HALIFAX — The Progressive Conservative government of Nova Scotia is set to unveil its post-election budget on February 18, 2025, amidst prevailing economic uncertainties triggered by potential tariffs proposed by U.S. President Donald Trump. The budget will address financial plans for the 2025-26 fiscal year and comes on the heels of Premier Tim Houston's party securing an expanded majority in the provincial elections held on November 26, 2024. Throughout their campaign, the Premier's party emphasized commitments to tax cuts and controlling electricity rate increases.
The context surrounding the budget presentation has changed significantly since the election. In March 2025, Trump threatened to impose steep tariffs of 25 percent on Canadian goods. Should these tariffs come to fruition, they are likely to provoke retaliatory tariffs from Canada, complicating the financial landscape. Nova Scotia's economy, particularly sensitive to such developments, relies heavily on its export market, with nearly 70 percent of exports from January to September 2024 directed towards the United States. This dependency underscores the province's vulnerability in the event of a trade war.
In response to these challenges, Premier Tim Houston has recently shifted his economic messaging to focus on promoting a "resource-focused" economy. The Progressive Conservative government is making a commitment to enhance efforts in developing industries centered around hydrogen production, offshore wind energy, and the extraction of critical minerals. This strategic pivot aims to position Nova Scotia as an innovator in these emerging sectors, thereby fostering economic resilience.
However, the government must navigate not only external economic pressures but also internal demographic trends. Over the past few years, the province has experienced steady population growth, which played a crucial role in bolstering government revenues. Nonetheless, indicators suggest that this population growth has begun to slow, which may have implications for future fiscal health and government funding capabilities.
As stakeholders await the budget details, all eyes will be on how the provincial government plans to balance its election promises with the new economic realities posed by trade tensions. The performance of Nova Scotia’s economy in the coming months and years will heavily depend on the strategies implemented in this budget, particularly in light of its significant export reliance and demographic shifts.
