Nova Scotia Budget 2025: Funding and Opportunities

The Government of Nova Scotia’s 2025–26 budget, titled “Unlocking Our Potential,” introduces significant investments and policy changes aimed at stimulating economic growth, supporting local businesses, and enhancing public services.  

With a projected deficit of $697.5 million, the budget outlines strategic initiatives designed to make life more affordable for residents and create a resilient economic environment. 

“Budget 2025–26 will continue to move Nova Scotia forward. It builds on progress already made and delivers on promises to lower taxes, hire more doctors, increase wages, and strengthen our economy. This is how we will help unlock Nova Scotia’s full potential.” 
– John Lohr, Nova Scotia’s Minister of Finance and Treasury 

 

Support for Local Businesses and Industry Diversification 

Recognizing the importance of a robust local economy, the budget introduces several government funding initiatives to support small businesses and diversify industries: 

• Small Business Tax Relief: The small business tax rate will be reduced from 2.5% to 1.5% effective April 1, 2025, and the income threshold for this rate will increase from $500,000 to $700,000. These changes aim to enhance the competitiveness of small enterprises within the province.  
• Nova Scotia Loyal Program: An $8 million investment is intended to encourage residents to purchase local products and services, strengthening the provincial economy and supporting homegrown businesses. 
• Green Economy Initiatives: $35 million will be allocated to Nova Scotia’s Climate Change Plan for Clean Growth, assisting businesses in creating green jobs and adapting to climate change impacts. This includes $6.1 million for constructing and renovating net-zero homes and apartments and $5.2 million to boost clean electricity through the Community Solar Program.  
• Industry Diversification Efforts: Funding will be dedicated to exploring offshore wind development, advancing the Critical Minerals Strategy, and creating a comprehensive Trade Action Plan. These initiatives aim to open new markets and reduce reliance on traditional industries, positioning Nova Scotia as a leader in emerging sectors. 

Investments in Infrastructure and Economic Growth 

The 2025–26 budget also includes the largest capital plan in Nova Scotia’s history, allocating more than $2.35 billion to infrastructure projects that are expected to stimulate economic activity and create jobs. Key investments encompass: 

• Healthcare Facilities: $750.9 million dedicated to the expansion of the Halifax Infirmary and redevelopment projects in the Cape Breton Regional Municipality 

• Public Housing: $136.4 million allocated for the construction of 242 new public housing units, nearly doubling the current stock and addressing the pressing need for affordable housing 

• Education Infrastructure: $210 million earmarked for building and renovating schools across the province, ensuring modern and safe learning environments for students 

• Transportation: More than $518 million designated for highway construction and maintenance, including new projects like the Port Hastings intersection in Inverness County and passing lanes on Highway 107 in the Halifax Regional Municipality 

These substantial investments are designed to lay the groundwork for long-term economic resilience and growth, providing essential services and infrastructure to support communities throughout Nova Scotia. 

Major Tax Reforms and Affordability Measures 

A cornerstone of the 2025–26 budget is the implementation of more than $500 million in tax-saving measures intended to alleviate the financial burden on Nova Scotians. These measures include a 1% reduction in the Harmonized Sales Tax (HST), decreasing it from 15% to 14% effective April 1, 2025.  

Additionally, the basic personal amount exempt from provincial income tax will increase from $8,744 to $11,744 starting January 1, 2025. The government will also begin indexing tax brackets to inflation, ensuring that taxpayers are not pushed into higher brackets because of cost-of-living increases. Collectively, these changes are expected to save the average Nova Scotian family more than $1,000 annually.  

Building a Stronger Future for Nova Scotia 

In response to potential external economic challenges, such as proposed U.S. tariffs on Canadian goods, the budget additionally includes a $200 million reserve fund to mitigate potential impacts. This proactive measure reflects the government’s dedication to maintaining economic stability amid global uncertainties. 

Overall, Nova Scotia’s 2025–26 budget presents a comprehensive plan focused on tax relief, strategic investments in infrastructure, and robust support for local businesses. These initiatives are designed to foster a resilient economy, enhance public services, and improve the quality of life for all Nova Scotians.