With its new budget, the Nova Scotia Government wants you to think it is making historic investments, for “unlocking our potential.” It has declared, for example, that it will be making the largest-ever investment in new public housing. Such a claim, however, simply highlights the fact that this government and previous governments have failed to invest in affordable housing for decades. According to Nova Scotia’s Provincial Housing Needs Assessment Report, with an estimated 104,800 dwelling units required by 2032, Nova Scotia should be completing 10,500 new units annually. Thus, the government’s planned public housing investment for 515 units falls far short of the assessed need.
Nova Scotians needed bold investments, not proclamations about historic government decisions. By cutting a percentage point from the Harmonized Sales Tax (HST), this government also boasts of providing the largest tax break in Nova Scotia’s history. But is the loss of $294 million in revenue worth it?
When weighing budget decisions, our opportunity cost assessment is framed by our alternative budgets and by who benefits and pays the costs.
We can and should expect more.
Lacking enough income results in not accessing the essentials, which causes tremendous stress and takes a toll on people’s mental and physical health. Not being able to afford decent quality housing and nutritional food, also affects people’s ability to learn and compounding from there, preventing people from reaching their full potential.
What is in this year’s budget to support Nova Scotians to live comfortably and reach their full potential? What could we have expected?
Fiscally Healthy
Despite some economic uncertainty, Nova Scotia is in good fiscal health. The debt-to-GDP ratio is relatively low and has been steady for many years. Debt servicing costs have decreased significantly, with debt locked in at very low interest rates. Historically and compared to other provinces, Nova Scotia’s fiscal position is strong. We have ample room to grow our own-source revenue and increase spending on public programs. For those who value bond-rating agencies, Nova Scotia has been given a higher rating than the Canadian average.
Opportunity costs and budgetary choices
The HST cut will cost $294 million in 2025-26. As a flat tax, it is regressive, meaning those with lower incomes pay a more significant portion of their income on taxes for essentials. However, those with higher incomes to consume more will account for a much more substantial portion of the revenue loss. Boosting the Affordable Living Tax Credit (annual credit of only $255 per adult) or/and increasing the Nova Scotia Child Benefit (NSCB) would be a better way to support those who are struggling; that $294 million could have gone a long way to making those income supports more generous and expanding them to all low and middle-income Nova Scotians. For example, expanding who is eligible for the NSCB (phasing out at $44,000 instead of $34,000) and boosting it from $1,525 annually to $7,000 would decrease poverty by 12 per cent, lifting thousands out of poverty, and would cost about $220 million. The government has invested a small fraction of what is needed, with child poverty worsening , it is critical that more is done, now. Indexing income assistance to inflation still leaves recipients in deep poverty.
Address the housing crisis
If that $294 million was used to build public housing, there could have been an additional 1,100 units (at $250,000 per unit), geared to income to ensure housing security. Or the government could use that amount to provide rent supplements to support people at risk of losing their housing because they are spending more than 30 per cent of their income on rent to meet the immediate need for short-term support for 30,000 plus households while public housing is being built. This year’s budget only provides an additional 400 additional rent supplements.
Expand public services to make life more affordable
With or without the HST cut, the provincial government could have improved affordability by increasing funding to expand access to key universal public services, including child care and health care, public transportation, and food security, with a significant amount directed to non-market affordable housing.
With university tuition nearing $10,000 per year, it is in our best interest as a society to invest in all levels, from primary to 12, to college, and child care. This budget does not include any significant increases in education.
The most significant support to making life more affordable for families with children has been the investment in early learning and child care. This investment, most of which has been federal, decreases costs by 50 percent on average and will bring fees to $10 per day on average by 2026. For some families lucky enough to access licensed care, they could save as much as $6000 a year.
Invest in the care economy
Investment in “skilled trades,” including targeting funding towards women and those who are underrepresented, is undoubtedly important, but it is time to recognize the value of all the skilled work in this province.
Governments have ignored the value of caring because it has been seen as women’s work, undervalued and underpaid, and a significant portion (221 million hours per year) is still unpaid. As economist Armine Yalnizyan has described it, the care economy ultimately helps to define “human development and the economic potential of individuals and whole societies.” It accounts for a significant portion of GDP in Canada, similar to real estate, a third bigger than all manufacturing, almost twice as big as construction or finance, and nearly three times as large as the mining and quarrying sector. Economic growth can’t be sustained without the care economy.
For the greatest bang for our bucks, the government should have invested more in the care economy. Luck should not determine whether you can access primary care, long term care, home care, or child care. Expanding these services requires more investment in the skilled workers who provide the care. There are no additional child care spaces without improving the wages and benefits to retain and recruit Early Childhood Educators, but this is another budget year with no additional provincial funding outside of the Bilateral Agreement. There are no additional long-term care beds without a team of skilled caregivers, cleaners, and support workers and 2032 is a long time from now to wait for the full roll out of the 5,700 promised beds.
Resource extraction, too costly
Under the guise of the perceived threat from American tariffs, the newly elected Nova Scotia government is going to exploit more of our natural resources. That is the crux of the planned response. Instead, the government should focus on diversifying our economy to mitigate environmental harm, lower our costs, create decent jobs, and support local, cooperative businesses to replace what is imported.
Jobs in resource extraction are presented as a trickle-down solution to addressing poverty, which will never happen. Worse, it will mainly enrich multinational corporations. We will pay the costs now and into the future for the destruction of our environment. As Economist Michael Bradfield showed ten years ago regarding fracking, the “benefits” of these resource extraction projects are overestimated, the costs underestimated, the risks underplayed, royalty and revenue overblown, and jobs bonanza speculative.
Invest in renewable, efficient and affordable energy
The $35 million investment in this budget for greening the economy pales to what could and should be done. Now is the time for massive investment in renewable energy, energy efficiency, and energy poverty. How will the Premier follow through on his promise to keep power rate increases to average rate hikes across the country? This government could do this and more with the $125.7 million energy rebate cost. It could redirect the significant portion of this rebate that goes to those who consume the most energy in their large homes and can afford to do so into addressing energy poverty (ensuring no household pays more than six per cent of their income on heating and electricity).
Strengthen administrative processes and democratic decision-making
If there is one lesson we should take away from the destruction of public sector jobs and social supports and contravention of the rule of law in the USA, it is just how much processes and procedures can protect us. It is time to strengthen those processes, ensuring that more people have a say in decisions that affect them daily. Strengthening oversight to ensure everyone has access to clean water, affordable transportation, housing, food, and healthy and safe workplaces. Where are the investments in the proactive application of regulations that protect Nova Scotians? We should move away from complaint-based investigations to a Compliance Enforcement Division for Labour Standards, Health and Safety Regulations, as well as for the Residential Tenancy Act. What about the Early Learning and Child Care Central Agency, which had been proposed to oversee the planning, funding, and expansion of a complete system? It is well past time that the province also has a Child and Youth Commission to advocate on behalf of children.
There appears to be no funding allocated for these processes and procedures to support Nova Scotians in reaching their full potential by decreasing the barriers in their path.
To truly unlock the potential of all Nova Scotians, we needed bold investments to address the social determinants of health, reduce high poverty rates and high regional unemployment rates, and ensure everyone has access to housing and food security. These crises have developed amidst expanding prosperity for some. Now is the time to make our tax system fair by ensuring that everyone pays according to their ability, ensuring sufficient revenue to put us all on a better path of sustainable prosperity. It is the least we should expect from our government.
