The latest update on Nova Scotia’s 2025-26 provincial budget indicates a $1.2-billion deficit, surpassing the initial $697-million deficit projection made by Finance Minister John Lohr in February. Lohr expressed optimism about the province’s economic outlook, citing strong potential in natural resources and infrastructure projects like Wind West and housing development that could attract more workers to the region.
Several factors led to the deficit exceeding $1 billion in the first quarter. Various government departments required additional funding, including significant amounts for the Communities, Culture, Heritage and Tourism Department, Seniors and Long-Term Care Department, and Health Department. Health spending, in particular, saw substantial increases to support initiatives such as hiring travel nurses and addressing wage settlements for health support workers.
Despite the significant deficit, Lohr emphasized the government’s commitment to improving healthcare, attributing the rise in health spending to necessary investments in the sector. He acknowledged the uncertainty surrounding the budget forecast but refrained from making predictions about the fiscal year’s outcome.
The government also disclosed that the first $200-million payment from a national lawsuit settlement with tobacco companies had been allocated to general revenue for the 2024-25 fiscal year. However, with population growth slowing down and economic uncertainties looming, including the impact of Chinese tariffs on seafood exports, challenges lie ahead for the province’s financial stability.
Opposition leaders, such as NDP Leader Claudia Chender and Interim Liberal Leader Derek Mombourquette, expressed concerns over the record deficit and questioned the government’s strategy to address the financial challenges. They highlighted the need for effective solutions to manage the deficit and support struggling Nova Scotians.
Changes in accounting practices, such as the reclassification of long-term care home builders’ mortgages as tangible assets and the elimination of tolls on Halifax-Dartmouth bridges, have also impacted the province’s financial standing. These adjustments have contributed to fluctuations in the net debt figures, adding further complexity to the budgetary landscape.
