On February 18, Finance and Treasury Board Minister John Lohr tabled Budget 2025-26: Unlocking Our Potential.

Summary/Political Context

On Tuesday, John Lohr tabled his first budget as finance minister — and his party’s first since winning last November’s election —projecting revenues of $16.5 billion, expenses of $17.6 billion and a deficit of $698 million. 

As Nova Scotia is one of the highest-taxed jurisdictions in Canada, Budget 2025-26 aims to make life more affordable with more than $500 million in tax cuts, the largest in the province’s history. Many of the various tax cuts the PCs promised during the election will become effective on April 1, including:

• Reduce the HST by one percentage point ($293 million).
• Increase the small business threshold from $500,000 to $700,000 and reducing the small business tax rate from 2.5 per cent to 1.5 per cent ($47 million).
• Remove the tolls from the Halifax harbour bridges (i.e., Angus L. Macdonald, A. Murray MacKay).

Themes

Tariffs

Budget 2025 projects a deficit of $698 million, but it could grow if the government needs to tap into a $200-million contingency fund it has set aside in the event of tariffs from the United States (U.S.) government. While Lohr said he does not know yet if or how that funding will be used, and decisions will follow any actions undertaken by the U.S, he wanted to signal to Nova Scotians that the government will do whatever it needs to do.

Health Care

Health-care spending, including a $2.3-billion capital plan will include $750.9 million for the Halifax Infirmary expansion project and Cape Breton Regional Municipality Health Care redevelopment project. Another $131.9 million is earmarked for construction and renewal of other hospitals and medical facilities, including projects in Amherst, Yarmouth, the South Shore and at the IWK Health Centre in Halifax; $90.9 million for One Patient, One Record to enable a digitally supported patient-centered health system; and $54 million ongoing funding for initiatives that move the province toward publicly funded universal mental health and addictions care.

Transportation and Infrastructure

This budget allocates $88 million to build, renovate and maintain public housing across the province – the first new public housing build in more than 20 years. The budget also includes $73.9 million to provide 8,900 rent supplements to Nova Scotians, an increase of 400 over last year, and a rebate of the provincial HST on new purpose-built rental housing. The government will also allocate $25 million this year to support the Department of Emergency Management and to register, train and deploy the Nova Scotia Guard, and to strengthen how the province responds to emergencies, including the creation of six regional operational centres.

Education

To prepare for the future workforce, the government has allocated $210.0 million to build and renovate schools, including three schools that will open in the 2025-26 school year. The budget pegs a $61.3 million increase this year to expand the school lunch program to an additional 77 schools, reaching about 29,000 more students. The $80 million in total school lunch spending will bring the program to all middle and junior high schools ahead of schedule.

Fiscal Projections/Economic Outlook

Budget 2025-26 promises to continue to move Nova Scotia forward, projecting revenues of $16.5 billion,  expenses of $17.6 billion, and a deficit of $698 million. The net debt is expected to increase by $2.7 billion this year, climbing to $22.4 billion. Part of that increase is the $300 million from converting the bridge commission to a Crown corporation

With its $500-million tax saving measures, the government is increasing the basic personal amount for all Nova Scotians from $8,744 to $11,744 starting January 1, 2025. There will also be two increases to the minimum wage, starting with an increase to $15.70 on April 1, 2025, and $1.30 on October 1, 2025.

According to the Fraser Institute, “…large amount[s] of red ink should concern Nova Scotians who’ll be saddled with the resulting debt burden. While modest tax relief and the focus on resource development is positive, the government must once again outperform its fiscal projections to avoid mortgaging Nova Scotia’s future.”

The team at Diplomat Consulting looks forward to the opportunity to work with you and your business to assess opportunities for alignment with government objectives, as well as support you in understanding any political risk, please contact Diplomat Consulting at: hello@diplomatconsulting.com.

Naomi Mison

Public Relations Director