First Tax Cuts, Then Austerity: The Fiscal Shell Game in Nova Scotia’s 2026 Budget
Nova Scotians are being told that the province’s latest budget is about “building a financially sustainable and resilient province.” Unfortunately, the numbers, and the policy choices, tell a very different story. After celebrating one of the largest tax cuts in “Nova Scotia’s history”, the same government is now imposing austerity on communities, cultural institutions and social supports across the province. Calling it unavoidable although it was their actions in overspending and unnecessary tax cuts that have brought us here. The result is neither resilience nor sustainability. It is a political choice to shift the costs of their poor fiscal decisions and financial management onto the very communities that make Nova Scotia livable.
In fact, just before sitting down to write this piece, I picked up my mail and found among the usual year-end tax documents, a glossy promotional letter from my provincial MLA boasting that their government had delivered the largest tax cut in Nova Scotia’s history so that families could keep more of their hard-earned money. What was omitted was that the wealthy disproportionately benefited from these tax cuts. And yet here we are, facing a damaging austerity budget from the very same government. The cuts that they have chosen will harm jobs and communities across the province, particularly among those who are already marginalized and who received the least amount of benefit from the reduction in taxes.
Good job on the tax cut, Mr. Houston.
Perhaps the Premier should have ensured that the recent economic windfall was sustainable before rushing to spend it and making long-term commitments based on temporary revenue. Had the government also avoided massively overspending outside the normal budgetary process, with little to no accountability to the Legislature or the people of Nova Scotia, they might have avoided this situation.
Instead, they now claim that “difficult decisions” must be made and that cuts are unavoidable. With their steamroller supermajority in the Legislature, it is now full speed ahead. How very stalwart of them.
At the same time, the government has introduced legislation that includes heavy-handed measures affecting the Department of Natural Resources’ Wildlife Division, weakens protections for forests in the face of clear-cutting, and opens the door to corporations seeking to exploit our mineral resources. In doing so they risk irreparable damage to our environment and health, not to mention some of our important industries such as farming, fishing and tourism and hospitality. Those matters deserve fuller discussion another time, but they reflect a broader pattern: a government uninterested in evidence, unwilling to grapple with complex policy challenges, and apparently uninterested in decisions that serve long-term public interests rather than short-term political gains or corporate profits.
The Premier says we must “do something.” On that point, he is correct.
We should begin organizing to replace this regressive neoliberal government at the first opportunity.
In the meantime, we can also help the Premier identify alternatives to the drastic cuts he is proposing to community arts, culture, and heritage programs. I suspect our suggestions will be ignored—but at the very least he will no longer be able to claim that there were no other options.
And before anyone asks, yes, the Premier undoubtedly has advisors. Whether he listens to them, or whether ideological blinders prevent certain ideas from even being considered, is another matter.
I would like to offer one proposal to start the conversation. But before doing so, there are two important principles about economic development and community resilience that we should keep in mind.
First, development must be socio-economic, not merely economic.
When I served as Assistant Deputy Minister of Lands and Economic Development at the federal Department of Indian and Northern Affairs, we learned an important lesson: economic development in communities facing serious social challenges often worsened conditions rather than improving them. Without strong social foundations, new economic activity can amplify existing problems.
Community capacity, social health, and cultural vitality, the very areas targeted for cuts in this budget are essential to quality of life, to positive health outcomes, and yes, to a strong economy.
The Premier proudly insists that he is not cutting health care. In reality however, these cuts will damage the very social supports that underpin health. If the Premier had sought advice on the well-established (and researched) social determinants of health—including from Engage Nova Scotia, a world-class organization studying these issues—he might better understand this connection.
Second, politicians love to speak about “resilience.” The Progressive Conservatives have done so repeatedly in their budget’s glossy promotional materials—no doubt prepared by consultants at considerable expense.
But resilience does not mean simply telling individuals to toughen up and pull themselves up by their bootstraps.
One of the world’s leading experts on resilience happens to live and work right here in Nova Scotia. His research shows that only about 20 percent of resilience depends on individual characteristics. The other 80 percent depends on access to the resources people need when they need them.
Yet many of those very resources are now being cut.
The Premier and his neoliberal allies may prefer to celebrate the 20 percent. Unfortunately for them, the research does not support that worldview.
Which brings me to my suggestion.
During my work challenging the non-resident property tax that Mr. Houston attempted to introduce early in his first mandate, I learned a great deal about Nova Scotia’s property tax system. That proposal itself demonstrated a lack of attention to history and evidence. The Premier seemed unaware that his own party had commissioned a detailed study of this same idea in 2001. That report concluded unequivocally that such a tax would be a bad policy, and the Hamm government quickly abandoned it.
In examining the system more closely, I learned that Nova Scotia’s Capped Assessment Program limits how quickly property tax assessments can rise for eligible homeowners. Reforming this system so the cap (limiting the increase in assessments) applies only to a primary residence could help address inequities while generating additional revenues. Currently, unlike the federal income tax system which allows individuals or couples to designate only one principal residence for tax purposes, Nova Scotia’s rules allow homeowners to claim the cap on multiple properties as long as they are deemed “owner-occupied.”
My proposal is simple: allow the property tax cap on only one primary residence.
Any additional homes owned by the same individual or household should be taxed based on their full assessed market value.
Housing should first and foremost be a place to live. Increasingly, however, houses are being treated as investment vehicles or status symbols. If someone is wealthy enough to own multiple homes, they are wealthy enough to pay full property taxes on those additional properties.
They are certainly better positioned to do so than the workers, artists, cultural organizations, and community institutions now threatened by the government’s cuts.
After all, aren’t we supposed to be “all in this together”?
Nova Scotia faces real challenges, but austerity that weakens communities is not the only path forward. Thoughtful, evidence-informed alternatives exist, if our leaders are willing to consider them.
So, let’s begin building an inventory of ideas grounded in research, fairness and long-term resilience and sustainability. If government cannot imagine better solutions, perhaps Nova Scotians themselves can.
What alternatives would you propose? I invite readers to share their ideas for strengthening Nova Scotia’s finances without undermining community wellbeing. You may find this article which sets out several other available options for the government helpful as you take on this challenge!
Please share this article widely and add your own suggestions. Our province deserves policies that strengthen communities rather than hollow them out.
Because resilience and sustainability are not built through cuts. They are built through investment in the people and communities that make Nova Scotia home.
