Nova Scotia's auditor general estimates the province owes close to $2-billion in health benefits related to retirees, retirement bonuses, accumulated sick leave, workers' compensation and long term disability costs.

The lion's share of those costs is $1.1 billion related to retirement health benefits for public sector employees such as teachers, health workers and public servants.

Retirement allowances or bonuses make up the next largest cost at $373 million, while sick leave plan costs are the third highest at $202 million.

Auditors note that those costs have "increased substantially over the past five years." Retirement health benefits, for example, rose 43 per cent between 2009 and 2014. Retiring allowances rose 20 per cent in the same time frame.

Retired teachers are costing the most in health benefits. That's because the province pays 100 per cent of the cost of insurance premiums for those teachers. According to auditors that works out to $20,846 per teacher.

Generally speaking, public servants and health workers pay 35 per cent of their insurance premiums.

Health employees are costliest when it comes to retiring allowances or long service awards. Public servants and health employees receive one week's pay for every year of service to a maximum of six months salary.

This is a lump sum payment paid at retirement, on top of pensions.

By comparison, teachers are entitled to one percent of annual salary for every year of service to a maximum of 30 percent.

When it comes to sick leave, teachers and health workers are allowed to accumulate sick days while public servants are not.

Teachers can accumulate up to 195 days. Health workers can accrue up to 150 days. Civil servants have up to 18 days a year in sick days, but anything they do not use is lost at the end of each year.

Auditor General Michael Pickup says the government needs to start planning to pay for this unfunded liability to the province.

Currently any extra costs associated with retirement benefits or accumulated sick leaves are paid on an ongoing basis, which eventually drives up the debt of the province.

The auditor general also raised concerns Wednesday about Nova Scotia's debt and reliance on federal transfers, saying it points to a province "in poor financial shape."

"Look at the net debt per capita. It's $15,659 per Nova Scotian," he said. "It was $13,847 in 2010, so my comment would be that eventually somebody has to pay for this. Nobody is going to ride into town with a big check to cover all of this."