Nova Scotia tabled its 2026-27 budget, entitled Defending Nova Scotia, today. The lack of significant evidence-based investment at the level needed in income supports, affordable housing, and public child care, combined with cuts to public sector jobs and services, risks making life more expensive for Nova Scotians.
The suggestion that the government can make cuts without Nova Scotians feeling the impact is not realistic; the government is Nova Scotians providing services, caring for those who are ill, caring for our parents and grandparents, educating our children, creating art, protecting and sharing our history, staffing our libraries, and supporting community members across the province to have a better quality of life. They are planning for five per cent cuts in the civil service, and three per cent cuts for the broader public sector each year for the next four years; cuts do not create prosperity, and their analysis of the lack of revenue growth that will come from this shows the effect over time.
Public services are social and economic infrastructure. When they are weakened:
- families pay more out of pocket;
- local economies lose good jobs;
- pressures increase in health care and housing, and;
- long-term costs to government rise.
Fiscal Health Reality Check
Nova Scotia is facing a significant deficit, but the province remains in relatively strong fiscal health, if they continue to invest in what people need. For example, the additional $3 billion added to debt for long-term care homes that we do not own, is not the kind of investment that is needed. Too many of these long-term care homes are for-profit, and could be at risk of being sold for the benefit of multinational corporations, while we add their loans to the public debt.
- Debt-to-GDP is stable; the province’s debt-to-GDP ratio, at 39.4 per cent this year, is still on the lower end of where it has been over three decades and manageable, and has included necessary investments in health infrastructure and public housing.
- Debt payments are manageable; much of the debt is locked in at low interest rates, and debt servicing costs have fallen over the past decade. Nova Scotia’s debt servicing costs as a percentage of GDP are still low looking over 30 years.
The issue is not that the province has run out of fiscal room. The problem is how the government chooses to respond. The Province has the fiscal capacity to make careful, targeted investments that have a return on investment.
History shows that cutting public employment and core programs during periods of pressure often slows economic activity and increases inequality.
The real danger is not the debt, it is responding to a temporary fiscal pressure with permanent cuts that weaken the province’s economic foundation.
Resource Extraction Growth Strategy Warning
The government is also signalling a greater reliance on natural resource expansion as the “path to prosperity.”
Resource development can play a role in the economy, but it cannot substitute for the broad-based growth that comes from investing in housing, care, education, and community infrastructure. Jurisdictions that rely heavily on resource extraction often experience greater volatility and less inclusive growth. The risks to the environment and to our climate are too costly.
A More Balanced and Sustainable Path Not Taken?
The Nova Scotia Alternative Budget 2026 shows a more balanced and sustainable path.
As outlined in the NSAB, instead of austerity, the government could:
- improve tax fairness;
- invest in the caring economy;
- strengthen local economic development;
- reduce household costs, and;
- support stable long-term green growth.
By improving tax fairness and investing in the caring economy, whether in child care, housing, health care, transit, and education, Nova Scotia can strengthen affordability while supporting economic growth.
In preparing this provincial budget, the choice facing Nova Scotia was clear: Manage the deficit through cuts that weaken the foundations of affordability or address our current fiscal situation by building a stronger, more inclusive economy.
The Nova Scotia Alternative Budget is fully costed and grounded in realistic revenue options to make life better for the many in our province. In contrast, the Nova Scotia budget just tabled is unrealistic because it claims that service cuts will solve long-standing structural issues of affordability. Cutting public sector jobs may make the books look better in the short term, but it often weakens the economy and makes life more expensive, pushing unmet needs down the road when they will be more costly. Sustainable growth comes from a diversified, people-centred economy.
Affordability has been sacrificed to increase the profits of Nova Scotia Power’s shareholders. Now was the time for massive investment in renewable energy, energy efficiency, and energy cost relief. Instead, they are maintaining the Heating Assistance Rebate Program at $400 a year without expanding eligibility. They could have targeted the energy rebate to better support Nova Scotians who are struggling to pay their power bill. And now they are adding an additional fee for Nova Scotians who own electric or hybrid vehicles, exactly the wrong policy.
Frequent adverse weather events, including fires and floods, Post-Tropical Storm Lee in 2023, and Hurricane Fiona in 2022, create urgency for the Province to put in place plans to respond quickly and clean up after weather- and climate-crisis-related events, while working to mitigate and prevent further damage. Instead, this budget shows a government doubling down on prioritizing resource extraction over environmental protection.
Inequality will worsen
The result of cuts will be uneven, affecting those who are most vulnerable in our province, and deepening inequality whether by income, by gender or by race. They have provided no analysis to show which Nova Scotians, and which communities, benefit or pay the cost. Women make up just over 63 per cent of public sector jobs and will be disproportionately affected by cuts.
Higher-income earners have benefited most from tax cuts that caused the $500 million revenue shortfall, and now the average Nova Scotian and those living in poverty will not be lifted out.
- Income Assistance has been indexed to inflation and they project a growth in caseload, but the indexation will provide a very small increase to an inadequate base that is thousands of dollars below the poverty line.
- The Office of Child and Youth has been established with a small budget, suggesting its scope will not allow it to do the kind of monitoring and advocacy needed.
- Education will suffer without the desperately needed additional resources for grades Primary to twelve for smaller classes and to better accommodate children with disabilities.
- Post-secondary education is in the midst of a crisis, with universities having relied on international students to make up for a lack of investment from the NS government, there is next to no increase to grants to universities, while the office of the Minister and Deputy Minister see a significant budget increase ($200,000). This theme of shifting resources from front-line services to executive level staffing is seen in various departments.
- Nova Scotia should not be investing in for-profit child care, and could have instead invested more in capital and a new operating model for non-profit and public child care, which would go further to expanding it; instead without keeping to the promise of $10 a day child care, this will leave families scrambling.
- Affordable housing investments will help, but bringing rental subsidies to cover just over 10,000 Nova Scotians and funding for maybe 1000 affordable units, still leaves thousands in core housing need.
- The effect of arts and culture cuts, including grants for film, will result in job losses, and is also what protects our heritage, and is part of quality of life.
The goal should be to make the economy work better for the people who live here, not to chase the next big company to extract resources for shareholders, creating few sustainable jobs, high cleanup costs, and limited local benefits.
If we want a stronger, more resilient province, we must organize our economy for the many, not the few.
