Nova Scotia budget includes more health-care spending, mild tax relief

Finance Minister Allan MacMaster has tabled his government’s third budget, a document that continues massive spending on health care but also gives a nod to cost-of-living pressures as the province gets closer to an election year.

The budget unveiled Thursday includes revenues of $15.8 billion against expenses of $16.5 billion. As usual, spending on health care absorbs the lion’s share, coming in at $7.3 billion with construction projects included. That’s 44 per cent of all government spending.

But in acknowledgement of the challenges residents face with the cost of living, MacMaster announced that the province will begin indexing personal income tax brackets, the basic personal amount and some non-refundable tax credits to Nova Scotia’s rate of inflation on Jan. 1, 2025.

“Cost of living has become top of mind for people as we experience some of the highest increases in inflation in 30 years,” MacMaster said in his budget address at Province House.

“The No. 1 ask by Nova Scotians in this year’s budget consultation was for tax relief. Madam Speaker, they are going to get it.”

Government officials say the changes will amount to an average savings of $69 to $259 per person in 2025, depending on their tax bracket. The average savings will increase to between $231 and $863 in 2028.

The Tories are touting it as the largest tax break in the province’s history.

School lunch program

The government also responded to long-standing calls for a provincial school lunch program, earmarking $18.8 million in to get the work started on a four-year rollout.

An Education Department official said the expansion will begin in September with all of the province’s elementary schools. The timeline could speed up, however, if the province can secure a funding deal with the federal government.

MacMaster’s budget also includes the continuation of another trend under the Tory government: income assistance rates remain frozen for the third year in a row, a move that amounts to a cut when inflation is factored in.

On Wednesday, the government announced a one-time payment of $150 for income assistance recipients who do not qualify for a previously-announced increase in disability support payments of $300 a month. But that is the only increase they will see in the budget.

The increase in the disability support payments is part of $102.3 million the government will spend to make changes to the program in response to the remedy in a human rights case that challenged the way the province housed and cared for people with disabilities.

500 new rent supplements

Other social measures in the budget include previously-announced support for temporary, supportive and affordable housing as the province continues to grapple with record low vacancies, and record high homelessness and rent increases.

The government will spend $2.4 million to create 500 new rent supplements and it’s adding $5 million to a program that helps low-income homeowners do work on their property.

There is an increase of $7.1 million in permanent funding for transition houses and women’s centres, a response to a recommendation by the Mass Casualty Commission, which brings the total annual funding to $16.9 million.

On the health-care front, the government is increasing funding to Nova Scotia Health and the IWK Health Centre by $360.7 million.

There is $184.3 million to help address wait times and access to diagnostic testing and surgery. The continued development of electronic patient medical records will get $75.6 million and there’s more money for cancer care.

Funding for doctors clocks in at $1.2 billion.

The budget includes $36.2 million for a previously-announced plan of creating universal mental health and addictions care through a new insured services program.

There’s also the money announced Wednesday to cover technology-based care for people living with diabetes.

The budget estimates that the decision to remove the provincial share of HST on new construction of purpose-built, multi-unit apartments will cost up to $100 million a year, a move officials expect will lead to “a slight increase” in construction growth.

The first $15 million in a three-year commitment to expand cellular service across the province is also included in this budget.

$10/day child care in 2026

Along with the school lunch program, the government is touting the continued funding of the affordable child care agreement with Ottawa, which aims to reduce the average cost to  $10 a day in 2026.

A plan Premier Tim Houston announced earlier this month to give job offers to all graduating students of Nova Scotia bachelor of education programs will cost about $28 million.

How representative the budget is of the government’s actual plans remains to be seen.

The Tories spent more than $1 billion in 2023-24 outside of their budget on a long list of projects and in response to issues such as homelessness, wildfires and flooding, something MacMaster has said he’s been able to do because revenues have exceeded projections by a wide margin.

Revenues have been driven by higher-than-expected personal income tax and HST, as the province’s population continues to grow. Although the budget anticipates further population growth, the pace of growth is expected to slow.

The government is forecasting a surplus of $40 million for the 2023-24 budget year, which is coming to a close.

The net debt for 2024-25 is expected to surpass $20 billion for the first time. The government is projecting deficits for each of the next four years, although previous fiscal years under the Tories that started with estimated deficits closed with surpluses.

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