Nova Scotia's books remain in the black with a slight increase in the forecasted surplus but the province's finance minister said Tuesday that growing the economy is still a challenge.

The fiscal update for September, released by Finance Minister Randy Delorey, shows a minor improvement in the province's net position, up $1.8 million to $18.9 million.

When the budget was tabled in the spring, that number was $17.1 million.

Department spending increases due to federal programs

The total surplus stands at $129.2 million. However, the province has already said $110.3 million of that is going on the debt as a one-time payment it received related to the Nova Centre.

Expenses and revenue are both up slightly from the budget. The province attributes the increased expenses to new projects cost-shared with the federal government.

Department expenses are up $77.5 million overall from the budget. Part of that comes from assistance to universities, including $19.7 million to match federal contributions for upgrades to the institutions. Most of that money is recoverable.

Water and transit projects, forest fires contribute to new spending

The other major increase is at the Department of Municipal Affairs — $46.1 million — related to water and transit projects spearheaded by Ottawa. About $21 million of that overage is recoverable.

The Labour Department is over budget by $7.5 million due mainly to labour market development agreements and the Natural Resources Department is over budget by $3.5 million because of the wildfires they had to fight in August.

The Business Department's spending is up by $3 million to help cover the cost of converting the former Canadian Coast Guard base in Dartmouth to an ocean technology research centre.

Balanced budget not a certainty

Delorey said the numbers show his government's efforts to restore balance to the province's books are working. But the Liberals' promise of a balanced budget is far from a certainty.

There are two variables: the province has yet to get its bill for helping fight wildfires in Alberta; and the prior year adjustment which will come in the December fiscal update. The latter, which can be positive or negative, is calculated when previously estimated fiscal items are closed with final figures.

Delorey, however, wouldn't speculate if the government would deviate from its plan to balance the budget.

"At this point in time, this fiscal update, the best information we have has us on a positive course," he said. "We're focused on continuing to execute and we're confident that by doing so we will continue to achieve the results we're forecasting."

'Improved for whom?'

Opposition politicians argued that focus is either in the wrong place, or not doing enough to improve things.

Tory finance critic Tim Houston says the government's plan isn't doing enough to create growth in the economy. (CBC)

Tim Houston, the Progressive Conservative finance critic, noted soft projections for employment and the labour force as well as reduced expectations for the HST — meaning people aren't spending as much as projected.

"The real story is that people don't have money to spend because they don't have jobs."

While he didn't come out and say it, Houston strongly hinted the government should reduce taxes.

NDP Leader Gary Burrill says the government's focus on a balanced budget means the people who need help the most aren't getting it. (CBC)

NDP Leader Gary Burrill said the government's continued focus on balance isn't helping people who most need help. He pointed to cuts to long-term care budgets, increased tuition fees and more people using food banks.

"The question that all of Nova Scotia needs to ask when the minister of finance speaks about our improved fiscal position is very plain: just, improved for whom?"