N.S. budget includes reserve fund, tax cuts amid U.S. tariff threats

CITYnews halifax / By The Canadian Press

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 is 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 budget contains $500 million in tax cuts, including a one percentage point drop in the harmonized sales tax to 14 per cent, and an increase in the basic personal amount that is shielded from the provincial income tax.

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• ‘A lot of uncertainty’ for Nova Scotia fishers amid trade war with U.S.

Lohr says that in response to threats by U.S. President Donald Trump to impose 25 per cent tariffs on Canadian goods in March, the province is looking to diversify its economy in areas such as critical minerals, wind power and hydrogen.

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.

Nearly $6 billion is earmarked for health care, 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.

Highlights from Nova Scotia’s 2025-26 provincial budget

• Total spending is forecast to be $17.6 billion, with a projected deficit of $697.5 million
• $2.3 billion in capital project spending to “help stimulate the economy” amid the threat of U.S. tariffs
• $200-million reserve fund to assist if provincial revenues fall due to potential tariffs; deficit could increase if fund is used
• One percentage point cut in the harmonized sales tax, to 14 per cent, by April 1
• Health spending to rise by eight per cent to almost $6 billion
• $27 million for shingles immunization program; $19 million to remove hospital parking fees; and $39 million to drop tolls on two Halifax bridges
• $25 million to set up the Department of Emergency Management and a volunteer agency, both of which are to help the province manage effects of climate change
• Net debt jumps to almost $23 billion in 2025-26 from $19.8 billion

This report by The Canadian Press was first published Feb. 18, 2025.