Nova Scotia is heading for a higher than anticipated deficit this year but the new Minister of Finance Randy Delorey isn't hitting the panic button.

"At this point in time we're not implementing any mid-year mitigations," he said.

In recent years, the governing Liberals had ordered spending cuts in order to deal with larger than expected shortfalls.

The current deficit target is $122.5 million, $25 million more than when former Finance Minister Diana Whalen tabled the budget.

Delorey blames the growing deficit on a drop in revenue, especially provincial taxes and a "slight " increase in spending by four departments.

Overall provincial revenues are down $36.6 million, departmental spending is up $14.6 million.

An increase in other revenues offsets some of those higher costs, most notably an increase in gambling revenue, as a result of government's decision to loosen VLT restrictions.

But an even larger deficit may be looming.

That's because the province has not changed its estimate on the cost of the province's now defunct Film Tax Credit.

The budget still shows a $24 million cost, despite the fact the province has already processed $40 million worth of tax credit applications, with another $20 million possible.

When the Liberals announced their decision to kill the tax credit and replace it with an incentive fund, dozens of filmmakers rushed their projects and the paperwork necessary to meet the July 1 deadline. (Jean Laroche/CBC)

When the Liberals announced their decision to kill the tax credit and replace it with an incentive fund, dozens of filmmakers rushed their projects and the paperwork necessary to meet the July 1 deadline.

Delorey told reporters his department couldn't change the original cost estimate until it knew for sure how many projects would actually qualify and in what year those expenses would be booked.

As for not anticipating a flood of new applications, Delorey said the department couldn't say.

"Until there's applications before us we don't really know what's in the pipe. I think that's one of the advantages of moving to a fund-based program."

The provincial government has only committed $10 million to the new Nova Scotia Film and Television Production Incentive Fund, administered by Nova Scotia Business Inc.

'Big surprise'

Maureen MacDonald, interim NDP leader, said the province should have known ending the tax credit would create a rush.

"Big surprise," she said. "We've known all along this government had no idea what the film industry, how it worked, what the impact would be of a very reckless decision that was made without consultation."

PC Leader Jamie Baillie agreed.

"I think they need to take a second hard look at how they devastated a growing young industry in the film industry."

As for the overall state of the province's finances, Baillie saw the latest figures as proof the governing liberals are off track.

"I hear from people every day who are telling me how tough it is out there and the budget reflects that," he said.

"There's been a lot of talk about cuts but none about creating jobs and growing the economy. In fact the actions the government has taken include devastating the film industry, banning new ways of creating jobs in onshore gas and now their numbers are starting to reflect that."

Baillie wanted the government to cut spending but MacDonald said that wasn't the way to go.

"Continuing on the road of austerity is a recipe for disaster,"she said. "People will be hurt and our economy will be hurt. You cannot grow an economy by cutting jobs whether that's in the public sector or in incentives to give the private sector engaged."