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 and Premier Tim Houston called it "an incredible form of tax relief," although MacMaster attempted to temper expectations while speaking to reporters.

"I will grant you that in the first year, the amounts are not as significant as they will be over time," he said.

"I want to be very transparent."

Province-wide 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.

Houston noted that on Wednesday the government increased the amount of money people on income assistance who are working can keep by $100 without it being clawed back. The premier told reporters that his preference is on helping people get into the workforce.

"We want those people who are able to work to reattach to the workforce," he said. "There's significant needs in the economy for workers."

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.

"We're always going to try to do more," said MacMaster.

Opposition says more money needed to fight poverty

Opposition leaders said the minister didn't try hard enough with this budget.

"I know we are going to have a generation of Nova Scotians who are going to be trapped in poverty because of this government's inattention to their issues and their concerns," Liberal Leader Zach Churchill told reporters.

The indexing of tax brackets and the school lunch program are positive steps that opposition parties have advocated for, Churchill said, but the province can afford to go further. He called on them to reduce the HST from 15 per cent to 13 per cent.

NDP Leader Claudia Chender said families across the province would meet news of the creation of a school lunch program "with a sigh of relief," but she said it doesn't come close to meeting the needs of the poorest people in the province.

With the continued refusal to index income assistance rates to the rate of inflation, Chender said the government's view on the issue is clear.

"They ignore the systemic causes of poverty, frankly. They ignore the ways in which government has created poverty through policy choices and they insist on making the same ones again."

Failing to take more measures to help people out of poverty will result in increased costs elsewhere, such as in the health-care system, said Chender.

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 is accounted for in this budget. That measure, along with other steps to address operational pressures in the P-12 system through wage increases to existing teachers moving up the pay scale and licence upgrades 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. Finance officials say population growth is expected to slow from four per cent to 2.3 per cent.

"We're not expecting the population to grow like it did right out of the pandemic," said MacMaster, adding that the challenge of finding housing could be influencing the numbers.

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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