Nova Scotia Deficit Projected to Hit $1.44 Billion as Spending Outpaces Revenue
Nova Scotia Finance Minister John Lohr released a fiscal update projecting a $1.44 billion deficit for the 2026-27 fiscal year, driven by expenses exceeding revenue growth. The report also finalized the 2025-26 year with a record $1.4 billion deficit and $1.9 billion in unbudgeted spending, drawing criticism from opposition parties regarding financial discipline.
Nova Scotia Finance Minister John Lohr has released a fiscal update revealing that the province's deficit for the 2026-27 fiscal year is projected to reach $1.44 billion. This projection represents an increase of approximately $195.7 million to $200 million from the original budget figures.
The widening gap is primarily driven by spending outpacing revenue growth. Forecasted expenses for 2026-27 are estimated at approximately $19.1 billion to $19.2 billion, which is about $208 million higher than initially budgeted. Meanwhile, forecasted revenues are expected to be between $17.3 billion and $17.4 billion, slightly higher than initial projections but insufficient to cover the rising costs.
In the first quarter of the 2026-27 fiscal year alone, the government spent approximately $249.6 million to $250 million outside the approved budget through additional appropriations.
Record Deficits and Unbudgeted Spending in 2025-26
The update also finalized the accounts for the 2025-26 fiscal year, which closed on March 31, 2026, with a record deficit of $1.4 billion. Net debt for the province reached $24.1 billion during this period.
A significant factor in the previous year's shortfall was $1.9 billion in unbudgeted spending across multiple departments. In 2025-26, 11 or 12 government departments exceeded their budgets. Key areas of overspending included:
- Health and Wellness: Overspent its budget by $384.6 million.
- Seniors and Long-Term Care: Overspent by more than $75 million ($76.3 million).
- Restructuring Costs: Totaled $1.1 billion, an increase of nearly $593 million from the tabled budget.
Additionally, a February 2026 court ruling deemed Bill 148 unconstitutional, requiring a settlement expected to cost hundreds of millions of dollars.
Government Response and Future Plans
Finance Minister John Lohr defended the spending as necessary to meet rising service demands, particularly in health care and seniors' services. He cited future economic growth in the defence and energy sectors as key factors that will help improve the province's finances.
To address the current fiscal challenges, Lohr stated that the government plans to cut $620 million in the next budget. The administration also intends to reduce the civil service by five percent annually for four years.
Opposition Criticism
Opposition leaders have criticized the Progressive Conservative government for lacking financial discipline and accountability. Liberal leader Iain Rankin and NDP leader Lisa Lachance argued that there is insufficient legislative oversight on spending. They highlighted the pattern of departments consistently exceeding budgets without adequate prior approval or transparency.
The next budget update is scheduled for December 2026.