Nova Scotia Budget 2026–27: Deficit Narrows Slightly, Housing and Health Spending Continue Amid Fiscal Restraint
Nova Scotia’s 2026–27 Budget projects a $1.24 billion deficit, slightly improved from the current year but higher than originally forecast due to increased expenditures. The deficit is expected to gradually decline to $809.5 million by 2029–30. Government revenues are projected to grow 4.6% this year, while spending rises 4.2%.
Despite fiscal restraint messaging, net debt is projected to rise to 45.4% of GDP by 2029–30. The budget includes a $50 million annual contingency and introduces structural restraint measures, including 5% annual civil service reductions, 3% reductions in the broader public service, and $130.4 million in grant reductions.
Housing Measures
Housing remains a stated priority, with key allocations including:
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$46.4 million to build and maintain public housing units
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$25.2 million for 378 new supportive housing units
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$18.5 million for the Affordable Housing Development Program
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$18.1 million tied to the National Housing Strategy Action Plan
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$77 million total to expand rent supplements to 10,500 households
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$9.6 million to expand emergency shelter capacity
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$30.8 million for NSCC student housing
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$34.3 million for skilled trades growth to support construction capacity
While these investments support housing supply and affordability programs, broader economic projections show construction activity plateauing in 2026–27 following strong growth in 2025.
Affordability and Tax Measures
The budget maintains existing tax relief measures (indexing brackets, 1% HST cut, energy rebate) valued at $681 million. The Heating Assistance Rebate increases to $400 annually, and income assistance and pharmacare funding are expanded.
Revenue measures include:
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Increasing the Financial Institutions Capital Tax from 4% to 6%
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Harmonizing the vaping tax
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Introducing a new electric and hybrid vehicle levy
Economic Outlook
Economic growth is projected to slow to 1.5% real GDP growth in 2026. Population growth is expected to moderate, labour market expansion is projected to slow, and construction activity is forecast to level off.
RHPNS Perspective
From a rental housing standpoint, the budget continues direct public housing and rent supplement expansion but signals broader fiscal tightening through staffing cuts and grant reductions. Slower economic growth and plateauing construction may affect housing supply momentum.
While affordability programs are expanded, rising net debt and continued deficits suggest future fiscal pressures could influence taxation, infrastructure spending, and program sustainability — all relevant to long-term housing supply and operating conditions.
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