Defending Nova Scotia: Budget 2026-27

Overview

Finance Minister John Lohr tabled the 2026-2027 budget Defending Nova Scotia. The budget seeks to make the province more resilient in the face of growing global uncertainty, with a focus on growing the economy, empowering people, rebuilding care and building a financially sustainable province.

The budget unlocks significant investments in health and wellness, education, social development, and seniors and long-term care, in an attempt to balance strategic investments with a rising deficit. Premier Tim Houston and Finance Minister Lohr have both argued that the spending in the budget is necessary to counteract years of underspending in healthcare, housing, affordability and infrastructure.

The budget includes additional revenue sources from new taxes, including those on electric and hybrid vehicle owners and a harmonized federal tax on vaping products.  

Fiscal Overview

The province is forecasting a deficit of $1.19B, with total revenues projected to be $17.4B, an increase of $848.6M over the 2025-2026 estimate. Government expenses will jump to $18.9B, a $1.4B increase from the 2025-2026 estimate.

Tax Rates

Financial Institutions Capital Tax Increase

• Effective November 1, 2026, the FICT tax rate will increase by 2 per cent, raising it to a total of 6 per cent. The increase is expected to raise $15.6M in 2026-2027 and $37.6M once fully implemented in 2027-2028.

Vaping Product Tax Harmonization

• Effective April 1, 2026, a new provincial duty will be collected by the federal government through a Coordinated Vaping Product Taxation Agreement (CVPTA). The provincial duty will match the federal duty at $1.12 per 2ml/gr of vaping substance for the first 10ml/gr of vaping substance in a device or container and $1.12 per 10ml/gr for any additional amount.
• The provincial vaping product tax will end on March 31, 2026. By harmonizing Nova Scotia’s Vaping Product Tax with the federal tax, provincial revenue is expected to increase by $11.7M.

Capital Investment Tax Credit

• The government will extend the sunset date for the tax credit to December 31, 2035, and authorize the credit for qualified property acquired after the date if pre-approved prior.

Electric and Hybrid Vehicle Levy

• Effective October 1, 2026, a new Electric Vehicle and Hybrid Vehicle Levy will be implemented to be paid when a prescribed vehicle is registered and every two years after, when the vehicle is renewed.
• Fully electric vehicle owners will pay $500 every two years, and electric-hybrid vehicle owners will pay $250 every two years.

Contingency Plan

In 2025-2026 the province introduced a $200M contingency fund, to protect against economic uncertainty from shocks such as tariffs, disasters, emergencies and other emerging priorities. Last year, $20.9M of the fund was used for wildfire forest fighting. The remaining amount has been eliminated from the Final Forecast. In 2026-2027 the contingency fund is $50M. This decrease reflects a shift toward more targeted departmental spending while maintaining a buffer for global economic uncertainty.

Highlights

Growing Our Economy – Powering Our Future

• $3.6M to continue implementing the Green Hydrogen Action Plan and to support offshore wind development, leading to transmission through Wind West.
• $25M for the Subsurface Energy Research and Development Investment Program.
• $8M to support forestry contractors and private woodlot owners to move low-grade wood to market and upgrade access roads for harvest.
• $5M to expand the Innovation Rebate Program (IRP).

Empowering People – Building Futures and Communities

• $6.8M to contract four dedicated fixed wing water bombers for wildfire operations.
• $33.4M to expand the province’s trunked mobile radio network and the Cellular Nova Scotia Program.
• $110.3M to build and renovate schools, including École Baie Sainte-Marie in Clare and École sur la péninsule d’Halifax in Halifax.
• $40M to support ongoing childcare transformation.
• $59.1M to transform disability support and transition adults with disabilities to community living.
• $34.3M to continue the Actions to Accelerate Skilled Trades Growth plan.
• $18.5M to support shovel-ready, community-owned projects through the Affordable Housing Development Program.
• $18.1M provincial investment to address housing needs through the National Housing Strategy Action Plan.
• $46.4M to build new public housing units in Sackville, Glace Bay, Kentville, Middleton, Shubenacadie, Springhill, Windsor and Shannon Park, and maintain existing public housing units.
• $25.2M to create 378 new supportive housing units across the province.
• $9.6M to create 75 more emergency shelter beds in Nova Scotia and enhance supports for Nova Scotians experiencing homelessness.
• $681.2M to continue tax saving measures that will save the average Nova Scotian family more than $1,400 a year in 2026-27.
• $100.4M this year for Nova Scotia’s school food programs, $96.7 million for the Nova Scotia School Lunch program and $3.7 million for the Student Healthy Eating Program (breakfast).
• $32.5M for the Heating Assistance Rebate Program.
• $24.7M to the MOST program, to support young workers in high-demand occupations.
• $20.5M more to support Nova Scotians through income assistance.
• $19.8M more to support pharmacare for low-income Nova Scotians.

Rebuilding Care – For a Healthier Nova Scotia

• $9.6M for digital tools to help Nova Scotians find and access healthcare.
• $47.5M to hire more paramedics and emergency medical responders.
• $47.1M to pay more to hardworking family doctors.
• $11.8M to retain critical physician specialists.
• $7.7M to train and mentor medical students in communities across the province.
• $40.1M for the Multidisciplinary Oncology Partnership.
• $30.1M to improve hospitalist coverage.
• $13.4M increase for new diagnostic imaging equipment and staff.
• $84.8M to continue to improve primary care.
• $8M more for the Universal Mental Health and Addictions Care Insured Services Program.
• $7M investment to open Integrated Youth Services across the province by 2027/28.
• $873.8M toward the plan to build 5,700 new and replacement long-term care spaces by 2032.
• $26.5M more for the Home Support Direct Funding Program.
• $12.3M more to support seniors’ attendant care.

Building a Financially Sustainable and Resilient Province

•  $52.5M to buy land for future needs.

• $233.5M to continue rolling out One Patient One Record.

• $41.9M for Enterprise Resource Planning System (SAP) modernization to improve security.

• $33.8M for cybersecurity enhancements including establishing a new Cyber Security Office.
• $144.5M for construction and renewal of other hospitals and medical facilities in Amherst, Yarmouth, South Shore and the IWK.
• $24.7M for the construction of modular units to expand dialysis service in Shelburne, Springhill and Evanston.
• $37M for medical facilities and equipment repairs and renewals across the province.
• $120.1M for Halifax Harbour Bridges.
• $476.1M for highways and structures.
• $52.5M to buy land for any future needs.

Opposition Reaction

NDP MLA Lisa Lachance criticized the government for ongoing affordability problems facing Nova Scotians, citing the Houston government’s own decisions as the cause. She also highlighted the NDP’s concern that the government faced a credit rating downgrade and the impact it will have on the borrowing needs of the province.

Liberal leader Derek Mombourquette responded to the budget by stating that the government created the deficit and the problems that have arisen from the province’s growing debt.

To read the full Nova Scotia 2026-27 budget, click here.