Credit agency downgrades Nova Scotia’s finances, citing more spending and debt

Finance Minister John Lohr tables the provincial budget at Province House in Halifax on Tuesday, Feb. 18, 2025. THE CANADIAN PRESS/Kelly Clark

HALIFAX — One of the biggest credit rating agencies in the world is downgrading its view of the Nova Scotia government’s finances, saying higher-than-budgeted spending on seniors and health care could make it harder to balance future budgets.

S&P Global says it expects the government’s budgetary performance this year will fall short of expectations and that deficits over the next several years will be larger and last for longer.

The New York-based firm has lowered its long-term and senior unsecured debt ratings on Nova Scotia from double-A-minus to A-plus, predicting deficits over the next two years will increase the need to borrow money.

Premier Tim Houston’s government projected a deficit of about $697 million last spring, but that has since ballooned to nearly $1.3 billion as of December.

The government says the downgrade has not lowered demand for its 10-year bonds, so there has not been an effect on the province’s cost of borrowing.

Houston’s government has never posted a budget surplus since coming to power in 2021 and S&P warns it may downgrade the province’s finances further if it doesn’t start making progress toward a balanced budget.

This report by The Canadian Press was first published Feb. 2, 2026.