

Expenses (continued)

For the fiscal year ended March 31, 2007
($ thousands)

				2006
	2007			(as restated)
Finance
Department of Finance		19,591			30,771
Nova Scotia Government Fund Limited		85			99
Nova Scotia Hurricane Juan Recovery Fund		—			53
Nova Scotia Pension Agency		19,653			—
Sydney Steel Corporation		229			111
3052155 Nova Scotia Limited		(117	)		(782	)
		39,441			30,252
Health
Department of Health		1,274,487			1,173,877
Annapolis Valley District Health Authority		100,410			91,730
Cape Breton District Health Authority		211,274			198,819
Capital District Health Authority		647,609			625,767
Colchester East Hants Health Authority		60,327			54,664
Cumberland Health Authority		49,332			48,423
Guysborough Antigonish-Strait Health Authority		60,862			57,597
Insured Prescription Drug Plan		166,959			159,542
Izaak Walton Killam Health Centre		200,258			167,670
Nova Scotia Gaming Foundation		354			744
Nova Scotia Health Research Foundation		4,829			5,065
Pictou County Health Authority		60,624			60,725
Provincial Drug Distribution Program		75,031			71,814
South Shore District Health Authority		60,650			56,672
South West Nova District Health Authority		81,861			75,359
		3,054,867			2,848,468
Health Promotion and Protection
Department of Health Promotion and Protection		49,477			34,701
Justice
Department of Justice		195,653			185,472
Nova Scotia Legal Aid Commission		18,951			18,309
		214,604			203,781
Natural Resources
Department of Natural Resources		67,675			66,659
Acadia Coal Company Limited Fund		2			2
Crown Land Silviculture Fund		2,080			2,542
Nova Scotia E 911 Cost Recovery Fund		3,961			2,981
Habitat Conservation Fund		147			202
Sustainable Forestry Fund		549			—
Off Highway Vehicle Infrastructure Fund		240			—
		74,654			72,386

9

Public Accounts Volume 1 — Financial Statements

Schedule 2

Expenses (continued)

For the fiscal year ended March 31, 2007
($ thousands)

	2007			2006
				(as restated)
Public Service
Public Service		160,028			147,056
Nova Scotia Business Incorporated		22,690			22,257
NS Film Development Corporation		3,884			3,713
NS Innovation Corporation		5,874			5,740
Trade Centre Limited		15,940			13,340
Waterfront Development Corporation Ltd.		3,198			2,390
Nova Scotia Nominee Program		8,932			—
Interest only for Nova Scotia Nominee Program		1,872			—
		222,418			194,496
Service Nova Scotia and Municipal Relations
Department of Service Nova Scotia and Municipal Relations		195,162			170,825
Nova Scotia Coordinate Referencing System Trust Fund		—			—
Nova Scotia Municipal Finance Corporation		700			617
		195,862			171,442
Tourism, Culture and Heritage
Department of Tourism, Culture and Heritage		52,647			50,146
Art Gallery of Nova Scotia		3,628			3,325
		56,275			53,471
Transportation and Public Works
Department of Transportation and Public Works		296,011			277,632
Sydney Tar Ponds Agency		—			—
		296,011			277,632
Restructuring Costs		95,539			77,087
Pension Valuation Adjustment		83,137			29,587
Loss (Gain) on Disposal of Crown Assets		(1,963	)		(6,395	)

10

Schedules to the Consolidated Financial Statements

Schedule 2

Expenses (continued)

For the fiscal year ended March 31, 2007
($ thousands)

			2006
	2007		(as restated)
Debt Servicing Costs
Consolidated Fund		913,359		971,339
Annapolis Valley District Health Authority		322		309
Annapolis Valley Regional School Board		163		253
Cape Breton District Health Authority		1,138		1,059
Cape Breton Victoria Regional School Board		325		383
Capital District Health Authority		5,366		5,326
Chignecto-Central Regional School Board		1,043		1,225
Colchester East Hants Health Authority		205		207
Conseil Scolaire Acadien Provincial		43		59
Cumberland Health Authority		140		138
Guysborough Antigonish-Strait Health Authority		282		262
Halifax Regional School Board		1,538		1,886
Izaak Walton Killam Health Centre		685		1,402
Nova Scotia Government Fund Limited		395		321
Nova Scotia Housing Development Corporation		31,160		30,047
Nova Scotia Legal Aid		133		134
Nova Scotia Municipal Finance Corporation		963		1,834
Pictou County Health Authority		229		242
Resource Recovery Fund Board		—		3
South Shore District Health Authority		255		242
South Shore Regional School Board		70		128
South West Nova District Health Authority		360		348
Strait Regional School Board		269		326
Tri-County Regional School Board		64		95
Waterfront Development Corporation Limited		237		211
		958,744		1,017,779
Total Expenses		8,110,623		7,634,163

11

Public Accounts Volume 1 — Financial Statements

Schedule 3

Loans and Investments
As at March 31, 2007
($ thousands)

	Loans and				Net		Net
	Investments		Provisions		2007		2006
Loans of the Consolidated Fund:
Agriculture and Rural Credit Act		190,404		8,486		181,918		176,407
Fisheries Development Act		83,897		429		83,468		80,001
Housing Development Corporation Act		65,230		24,161		41,069		35,497
Industrial Development Act		89,251		56,443		32,808		34,898
Venture Corporations Act		809		809		—		—
Municipal Loan and Building Fund Act		375		—		375		515
Halifax-Dartmouth Bridge Commission		12,000		—		12,000		17,000
Miscellaneous		709		—		709		709
Nova Scotia Market Development Initiative Fund		5,600		—		5,600		7,600
		448,275		90,328		357,947		352,627
Loans of Governmental Units:
Nova Scotia Business Incorporated		138,812		39,760		99,052		100,324
Nova Scotia Government Fund		8,062		—		8,062		7,175
Nova Scotia Innovation Corporation		264		—		264		86
Nova Scotia Municipal Finance Corporation		642,234		—		642,234		620,874
Other Government Service Organizations		124		—		124		45
		789,496		39,760		749,736		728,504
Total Loans		1,237,771		130,088		1,107,683		1,081,131
Investments of the Consolidated Fund:
Housing Development Corporation Act		2,114		105		2,009		1,959
Industrial Development Act		7,493		—		7,493		7,614
		9,607		105		9,502		9,573
Investments of Governmental Units:
Art Gallery of NS		1,803		—		1,803		1,815
Nova Scotia Business Incorporated		26,106		12,888		13,218		12,333
Nova Scotia Innovation Corporation		17,266		—		17,266		17,747
Resource Recovery Fund Board		2,051		—		2,051		2,000
		47,226		12,888		34,338		33,895
Total Investments		56,833		12,993		43,840		43,468
Total Loans and Investments		1,294,604		143,081		1,151,523		1,124,599

Notes:

The Provisions listed above include amounts for possible guarantee payouts related to the Industrial Development Act $5,800 (2006 — $400), the Housing Development Corporation Act $14,929 (2006 — $14,385), and Nova Scotia Business Incorporated $760 (2006 — $650).

Also included in Provisions for the Housing Development Corporation Act is $3,200 (2006 - - $3,200) for interest fluctuations.

12

Schedules to the Consolidated Financial Statements

Schedule 4

Unmatured Debt
As at March 31, 2007
($ thousands)

			Sinking
			Funds and		Net		Net
	Gross		Defeasance		Debt		Debt
	Debt		Assets		2007		2006
Governmental Units
Consolidated Fund		11,713,517		1,906,772		9,806,745		9,309,558
Nova Scotia Government Fund Limited		10,050		—		10,050		10,250
Nova Scotia Housing Development Corporation		273,128		—		273,128		283,638
Nova Scotia Municipal Finance Corporation		12,008		—		12,008		20,725
Nova Scotia Power Finance Corporation		1,045,870		1,045,870		—		—
Waterfront Development Corporation Limited		2,885		—		2,885		2,800
Other		2,370		—		2,370		352
Unmatured Debt of Governmental Units		13,059,828		2,952,642		10,107,186		9,627,323
Government Business Enterprises
Halifax-Dartmouth Bridge Commission		106,379		44,619		61,760		73,478
Highway 104 Western Alignment Corporation		78,600		—		78,600		84,592
Nova Scotia Gaming Corporation		35,132		—		35,132		58,383
Nova Scotia Liquor Corporation		5,313		—		5,313		6,050
Unmatured Debt of Government Business Enterprises		225,424		44,619		180,805		222,503
Total Unmatured Debt		13,285,252		2,997,261		10,287,991		9,849,826

Notes:

All debt is presented in Canadian dollar equivalents and after giving effect to currency swap contracts itemized in Note 5.

The current and long-term portions of unmatured debt of Governmental Units are shown on the Consolidated Statement of Financial Position with reference to this schedule. Debt of Government Business Enterprises is reflected in the Deficiency in Government Business Enterprises and in further detail in Schedule 6.

All foreign debt is hedged to Canadian dollars with the exception of $1,054.0 million US$ denominated debt. A one cent change in the CDN/US$ foreign exchange rate as of March 31, 2007 would result in a change in long-term debt, and a foreign exchange gain or loss, of $10.5 million. This hypothetical foreign exchange gain or loss would be amortized starting in 2008. The change in debt service costs for the 2008 fiscal year would be approximately $0.9 million due to this foreign exchange gain or loss amortization.

As of March 31, 2007, the Consolidated Fund held Sinking Funds and Public Debt Retirement Funds of $1,906.8 million. These funds were comprised of $1,394.0 million in Canadian assets and $512.8 million in US assets (US $444.8 million converted to CDN$ based on the underlying securities’ effective foreign exchange rates). Total market value of both funds is $2,052.7 million at year-end. During the year, contributions were $147.2 million, total earnings were $121.6 million and redemptions were $449.3 million.

13

Public Accounts Volume 1 — Financial Statement

Schedule 4

Unmatured Debt (continued)
As at March 31, 2007
($ thousands)

Notes:

Sinking fund assets are recorded at cost, which includes premiums and discounts associated with the purchase of these investments. These premiums and discounts are amortized on a straight-line basis over the term of the related investment. The unamortized portion of the premiums and discounts is included as part of the value of the sinking funds. As at March 31, 2007, the unamortized net premium was $67.1 million.

Assets consist primarily of debentures of the provinces and Government of Canada with fixed interest rates ranging from 4.6% to 11% for Canadian funds and 3.25% to 9.50% for US funds. For designated sinking funds, payments normally commence on the first anniversary date of the issue of the debenture and are designed to retire the debt over the term of the issue. At year-end, the province held $1,065.3 million carrying value worth of its own debentures (par value of $1,004.7 million) in Sinking Funds and Public Debt Retirement Funds as active investments. These were comprised of $373.7 million in Canadian assets and $691.6 million in US assets.

As per the Nova Scotia Power Corporation Privatization Agreement, Nova Scotia Power Finance Corporation provides for defeasance of its debt. The portfolio of defeasance assets consists of Nova Scotia Power Corporation, other Provincial Governments and utilities, Federal US bonds, coupons or residuals. This debt is shown net of defeasance assets on the Statement of Financial Position.

Projected Payments
($ thousands)

	Governmental Units
	By Major Currency (CDN Equivalent)														Government
	Net Principal Repayments						Sinking Fund Requirements						Total		Business
	CDN		US		Total		CDN		US		Total		Payments		Enterprises		Total
2008		636,654		—		636,654		36,400		21,512		57,912		694,566		82,725		777,291
2009		310,442		—		310,442		36,400		21,512		57,912		368,354		14,039		382,393
2010		696,358		—		696,358		36,400		21,512		57,912		754,270		4,128		758,398
2011		686,997		—		686,997		36,400		21,512		57,912		744,909		9,746		754,655
2012		1,617,178		—		1,617,178		36,400		21,512		57,912		1,675,090		3,174		1,678,264
2013 & thereafter		5,761,069		502,107		6,263,176		342,796		92,761		435,557		6,698,733		66,993		6,765,726
		9,708,698		502,107		10,210,805		524,796		200,321		725,117		10,935,922		180,805		11,116,727

Net principal repayments are comprised of the principal amount due less available designated sinking funds to retire the debenture.

In addition, the province has approximately $828.9 million in unrestricted sinking funds that can be used towards the retirement of any unmatured debt. The use of these funds is evaluated each year based on a detailed analysis of cash requirements.

14

Schedules to the Consolidated Financial Statements

Schedule 5

Gross Long-Term Debt
As at March 31, 2007
($ thousands)

	Foreign
	Exchange		CDN $		Maturity
	Rate		Amount		Dates		Interest Rates
Governmental Units:
			Debentures
Consolidated Fund
Consolidated Fund (CDN$)				10,101,844		2007 to 2037	4.45% to 15.998%
Consolidated Fund (US $1,054,040)		1.1529		1,215,203		2012 to 2022	5.125% to 9.5%
Consolidated Fund (UK)		2.2697		—		2011 to 2019	11.75% to 16.75%
Consolidated Fund (Euro)		1.5418		—		2007 to 2010	4.475%
Nova Scotia Municipal Finance Corporation				12,008		2007 to 2017	1.0% to 5.5%
Nova Scotia Power Finance Corporation
Nova Scotia Power Finance Corporation (CDN$)				700,000		2012 to 2031	10.25% to 11.85%
Nova Scotia Power Finance Corporation (US$300,000)		1.1529		345,870		2021	9.4%
Total — Debentures				12,374,925
			Loans
Consolidated Fund — Other Debt				426		2007 to 2012	4.03% to 8.375%
Nova Scotia Government Fund Limited				10,050		2007	1%
Nova Scotia Housing Development Corporation				273,128		2007 to 2034	4.0% to 21.5%
Waterfront Development Corporation				2,885	Demand Loan		bank prime
Total — Loans				286,489
			Capital Leases
Consolidated Fund				396,044		2007 to 2027	4.35% to 11%
Other				2,370		2010 to 2011	5.0% to 8.0%
Total — Capital Leases				398,414
Total — Long-term Debt of Governmental Units				13,059,828

15

Public Accounts Volume 1 — Financial Statements

Schedule 5

Gross Long-Term Debt (continued)

As at March 31, 2007
($ thousands)

	CDN $		Maturity
	Amount		Dates		Interest Rates
Government Business Enterprises:
	Debentures
Halifax-Dartmouth Bridge Commission		94,379		2007		5.95	%
Highway 104 Western Alignment Corporation		78,600		2011 to 2026	10.13% to 10.76%
	Loans
Halifax-Dartmouth Bridge Commission		12,000		2007	floating (line of credit)
Nova Scotia Gaming Corporation		11,082		2010	non interest bearing
	Capital Leases
Nova Scotia Gaming Corporation		24,050		2009 to 2012		12	%
Nova Scotia Liquor Corporation		5,313		2012		13.8	%
Total — Long-term Debt of Government Business Enterprises		225,424
Total Gross Long-term Debt		13,285,252

Call, Redemption and Other Features:

Consolidated Fund

Canadian debentures include the following redeemable issues:

-$1,079.4 million in CPP debentures, which are redeemable in whole or in part before maturity, on six months notice, at the option of the Minister of Finance of Canada;

-$35 million in medium-term promissory notes, redeemable in whole but not in part, on the initial redemption date and on each redemption date thereafter, on 15 days notice, at the option of the province.

The interest rates shown for the Canadian and US debentures reflect the fixed rates only. There are debentures that have floating and step-up rates. Floating interest rates are adjusted on either a monthly or quarterly basis. Step-up rates are adjusted per the individual promissory note step-up schedules.

Housing Development Corporation

Mortgages and notes payable are secured by investments in social housing.

Highway 104 Western Alignment Corporation

In relation to its senior toll bonds, the Corporation has provided an assignment of all the present and future property and assets, including rights to operate the facility, and a security interest in the Debt Service Reserve Account and the Major Maintenance Reserve Account.

In relation to its junior toll bonds, the Corporation has assigned a second charge security interest in all security pledged to the senior toll revenue bondholders.

Halifax-Dartmouth Bridge Commission

The Commission’s toll bonds are secured by an assignment of the revenues of the Commission; subject to the prior payment of operating and maintenance expenses, and the maintenance of certain reserve funds by the Commission.

16

Schedules to the Consolidated Financial Statements

Schedule 6

Government Business Enterprises

As at March 31, 2007
($ thousands)

	2007										2006
	Halifax -		Highway 104
	Dartmouth		Western		Nova Scotia		Nova Scotia
	Bridge		Alignment		Gaming		Liquor
	Commission		Corporation		Corporation		Corporation		Total		Total
Cash		7,477		651		9,172		16,156		33,456		24,871
Accounts Receivable		301		64		—		2,219		2,584		2,913
Inventory		—		14		1,729		36,761		38,504		31,747
Tangible Capital Assets		64,559		100,667		94,725		35,513		295,464		300,948
Other Assets		48,742		33,241		814		3,384		86,181		78,515
Total Assets		121,079		134,637		106,440		94,033		456,189		438,994
Accounts Payable		1,831		1,538		4,545		71,283		79,197		44,118
Long-term Debt		106,379		78,600		35,132		5,313		225,424		260,404
Other Liabilities		5,964		45,789		66,763		17,437		135,953		129,540
Total — Liabilities		114,174		125,927		106,440		94,033		440,574		434,062
Equity		6,905		8,710		—		—		15,615		4,932
Total Liabilities and Equity		121,079		134,637		106,440		94,033		456,189		438,994
Revenue		25,877		18,305		462,330		511,038		1,017,550		1,022,470
Expenses		11,199		6,398		318,040		320,914		656,551		655,711
Debt Servicing		7,026		8,876		2,573		1,883		20,358		21,340
Total — Expenses		18,225		15,274		320,613		322,797		676,909		677,051
Net Income		7,652		3,031		141,717		188,241		340,641		345,419

Notes:

The year-end for Halifax-Dartmouth Bridge Commission is December 31. The year-end of the other three corporations is March 31.

17

Public Accounts Volume 1 – Financial Statements

Schedule 6

Government Business Enterprises (continued)

As at March 31, 2007

Halifax-Dartmouth Bridge Commission

The Commission is incorporated by Special Statute of the Province of Nova Scotia. The purpose of the Commission is to construct, maintain and operate transportation projects and their necessary approaches across the Halifax Harbour, between the communities of Halifax and Dartmouth, and across the North West Arm. Bridge tolls are regulated by the Nova Scotia Utility and Review Board, a provincially controlled public sector entity. The Commission’s fiscal year end is December 31. The commission paid $5.0 million on the outstanding line of credit to the province’s Consolidated Fund leaving a balance of $12.0 million as of December 31, 2006 (2005- $17.0 million). The Commission records depreciation on bridge structures, buildings, some bridge components, and electronic transponders using the straight-line method and uses the declining balance method for all other assets. Included in other assets at December 31, 2006 is a reserve fund in the amount of $47.3 million (2005 — $40.0 million), $44.6 million (2005 — $37.9 million) of which is restricted for repayment of principal, interest and fees on Toll Revenue Bonds as established under the terms of the trust indenture.

Highway 104 Western Alignment Corporation

The Corporation has been established to finance, design, construct, operate and maintain a 45 km stretch of highway between Masstown and Thompson Station in the counties of Colchester and Cumberland, Nova Scotia. The Province of Nova Scotia retains ownership of the highway. The Corporation is granted the right to operate the highway and collect tolls for a 30-year period, pursuant to an agreement dated April 1, 1996, after which time the right will revert to the province. In addition, the Corporation has entered into an operating agreement with Atlantic Highways Management Corporation whereby compensation is based on the annual operating budget plus a variable fee. The Corporation’s fiscal year end is March 31. The Corporation records depreciation using the sinking fund method. Restricted assets, consisting of short-term investments in the amount of $32.4 million (2006 — $32.8 million), are included in other assets. These reserve accounts were established in accordance with trust indenture agreements between the Corporation and bondholders.

The Province of Nova Scotia contributed $55.0 million toward the construction of the highway, one-half of which was recovered from the Federal Government under the Canada-Nova Scotia Strategic Highway Improvement Program. There were no contributions in the current or previous year.

Nova Scotia Gaming Corporation

The Corporation was incorporated on February 15, 1995 by Chapter 4 of the Acts of 1994-95, the Gaming Control Act. The purpose of the Corporation is to develop, undertake, conduct and manage casinos and other lottery business on behalf of the province. The Corporation’s fiscal year end is March 31.

The revenues of the Corporation are derived from two casinos, located in Halifax and Sydney, and ticket and video lottery sales. The net balance owing to the Province at March 31, 2007 was $53.9 million (2006 — $42.9 million). The Corporation is required to reimburse the operator of the casinos for approved development costs of the Halifax and Sydney casinos. The net present value of the remaining obligations for the casinos is approximately $24.1 million (2006 — $38.8 million).

Unclaimed prizes are retained by the Corporation in a prize fund for one year from the announced beginning date of the draw. At March 31, 2007, this amounted to $1.8 million (2006 — $2.6 million). Restricted cash in the amount of $1.8 million (2006 — $2.6 million) is included in cash.

18

Schedules to the Consolidated Financial Statements

Schedule 6

Government Business Enterprises (continued)

As at March 31, 2007

Video Lottery Terminal (VLT) retailers in Nova Scotia have agreed, under the terms of their agreements with Atlantic Lottery Corporation Inc., to contribute 1% of their VLT commission to the Nova Scotia Gaming Foundation. The Corporation has agreed to contribute an amount equal to all contributions made by the VLT retailers.

In July 2006, as part of its Gaming Strategy, Government approved a contribution of $3.0 million to Nova Scotia Health Promotion and Protection in 2006-2007 (2005-2006 — $3.0 million) to fund problem gambling treatment. The Corporation will provide up to $1.0 million (2006 — $1.0 million) in funds in fiscal 2007 for the harness racing industry in Nova Scotia.

Nova Scotia Liquor Corporation

The Corporation derives its mandate from the Liquor Control Act, Chapter 260 of the Revised Statutes of Nova Scotia, 1989. The Corporation operates retail sales locations across the province. Its fiscal year end is March 31. The net balance owing to the province at March 31, 2007 was $38.2 million (2006 — $8.3 million).

19

Public Accounts Volume 1 – Financial Statements

Schedule 7

Tangible Capital Assets
As at March 31, 2007
($ thousands)

	2007																		2006
				Buildings			Machinery						Roads,
				and Land			Computers			Vehicles			Bridges
				Improve-			and			and			and
	Land			ments			Equipment			Ferries			Highways			Total			Total
																			(as restated)
Cost
Opening Costs		545,986			3,249,851			886,939			89,558			781,151			5,553,485			5,202,717
Additions		42,447			165,355			109,587			16,540			214,310			548,239			399,896
Disposals		(313	)		(2,303	)		(13,518	)		(2,354	)		(558	)		(19,046	)		(49,128	)
Closing Costs		588,120			3,412,903			983,008			103,744			994,903			6,082,678			5,553,485
Accumulated Amortization
Opening Accumulated		—			(1,154,952	)		(631,447	)		(57,008	)		(322,760	)		(2,166,167	)		(1,985,416	)
Disposals		—			—			11,399			2,025			56			13,480			35,289
Amortization Expense		—			(102,709	)		(69,257	)		(9,493	)		(60,415	)		(241,874	)		(216,040	)
Closing Accumulated Amortization		—			(1,257,661	)		(689,305	)		(64,476	)		(383,119	)		(2,394,561	)		(2,166,167	)
Net Book Value		588,120			2,155,242			293,703			39,268			611,784			3,688,117			3,387,318
Opening Balance		545,986			2,094,899			255,492			32,550			458,391			3,387,318			3,217,301
Closing Balance		588,120			2,155,242			293,703			39,268			611,784			3,688,117			3,387,318
Increase (Decrease) in Net Book Value		42,134			60,343			38,211			6,718			153,393			300,799			170,017

20

Schedules to the Consolidated Financial Statements

Schedule 7

Notes to Schedule 7

($ thousands)

Amortization is calculated on a declining balance basis for assets of the Consolidated Fund. The amortization percentages of the more common tangible capital assets are: buildings and land improvements(5%); machinery, computers and equipment (15-50%); ferries (15%); vehicles (20-35%); and roads, bridges and highways (5-15%). Capital leases are amortized on a straight-line basis over the length of each lease (3-25 years).

Amortization is generally calculated on a straight-line basis for assets of entities consolidated with the Consolidated Fund. The estimated useful lives of the more common tangible capital assets are: buildings (including leasehold improvements) and land improvements (2-50 years); machinery, computers and equipment (3-50 years); and vehicles (3-7 years). Capital leases are amortized on a straight-line basis, generally over a 3 to 20 year term.

Social Housing assets are included in Buildings and Land Improvements and relate to the Housing Development Corporation. These assets are amortized using the straight-line method. The net book value of these assets is $325,030 (2006 — $336,101).

Included in the closing costs of the various classes as of March 31, 2007, are costs for assets under construction, which have not yet been amortized. These costs are buildings — $86,935; machinery, computers and equipment — $22,400; vehicles — $4,960; capital leases — $1,416; and roads, bridges and highways — $25,066.

Capital leases are included in the various categories as follows: buildings — cost $470,515, accumulated amortization $168,130; machinery, computers and equipment — cost $39,794, accumulated amortization $29,616; and vehicles — cost $17,004, accumulated amortization $7,182.

21

Public Accounts Volume 1 – Financial Statements

Schedule 8

Direct Guarantees
As at March 31, 2007
($ thousands)

	Authorized		Utilized			Utilized
	2007		2007			2006
Bank Loans:
Nova Scotia Business Incorporated		6,654		4,004			2,754
Industrial Development Act		122,170		83,706			73,524
Nova Scotia Fisheries and Aquaculture Loan Board		100		100			100
Department of Education — Student Loan Program		157,928		157,928			154,874
Total — Bank Loan Guarantees		286,852		245,738			231,252
Promissory Notes:
3052155 NS Limited to Canada-Nova Scotia Offshore Petroleum Board		2,500		2,500			17,500
Total — Promissory Note Guarantees		2,500		2,500			17,500
Mortgages:
Housing Development Corporation Act		11,725		11,725			12,468
Housing Development Corporation Act — CMHC Indemnities		137,217		137,217			144,094
Provincial Finance Act		240		240			240
Total — Mortgage Guarantees		149,182		149,182			156,802
Other Guarantees:
Aliant Telecom MASH Sector		424		424			1,150
Equity Tax Credit Act — Community Economic Development Investment Funds		1,931		1,931			2,402
Nova Scotia Government Fund		9,840		9,840			9,840
Total — Other Guarantees		12,195		12,195			13,392
Total — Direct Guarantees		450,729		409,615			418,946
Less Provision for Guarantee Payout:
Industrial Development Act				(5,800	)		(400	)
Nova Scotia Business Incorporated				(760	)		(650	)
Department of Education — Student Loan Program				(32,839	)		(22,574	)
Housing Development Corporation Act				(14,929	)		(14,385	)
3052155 Nova Scotia Limited				(500	)		(833	)
				(54,828	)		(38,842	)
Less Provision for Debt Reduction Program:
Department of Education — Student Loan Program				(15,085	)		(13,896	)
Net Direct Guarantees not provided for in these statements				339,702			366,208

22

Schedules to the Consolidated Financial Statements

Schedule 9

Government Reporting Entity
As at March 31, 2007

Listed below are the governmental units, government business enterprises and government partnership arrangements that comprise the government reporting entity.

Governmental Units

(Consolidation Method)

Acadia Coal Company Limited Fund

AgraPoint International Inc.

AgriTECH Park Inc.

Annapolis Valley District Health Authority

Annapolis Valley Regional School Board

Art Gallery of Nova Scotia

Bioscience Enterprise Centre Incorporated

Cape Breton District Health Authority

Cape Breton Victoria Regional School Board

Capital District Health Authority

Check Inns Limited (inactive)

Chignecto-Central Regional School Board

Coal Research Agreement Fund

Colchester East Hants Health Authority

Conserve Nova Scotia

Conseil Scolaire Acadien Provincial

CorFor Capital Repairs & Replacements Fund

Consolidated Fund (1)

Crown Land Mine Remediation Fund

Crown Land Silvaculture Fund

Cumberland Health Authority

Gaming Addiction Treatment Trust Fund

Guysborough Antigonish-Strait Health Authority

Habitat Conservation Fund

Halifax Regional School Board

Harbourside Commercial Park Inc.

Industrial Expansion Fund

Insured Prescription Drug Plan Trust Fund

Izaak Walton Killam Health Centre

Law Reform Commission

Mainstream 1992 Fund

Muggah Creek Remediation Fund

Nova Scotia Arts Council (inactive)

Nova Scotia Blueberry Institute Fund

Nova Scotia Business Incorporated

Nova Scotia Community College

   Nova Scotia Community College Foundation

Nova Scotia Coordinate Referencing System Trust Fund

Nova Scotia Crop and Livestock Insurance Commission

Nova Scotia E911 Cost Recovery Fund

Nova Scotia Environmental Trust

Nova Scotia Farm Loan Board

Nova Scotia Film Development Corporation

Nova Scotia Fisheries & Aquaculture Loan Board

Nova Scotia Gaming Foundation

Nova Scotia Government Acadian Bursary Program Fund

Nova Scotia Government Fund Limited

Nova Scotia Harness Racing Incorporated

Nova Scotia Health Research Foundation

Nova Scotia Housing Development Corporation

   Annapolis Valley Housing Authority

   Cape Breton Island Housing Authority

   Cobequid Housing Authority

   Eastern Mainland Housing Authority

   Metropolitan Regional Housing Authority

   South Shore Housing Authority

   Tri-County Housing Authority

Nova Scotia Innovation Corporation

   1402998 Nova Scotia Limited

   3039255 Nova Scotia Limited

   3087532 Nova Scotia Limited

Nova Scotia Lands Inc.

Nova Scotia Legal Aid Commission

Nova Scotia Market Development Initiative Fund

Nova Scotia Municipal Finance Corporation

Nova Scotia Nominee Program Fund

Nova Scotia Pension Agency

Nova Scotia Power Finance Corporation

Nova Scotia Primary Forest Products Marketing Board

Nova Scotia School Boards Association (2)

Nova Scotia School Insurance Exchange (3)

Nova Scotia School Insurance Program Association (3)

Nova Scotia Sportfish Habitat Fund

Nova Scotia Utility and Review Board

Off-Highway Vehicle Infrastructure Fund

P3 Schools Capital & Technology Refresh Fund (4)

(1)	— Includes all departments and public service units of the Nova Scotia Provincial Government
(2)	— Entity is a partnership controlled by the eight school boards.
(3)	— Entity is a partnership controlled by the eight school boards and the Community College
(4)	— This includes all refresh funds related to P3 schools.

23

Consolidated Financial Statements

Schedule 9

Government Reporting Entity (continued)
As at March 31, 2007

Governmental Units (continued)

(Consolidation Method)

Pengrowth Nova Scotia Energy Scholarship

Pictou County Health Authority

Provincial Drug Distribution Program

Public Archives of Nova Scotia

Public Debt Management Fund

Resource Recovery Fund Board Incorporated

Rockingham Terminal Incorporated (inactive)

Scotia Benefit Fund

Scotia Learning Technology Refresh Fund

Sherbrooke Restoration Commission

South Shore District Health Authority

South Shore Regional School Board

South West Nova District Health Authority

Species-at-risk Conservation Fund

Strait Regional School Board

Sustainable Forestry Fund

Sydney Environmental Resources Limited

Sydney Steel Corporation

Sydney Tar Ponds Agency

Sydney Utilities Limited

Sysco Decommissioning Fund

Trade Centre Limited

   Maritime Fall Fair Association

Tri-County Regional School Board

Upper Clements Family Theme Park Limited

Waterfront Development Corporation Limited

3052155 Nova Scotia Limited

3104102 Nova Scotia Limited

Government Business Enterprises
(Modified Equity Method)
 
Halifax-Dartmouth Bridge Commission
Highway 104 Western Alignment Corporation
Nova Scotia Gaming Corporation
   Atlantic Lottery Corporation (25% ownership)
   Interprovincial Lottery Corporation (10% ownership)
Nova Scotia Liquor Corporation
 
Government Partnership Arrangements
(Proportionate Consolidation Method)
Atlantic Provinces Special Education Authority
   (approximately 55% share)
Canada-Nova Scotia Offshore Petroleum Board (50% share)
Canadian Sports Centre Atlantic (approximately 8% share)
Council of Atlantic Premiers (approximately 45% share)

24

Notes to the Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

1. Financial Reporting and Accounting Policies

These financial statements are prepared in accordance with Canadian generally accepted accounting principles for the public sector, that for purposes of the province’s financial statements are represented by accounting recommendations of the Public Sector Accounting Board (PSAB) of the Canadian Institute of Chartered Accountants (CICA), supplemented where appropriate by other CICA and International Federation of Accountants accounting standards or pronouncements.

These consolidated financial statements have been prepared using the following significant accounting policies:

a) The Government Reporting Entity

The Government Reporting Entity is comprised of the Consolidated Fund, other Governmental Units, Government Business Enterprises and Government Partnership Arrangements. Governmental Units and Government Business Enterprises represent the entities that are controlled by the government. Control is defined as the power to govern the financial and operating policies of another organization with expected benefits or the risk of loss to the government from the other organization’s activities. Control exists regardless of whether the government chooses not to exercise its power to govern so long as it has the ability to govern. Control must exist at the financial statement date, without the need to amend legislation or agreements. Government Partnership Arrangements represent entities for which decision making and significant risks and benefits are shared with other parties outside of the Government Reporting Entity.

Trusts administered by the province are excluded from the reporting entity and are disclosed separately on the Statement of Financial Position for information purposes only.

b) Principles of Consolidation

A Governmental Unit is a government organization that is not a Government Business Enterprise. Governmental Units include government departments, public service votes, funds, agencies, service organizations, boards, government not-for-profit organizations and government business-type organizations. The accounts of Governmental Units are consolidated on a line-by-line basis after adjusting the accounting policies to be consistent with those described in Note 1 (c), with the exception of Tangible Capital Assets. Significant inter-organization accounts and transactions are eliminated.

A Government Business Enterprise is a self-sustaining organization that has the financial and operating authority to sell goods and services to individuals and non-government organizations as its principal activity and source of revenue. Government Business Enterprises have been accounted for on the modified equity basis which does not require any accounting policy adjustments. The net equity of the Government Business Enterprises is included in the Statement of Financial Position. The net income is shown as a separate item in the Statement of Operations.

25

Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

A Government Partnership is a contractual arrangement between the government and a party or parties outside the reporting entity. The partners have significant clearly defined common goals, make a financial investment in the partnership, share control of decision making, and share, on an equitable basis, the significant risks and benefits associated with the operations of the government partnership. Where significant, the government’s interest in partnerships is accounted for on the proportionate consolidation method.

A complete listing of the organizations within the Government Reporting Entity is provided in Schedule 9.

Financial results from fiscal year end to March 31, 2007, for Government Business Enterprises whose fiscal year ends are not March 31, were not significant to these consolidated financial statements so they have not been adjusted.

c) Significant Accounting Policies

Revenues

Revenues are recorded on the accrual basis. The main components of revenue are interest, various taxes and legislated levies. Revenues from Personal and Corporate Income Taxes, as well as Harmonized Sales Taxes are accrued in the year earned based upon estimates using statistical models. These revenues are recorded at the net amount estimated, after considering adjustments for tax credits and administrative costs related to the collection and processing performed by the federal government.

Government transfers are recognized as revenue in the period during which the transfer is authorized and any eligibility criteria are met. Transfers are recorded as deferred revenue if they are restricted for a stated purpose, such as a specific program or the purchase of tangible capital assets.

Expenses

Expenses are recorded on the accrual basis and are reported in more detail in Note 9 — Expenses By Object. Grants are recognized in the period during which the grant is authorized and any eligibility criteria are met. Provisions are made for probable losses on certain loans, investments, loan guarantees, accounts receivable, advances, forgivable loans and for contingent liabilities when it is likely that a liability exists and the amount can be reasonably determined. These provisions are updated as estimates are revised, at least annually.

Financial Assets

Cash and Short-term Investments are recorded at cost, which approximates market value. Investments are R-1 (low, mid, high) rated federal and provincial government bills or promissory notes, bankers’ acceptances, term deposits and commercial paper. Terms of investments are generally 1 to 90 days. The average interest rate is 4.29% at year-end.

Accounts Receivable and Advances are recorded at the principal amount less valuation allowances.

Inventories for Resale are held for sale in the ordinary course of operations and are recorded at the lower of cost and net realizable value.

Loans are recorded at cost less adjustments for concessionary assistance and any prolonged impairment in value. Concessionary assistance consists of subsidies provided by the province and is recognized as an expense at the date of issuance of the loan. Any loan write offs must be approved by the Governor-in-Council. Loans usually bear interest at approximate market rates and normally have fixed repayment schedules.

26

Notes to the Consolidated Financial Statements

Province of Nova Scotia

Notes to the Consolidated Financial Statements

As at March 31, 2007

Investments are recorded at cost less adjustments for concessionary assistance and any prolonged impairment in value. Concessionary assistance consists of subsidies provided by the province and is recognized as an expense at the date of issuance of the investment. Any write-down of an investment to reflect a loss in value is not reversed if there is a subsequent increase in value.

Liabilities

Bank Advances and Short-term Borrowings have initial maturities of one year or less and are recorded at cost that approximates market value. Short-term Borrowings had a weighted average interest rate of 4.17% at year-end on Canadian dollar borrowings.

Unmatured Debt consists of debentures and various loans in Canadian and foreign currencies and capital leases. Debt is recorded at par, net of sinking funds (including public debt management funds).

Hedge accounting is used when financial instruments form a hedging relationship, the relationship is highly effective and it is considered to be consistent with the province’s financial risk management goals.

Sinking Fund and Public Debt Retirement Fund investments are recorded at cost and consist primarily of debentures of the Province of Nova Scotia, other provincial governments and the Government of Canada. Premiums and discounts on sinking funds are deferred and amortized over the life of the investment. Amortization and realized gains and losses for premiums and discounts relating to sinking fund balances and installments are netted against sinking fund earnings.

Unamortized Foreign Exchange Translation Gains and Losses result when debentures payable in foreign currencies, and sinking funds invested in foreign currencies are translated into Canadian dollars at the rate of exchange in effect at March 31 and upon entering into derivative contracts. Foreign exchange gains and losses on the translation of foreign currency are amortized on a straight-line basis over the remaining term of the related monetary issue.

Premiums and discounts, as well as underwriting commissions relating to the issuance of debentures, are deferred and amortized over the term of the related debt. Amortization and realized foreign exchange gains and losses, premiums and discounts relating to debt balances, serial retirements, sinking fund balances and installments are charged to debt servicing costs except as noted above.

Pension, Retirement and Other Obligations include various employee future benefit plans. Pension liabilities for defined benefit plans are calculated using the projected benefit actuarial method using accounting assumptions that reflect the province’s best estimates of performance over the long-term. The projected benefit actuarial method attributes the estimated cost of retirement benefits to the periods of employee service. The net pension liability represents accrued pension benefits less the market related value of pension assets (if applicable) and the balance of unamortized experience gains and losses. The market related values are determined in a rational and systematic manner so as to recognize asset market value gains and losses over a five-year period. The pension benefit plan for the majority of health sector employees is offered by a multi-employer plan administrator and is not sponsored by the province. Employer contributions to this plan are expensed in the period paid. The accrued benefit asset (liability) of this plan is not recognized in these financial statements.

27

Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

Net Direct Debt

Net Direct Debt represents the direct liabilities of the province less financial assets and unamortized foreign exchange translation gains and losses and premiums and discounts on outstanding debenture issues.

Non-Financial Assets

Tangible Capital Assets have useful lives extending beyond the accounting period, are held for use in the production and supply of goods and services and are not intended for sale in the ordinary course of operations. Tangible capital assets are recorded at gross historical cost (or estimated cost when the actual cost is unknown) and include all costs directly attributable to the acquisition, construction, development and installation of the tangible capital asset, except interest. Tangible Capital Assets include land, buildings, major equipment and software, vehicles, ferries, roads, highways, and bridges. Tangible capital assets do not include intangibles or assets acquired by right, such as forests, water and mineral resources or works of art and historical treasures. Tangible capital assets are amortized to expense over the useful lives of the assets. The amortization methods and rates selected by entities other than the Consolidated Fund are not adjusted to the methods and rates used by the Consolidated Fund.

Inventories of Supplies are held for consumption or use by the province in the course of its operations. All entities record inventory at the lower of cost and net realizable value.

Prepaid Expenses are cash disbursements for goods or services, other than Tangible Capital Assets and Inventories of Supplies, of which some or all will provide economic benefits in one or more future periods. The prepaid amount is recognized as an expense in the year the good or service is used or consumed.

Accumulated Deficits

Accumulated Deficits represent the direct liabilities of the province less financial assets, non-financial assets and unamortized foreign exchange translation gains and losses and premiums and discounts on outstanding debenture issues. This represents the accumulated balance of net surpluses/deficits arising from the operations of the province.

d) Measurement Uncertainty

Uncertainty in the determination of the amount at which an item is recorded in the financial statements is known as measurement uncertainty. Uncertainty exists whenever estimates are used because it is reasonably possible that there could be a material difference between the recognized amount and another reasonably possible amount.

Measurement uncertainty exists in these financial statements in the accruals for such items as pension, retirement and other obligations, environmental remediation obligations, federal, and provincial source revenues. The nature of the uncertainty in the accruals for pension, retirement and other obligations arises because actual results may differ significantly from the province’s various assumptions about plan members and economic conditions in the marketplace. Uncertainty exists for environmental remediation obligations because the actual extent of remediation activities required may differ significantly based on the actual extent of site contamination and the chosen remediation process. Uncertainty related to Sales and Income Taxes, petroleum royalties, CHT and CST arises because of the possible differences between the estimated and actual economic growth and other assumptions used in statistical models to accrue these revenues.

28

Notes to the Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

2. Accounting Changes

Accounting changes were made during the year that have increased (decreased) the Provincial Surplus, Net Direct Debt and Accumulated Deficits as follows:

2007

2006

Net

Net

Direct

Accumulated

Direct

Accumulated

Provincial

Debt

Deficits

Provincial

Debt

Deficits

($ millions)

Surplus

April 1, 2006

April 1, 2006

Surplus

April 1, 2005

April 1, 2005

TCA

18.6

0.0

(21.0

)

10.6

0.0

(10.4

)

TCA — Tangible Capital Assets

In accordance with PSAB, a policy change was implemented to record tangible capital assets at gross cost. This policy change was recorded on a retroactive basis and the impacts are shown in the table above.

District Health Authorities — Supplementary Pensions

Supplementary pension arrangements for certain employees of the District Health Authorities which were recorded as accounts payable have been restated to pension, retirement and other obligations and accounted for using pension accounting. This change was recorded on a retroactive basis and the prior period impact of $56 thousand does not appear in the table due to rounding.

3. Restricted Cash and Short-Term Investments

As at March 31, 2007 restricted cash and short-term investments of $84.4 million (2006 — $69.9 million) have been designated for restricted purposes by parties external to the province. Restricted cash includes $43.6 million for future housing expenditures from the Nova Scotia Housing Development Corporation; $22.4 million from Capital District Health Authority for the Centre for Clinical Research and other purposes; $8.5 million for gas market development from the Nova Scotia Market Development Initiative; and $9.9 million for various other purposes.

29

Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

4. Deferred Revenue

Receipts are recorded as deferred revenue if they are restricted by external parties for a stated purpose, such as a specific program or the purchase of tangible capital assets. Deferred revenue is recognized into revenue over time as the recognition criteria are achieved. The balance includes the following components:

($ thousands)

	2006-07		2005-06
Offshore Accord		715,479		772,900
C-48 Federal Trust Agreements		82,957		—
Office of Immigration — Nova Scotia Nominee Program		72,092		—
Wait Times Reduction Fund		51,445		86,111
Nova Scotia Housing Development Corporation’s Social Housing Agreement		44,038		33,448
Capital District Health Authority’s Capital and Research Funds		43,197		23,727
Early Learning Child Care funds		42,176		24,588
Miscellaneous Amounts		92,252		91,044
Total Deferred Revenue		1,143,636		1,031,818

5. Derivative Financial Instruments

The province is a party to financial instruments with off-balance sheet risk, either to hedge against the risks associated with fluctuations in foreign currency exchange rates or to manage risks associated with interest rate fluctuations. Foreign currency contracts are used to convert the liability for foreign currency borrowing and associated costs into Canadian or US dollars. Interest rate contracts are used to vary the amounts and periods for which interest rates on financial instruments are fixed or floating. Foreign exchange contracts include forward and swap agreements. Interest rate contracts include swap agreements and options on swaps.

The province’s credit policy is that it only executes derivative transactions with counter parties with an A rating or better.

The province had the following interest and currency swap contracts outstanding at March 31, 2007:

# of Swaps	Currency	Notional Principal		Term Remaining		Mark to Market*
		($thousands)		(years)		($millions)
158	CDN$		1,899,480	42 days to 24			(17.5	)
17	US$		2,350,000		5 to 15		(379.2	)
2	UK		83,250		4 to 12		7.5
2	Euro		90,000	272 days to 3			6.8

* Mark to Market is an indication of the swap’s market value as at March 31, 2007. This represents the estimated realizable gain (loss), and is equivalent to the present value of future savings (losses) based on market conditions as at March 31, 2007.

30

Notes to the Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

The province has executed several currency swap contracts/forward agreements to convert foreign denominated debt into Canadian or US denominated debt. The mark to market of these swap/contracts are included in the previous table, and the currency swap contracts are as follows:

Termination	Original	Original		Current	Current
Date	Currency	Principal		Currency	Principal
		($ thousands)			($ thousands)
SWAPS:
October 31, 2011	UK		23,250	CDN$		56,283
April 18, 2019	UK		60,000	US$		110,040
February 27, 2012	US$		500,000	CDN$		795,000
March 15, 2016	US$		150,000	CDN$		205,725
January 26, 2017	US$		500,000	CDN$		586,500
March 1, 2020	US$		300,000	CDN$		409,200
May1, 2021	US$		300,000	CDN$		312,002
April 1, 2022	US$		300,000	CDN$		379,517
July 29, 2022	US$		218,376	CDN$		239,711
July 30, 2022	US$		81,624	CDN$		89,599
December 28, 2007	Euro		40,000	CDN$		56,120
February 24, 2010	Euro		50,000	CDN$		72,235

At March 31, 2007 the province had entered 5 forward agreements to convert future interest payments on foreign debt into Canadian dollars as follows:

Termination	Original	Original		Current	Current
Date	Currency	Principal		Currency	Principal
		($ thousands)			($ thousands)
April 18, 2007 to August 1, 2007	US$		45,794	CDN$		51,371

6. Federal Equalization Repayable Loan

The province received an equalization repayable loan from the Federal Government in March 2005 in the amount of $120.3 million. The loan bears no interest and is being repaid over 10 years, with bi-monthly deductions of $501,342 to commence in April 2006. As of March 31, 2007 the balance of the loan is $108,289,792.

31

Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

7.	Pension, Retirement and Other Obligations
a)	Description of Obligations
	The province offers a variety of pension, other retirement, post-employment and special termination benefits. The province is responsible for adequately funding most of the plans. Except as otherwise noted, the cost of benefits are recognized in the periods the employee provides service. For benefits that do not vest or accumulate, a liability is recognized when an event that obligates the province to pay benefits occurs. The significant plans are detailed as follows:

i) Pension Benefit Plans

The province sponsors two funded pension plans, the Public Service Superannuation Plan (PSSP) and the Nova Scotia Teachers’ Pension Plan (TPP). Both plans are defined benefit plans with plan assets primarily composed of Canadian and foreign equities, government and corporate bonds, debentures, secured mortgages and real estate. The plans are jointly funded with contributions from employees being matched by the province. Benefits paid upon retirement are based on an employee’s length of service, rate of pay and inflation adjustments.

On April 1, 2006, the Minister of Finance transferred responsibility for the governance of the Nova Scotia Teachers’ Pension Fund to the Teachers’ Pension Plan Trustee Inc., (TPPTI). The TPPTI is a body corporate comprised of nine board members — four nominated by the Nova Scotia Teachers’ Union, four nominated by the province and one Chair agreed to by both parties. As a result of this transfer, the province and Union agreed to share all surpluses and deficits of the plan equally. The province accounts for one-half of all components of the accrued benefit liability associated with the plan in its financial statements. In addition, the province recognizes one-half of components associated with the net benefit expense (recovery) associated with this plan. As of March 31, 2007, the total accrued benefit liability associated with the plan was $64.1 million.

The province has several unfunded defined pension plans. The majority of these plans do not require contributions from employees. Benefits paid upon retirement are based on an employee’s length of service, rate of pay and inflation adjustments.

Employees in the health sector are members of a multi-employer defined benefit pension plan. As the province does not sponsor this plan, the annual net benefit plan expense is the amount of required contributions provided for employees’ services rendered during the year. The accrued benefit asset (liability) of this plan is not recognized in these financial statements. The most recent actuarial valuation was performed on December 31, 2005 and showed a funding excess for the entire plan of $44 million. An extrapolation to December 31, 2006, was performed, which indicated a funding surplus of $69.2 million.

ii) Other Retirement Benefit Plans

The province sponsors two other retirement benefit plans: retirement allowances and retirement health plan benefits. These plans are not funded. Benefits paid upon retirement for retirement allowances are based on an employee’s length of service and rate of pay. Retirement health plan benefits vary depending on the collective agreements negotiated with each group. The province pays 65% and 100% of the cost of retirement health plan benefits for the PSSP and TPP retirees respectively.

iii) Post-Employment Benefits

The province offers two significant post-employment benefit plans: Self Insured Workers’ Compensation and Long-Term Disability. The amount recorded in these financial statements represents the actual amount of benefits paid during the year plus the actuarial estimate of future payments, based on claims ongoing at year-end. For the Long-Term Disability plan, the obligation is offset by the market related value of plan assets.

32

Notes to the Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

iv) Special Termination Benefits

The province has offered early retirement incentive programs to members of the PSSP and TPP at various times commencing in 1986 and 1994 respectively. Qualified members were offered additional years of pensionable service if they elected to retire. The cost of these benefits was accrued in the year the employee accepted the early retirement option.

b) Summary of Activity in Defined Benefit Plans

Accrued Benefit Liability
($ thousands)

			2006
	2007			(as restated)
Pension Benefit Plans		215,741		111,416
Other Benefit Plans		1,220,640		1,192,913
		1,436,381		1,304,329

Activity During the Year
($ thousands)

	Pension Benefit Plans
				2006			Other Benefit Plans
	2007				(as restated)			2007		2006
Projected benefit obligation, beginning of year		8,627,438			8,412,164			1,206,972		1,160,838
Reduction of obligation on move to joint trusteeship (see a i)		(2,286,529	)		—			—		—
Current benefit cost		179,557			196,453			54,189		52,477
Interest cost		449,916			616,694			68,411		69,709
Actuarial (gains) losses		308,291			31,278			(72,857	)	9,926
Benefit payments		(379,543	)		(479,158	)		(92,885	)	(86,910	)
Other		3,666			2,498			2,089		—
Plan amendments		—			(152,491	)		30,004		932
Projected benefit obligation, end of year		6,902,796			8,627,438			1,195,923		1,206,972
Market related value of plan assets, beginning of year		7,708,044			7,313,800			54,711		45,217
Reduction of assets on move to joint trusteeship (see a i)		(2,152,887	)		—			—		—
Expected return on plan assets		388,077			557,467			3,916		3,398
Actuarial gains (losses)		26,843			(72,646	)		(208	)	(1,458	)
Benefit payments		(379,543	)		(479,061	)		(92,885	)	(86,910	)
Other		4,588			2,498			(403	)	(529	)
Employer contributions		109,367			275,397			92,152		85,484
Employee contributions		87,420			110,589			10,505		9,509
Market related value of plan assets, end of year		5,791,909			7,708,044			67,788		54,711
Funded status, end of year		(1,110,887	)		(919,394	)		(1,128,135	)	(1,152,261	)
Unamortized net actuarial (gains) losses		895,146			807,978			(92,505	)	(40,652	)
Accrued benefit liability, end of year		(215,741	)		(111,416	)		(1,220,640	)	(1,192,913	)

33

Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

c)	Actuarial Assumptions
	The table below shows significant weighted-average assumptions used to measure pension and other benefit plan obligations.

	Pension Benefits						Other Benefits
	2007			2006			2007			2006
Long-term inflation rates		2.5	%		2.75	%		2.75	%		2.75	%
Expected real rate of return on plan assets		4.5	%		4.75	%		—			—
Rate of compensation increase		2.75	%	3.25% to			2.75% to			3.25% to
	to 5.5%				6 % +		5.5% +			6.0% +
	+ merit			merit			merit			merit
Discount Rate — Main plans		7.11	%		7.63	%		5.7	%		5.95	%
Other		—			—		5.7% to			5.95% to
								6.7%			7.12%

Other assumptions used were:

6.5% annual rate increase in the cost per person of covered healthcare benefits for 2006-07, decreasing at 0.25% per annum to an ultimate rate of 4.5% per annum.

11% annual rate increase in the cost per person of covered prescription drugs for 2006-07, decreasing at 1% per annum to an ultimate rate of 4.5% per annum.

Actuarial assumptions are reviewed and assessed on a regular basis to ensure that the accounting assumptions take into account various changing conditions and reflect the province’s best estimate of performance over the long-term.

34

Notes to the Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

d)	Other Disclosure
	The net unamortized actuarial gains (losses) are amortized on a straight-line basis over the expected average remaining service life (EARSL) of the related employee groups ranging from 6 years to 16 years (weighted-average EARSL is 14 years).
	During the year the weighted average actual rate of return on plan assets was 10.4% (2006 — 14.0%). The total market value of plan assets is $8.7 billion (2006 — $8.1 billion) at March 31, 2007.
	The most recent actuarial valuations performed for most of the benefit plans was at December 31, 2005 with the exception of certain other retirement benefit plans that were performed on December 31, 2004 and the post-employment benefit plans that are performed annually at March 31.

e)	Net Benefit Plans Expense (Recovery)
	The table below shows the components of the net benefit plans expense (recovery).

($ thousands)

	Pension Benefits
				2006			Other Benefits
	2007				(as restated)			2007		2006
Current benefit cost		179,557			196,453			54,189		52,477
Employee contributions		(87,915	)		(110,589	)		(10,529	)	(9,509	)
Employer contributions*		29,658			—			—		—
Plan amendments		—			(152,491	)		30,004		932
Amortization of net actuarial (gains) losses		59,776			46,609			(8,087	)	(2,279	)
Recognition of actuarial losses on plan amendment		—			152,491			(12,709	)	—
Other		(35	)		(6	)		2,003		1,583
Decrease in valuation allowance		—			—			—		—
Interest cost		449,916			616,694			68,411		69,709
Expected return on plan assets		(388,077	)		(557,467	)		(3,916	)	(3,398	)
Employer contributions to multi-employer plan		55,439			47,866			—		—
Net benefit plans expense (recovery)		298,319			239,560			119,366		109,515

* This represents one-half of the employer contributions made by PNS to the TPP. Included in the figures above for 2007, are one-half of all transactions associated with TPP to reflect the province’s share of this plan.

35

Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

8. Trust Funds Under Administration

Trust fund assets administered by the province (before giving consideration to actuarial adjustments) are:

($ thousands)

			2006
	2007		(as restated)
Public Service Superannuation Fund (1)		3,817,047		3,541,764
Nova Scotia Teachers’ Pension Fund (1), (4)		4,758,444		4,384,443
Sydney Steel Corporation Superannuation Plan (1), (2)		2,835		8,431
Nova Scotia Public Service Long Term Disability Plan (1), (4)		68,611		52,543
Nova Scotia Credit Union Deposit Insurance Corporation (1), (4)		15,354		13,841
Public Trustee (1)		34,178		30,777
Miscellaneous Trusts (3)		25,659		23,744
Total Trust Funds Under Administration		8,722,128		8,055,543

(1)	See Public Accounts Volume II for full financial statements of these funds.
(2)	Administration of the assets of Sydney Steel Corporation Superannuation Fund was assumed during fiscal 2001.
(3)	Miscellaneous trusts include a large number of relatively small funds.
(4)	These represent trusts with December 31 year ends. Trust asset balances at March 31 did not differ significantly.

9. Expenses by Object

($ thousands)

			2006
	2007		(as restated)
Grant and Subsidies		2,414,426		2,287,771
Salaries and Employee Benefits		2,768,338		2,541,784
Operating Goods and Services		1,434,972		1,325,361
Professional Services		237,813		207,862
Amortization		241,874		216,040
Debt Servicing Costs		958,744		1,017,779
Other		54,456		37,566
Total Expenses		8,110,623		7,634,163

36

Notes to the Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

10. Debt Servicing Costs

($ thousands)

			2006
	2007			(as restated)
CDN$ Denominated Debt	683,310			630,736
US$ Denominated Debt	100,029			178,546
Pension, Retirement and Other Obligations	126,337			125,495
Capital Leases	26,482			27,519
Other Debt	27,877			41,467
Premium / Discount Amortization	2,129			3,735
Foreign Exchange	(8,312	)		9,499
Miscellaneous	892			782
Total Debt Servicing Costs	958,744			1,017,779

Debt servicing costs for Government Business Enterprises was $20.4 million for the year ended March 31, 2007 ($21.3 million for the year ended March 31, 2006).

11. Cash-Flow — Net Change in Other Items

($ thousands)

			2006
	2007			(as restated)
Change in Receivables from Government Business Enterprises	(39,150	)		(15,412	)
Change in Receivables and Advances	47,889			(67,182	)
Change in Accounts Payable and Other Short-term Borrowings	(106,898	)		(131,907	)
Change in Inventory for Resale	86			52
Change in Inventory of Supplies	866			(1,506	)
Change in Prepaid Expenses	(548	)		(1,202	)
Change in Deferred Revenue	111,818			785,559
Change in Accrued Interest	(4,177	)		(24,645	)
Change in Pension, Retirement and Other Obligations	132,052			(60,815	)
Total Net Change in Other Items	141,938			482,942

37

Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

12. Contingencies and Contractual Obligations

a) Contingent Liabilities

i) Environmental Sites

Various provincially owned sites throughout the province are considered environmental or contaminated sites. Studies are ongoing to assess the nature and extent of damage to develop remediation plans. Provisions for these costs are recorded in these financial statements when it is determined a liability exists and a reasonable estimate of the remediation costs can be made. With the exception of remediation costs noted in the following paragraphs, no further provisions have been recognized in these financial statements.

Engineering and environmental studies have generated estimates for the cost of remediation of the Sydney Steel Corporation (Sysco) and adjacent sites as well as the Sydney Tar Ponds site. As a result, the province recorded liabilities totaling $318.5 million in 2000 for environmental site clean up. At March 31, 2007, $276.3 million (2006 — $227.6 million) remains unspent. During the year it was determined that $58.8 million could be returned to the environmental site clean-up provision due to better than expected recoveries on asset and scrap sales since the closure of Sysco. The provision will continue to be utilized for future decommissioning, demolition and remediation of Sysco’s and adjacent sites, including the Sydney Tar Ponds site. Based on currently available information, the provision, in aggregate, appears to be sufficient to cover the estimated costs to remediate these sites.

Other remediation liabilities amounting to $12.5 million (2006 — $14.9 million) have been recognized in these financial statements.

ii) Lawsuits

The province’s losses for any lawsuits pending cannot be determined due to uncertainty of the trial outcomes.

iii) Other Contingent Liabilities

The province also has contingent liabilities in the form of indemnities. The province’s potential liability, if any, cannot be determined at this time.

b)	Contingent Gains
	The Province of Nova Scotia may receive funds in the future from recoveries of various types of claims paid out and other agreements pending the occurrence of certain events. Recoveries are recorded in the year the contingent events occur.

38

Notes to the Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statements
As at March 31, 2007

c) Contractual Obligations

i) Contractual Obligations

Contractual obligations outstanding at March 31, 2007 total $1,552.5 million; comprised of $1,356.8 million for the Consolidated Fund, $182.9 million for other Government Units and $12.8 million for Government Business Enterprises. Included are contractual obligations of $109.7 million by Nova Scotia Business Incorporated for projects approved under its various programs, $246.3 million by the Department of Education for university assistance, $374.0 million by the Department of Education for P3 School maintenance agreements, and $185.4 million by the Department of Health for the management of the ground ambulance fleet.

In addition to the contractual obligations noted above, in 1992 the Department of Justice entered into a 20-year contract with the RCMP for policing services, including services paid by the municipalities under the Service Exchange Agreement. Costs are negotiated each year based on required policing services. The net estimated expense for the province for 2008 is $21.2 million.

ii) Leases

As at March 31, 2007, the province was contractually obligated under various operating leases. Future minimum annual lease payments are as follows:

($ thousands)

			Government		Total
	Governmental		Business		Lease
Fiscal Year	Units		Enterprises		Payments
2007-2008		50,791		8,141		58,932
2008-2009		34,629		7,636		42,265
2009-2010		28,489		6,849		35,338
2010-2011		20,873		6,188		27,061
2011-2012		17,509		6,035		23,544
2013-2017		24,724		—		24,724
2018-2022		8,511		—		8,511
2023-2027		507		—		507
		186,033		34,849		220,882

39

Consolidated Financial Statements

Province of Nova Scotia
Notes to the Consolidated Financial Statement
As at March 31, 2007

13. Comparative Figures

To conform with the current year’s presentation, certain comparative figures for the prior year have been restated as follows:

a)	Accounting Changes
	As described in Note 2, there have been some retroactive restatements of figures in accordance with changes made during the year.

b)	Presentation
	Certain of the prior year’s numbers have been restated to conform to the presentation format adopted in the current year.

14. Related Party Transactions

Included in these consolidated financial statements are immaterial transactions with various provincial crown corporations, agencies, boards and commissions. Significant related party transactions have been offset and eliminated for purposes of consolidated reporting. Parties are deemed to be related to the Consolidated Fund due to common control or ownership by the Province of Nova Scotia.

The most significant unadjusted related party transactions are described in Schedule 6 — Government Business Enterprises.

40