The Nova Scotia government has introduced a $17.6-billion budget that includes major tax cuts and a reserve fund to be used if the U.S. president makes good on his threat to impose tariffs.
Finance Minister John Lohr brought forward a budget Tuesday forecasting a deficit of $697.5 million for the 2025-26 fiscal year—a figure that could rise if the $200-million reserve fund needs to be used.
“The threat of U.S. tariffs continues to loom over us. We don’t know what will come, but we are ready to respond,” said Lohr in his budget speech. “It is clear we are entering a period of heightened uncertainty and heightened risk.”
Lohr said the province faces hard work in the years to come due to pressing issues such as slowing population growth and American protectionism, which could trigger a drop in exports. The Progressive Conservative government’s proposed solutions range from lowering taxes to increasing capital spending on hospitals and public housing.
The $500 million in tax measures include a one percentage point reduction in the provincial portion of the harmonized sales tax, to 14 percent, the indexation of tax brackets, and an increase in the basic personal amount that is shielded from the provincial income tax—moves the government says will save the average household more than $1,000 this year.
Lohr noted that the sales tax cut is the first one in the province since 2010, and the lowest in Atlantic Canada.
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Meanwhile, the Progressive Conservative budget removes parking fees at all provincial hospitals, at a cost of $19 million, and drops the tolls from the two bridges spanning Halifax harbour starting April 1, which will mean $39 million in lost revenue.
In response to threats by U.S. President Donald Trump to impose 25 percent tariffs on Canadian goods in March, Lohr said the province is looking to diversify its economy in areas such as critical minerals, wind power and hydrogen.
He repeated the message delivered multiple times by Premier Tim Houston since the start of the new year that the government also intends to rethink “outright bans” on the development of uranium and natural gas. “This means lifting bans and avoiding outright bans in the future,” he said in the speech.
Nearly $6 billion is earmarked for health care, an eight percent increase from the previous year, including $1.4 billion for various capital costs and hospital expansions, with $26.9 million to cover the costs of the shingles vaccine for those aged 65 and older.
The province is describing the projected $2.3 billion in capital project spending—including the health infrastructure—as part of a wider strategy to “help stimulate the economy” amid the threat of U.S. tariffs.
Meanwhile, the government’s first budget since the Tories won a second consecutive mandate in the Nov. 26 election forecast that about 159 jobs in the civil service—out of the 11,324 positions—will be cut through attrition and retirements.
As climate emergencies ranging from hurricanes to wildfires have battered the province in recent years, the Tories are committing an additional $25 million to respond with the new Department of Emergency Management and a volunteer response group called the Nova Scotia Guard.
