Nova Scotia’s enormous debt load has attracted the attention — and the ire — of the province’s auditor general. The situation, contends Jacques Lapointe, goes beyond untenable. It is unethical.

The issue of morality has offended New Democratic Party backbencher Howard Epstein, who stepped outside government ranks to publicly admonish the auditor general. The finance minister, for his part, offered both a gentle rebuke and an understanding of the seriousness of the situation.

At present, the province’s net debt is $12.8 billion and costs $861 million a year in interest to service. That translates into 9¢ on every dollar the province takes in — a level that is higher than most other provinces. Quite simply, Lapointe said in a statement to the media, governments have spent more money than they have taken in. Said Lapointe: “There are critical accountability problems as well as ethical questions inherent in this method of financing government spending.”

Lapointe also raised ethics in his recent 81-page report. “Is it right for Nova Scotians to expect, and receive, government services that they as a group do not completely pay for, deferring part of the payment to future generations?” he asked.

Epstein took exception to the auditor general’s foray into ethics. “What you’ve treated us to is your personal views on government debt,” Epstein said during the auditor general’s presentation to the public accounts committee. “I have to say to you that I find it highly problematic, not just that you’ve embarked upon this discussion but the way in which you have done it. I have found it not to be balanced, not to be sufficiently detailed, and not sufficiently researched.”

Finance Minister Graham Steele is less critical of Lapointe’s remarks although he, too, took issue with the auditor general’s remarks. “I do think the word chosen by the auditor general is probably an unfortunate choice of words,” he said during a news conference.

Regardless of terminology no one doubts the seriousness of the situation, including the finance minister. “The issue raised by the auditor general … is a real issue,” Steele told The Chronicle Herald.

“I’ve been going around the province the last couple of years underlining the fact that debt matters. It matters to folks because almost $1 billion a year of our $9-billion budget is spent on interest, and that’s just far too much for a province of this size,” he noted.

The government hopes good news on a number of economic fronts  will start to transform the red ink into black. The $25-billion contract to build combat vessels for the Canadian military that Irving Shipbuilding Inc. has landed should boost the economy for decades. The government is also counting on greater royalty revenue from offshore gas production this fiscal year. It’s already predicting a jump of roughly 30% over its previous forecast for that sector.

But something clearly has to be done now to address the debt issue moving forward. As the auditor general noted in his report, “We are all poorer today because of government spending in the past.”  IE