N.S. top finance bureaucrat not surprised, but disappointed by credit rating downgrade

Nova Scotia is looking for savings amid its record deficit.

Given its record deficit and negative fiscal outlook, the Government of Nova Scotia has to determine what they can and can’t afford, said Kelliann Dean, the province’s deputy minister of finance and treasury board, at a public accounts committee on Wednesday.

Dean told the legislative committee she wasn’t surprised but disappointed by the credit rating downgrade S&P Global gave Nova Scotia, dropping its score from AA- to A+ with a negative outlook.

“Our revenues overall are slowing and that is creating less capacity for us and so we do have to look at constraining expenses,” said Dean.

It’s the first credit rating downgrade the province has received in nearly 30 years. It faces a record $1.4-billion deficit brought on by increased and overbudget spending on health care, long-term care and assistance for seniors, and dealing with record wildfires and droughts.

Although officials won’t say if job losses are coming, the union representing thousands of public employees say the layoffs are likely ahead of the budget.

Dean confirmed all departments have been asked to examine what a 10 per cent cut to spending would look like but wouldn’t elaborate in any detail before the budget

“Departments were asked to take a look at their grants and also they’ve been asked to look at hiring very closely and further measures will be discussed at budget,” said Dean.

Auditor General Kim Adair was at the committee meeting and has called on government to change the rules around spending outside the budget, proposing a change to the law that would require additional spending outside of the budget be debated in the legislature.

The Houston government hasn’t signalled whether it’s going to change that law, nor did the Liberals, who had the chance do so when they were in power.

Former premier Iain Rankin says $6.7 billion has been spent outside of the budget since 2021, when the Houston government was first elected.

“They are using additional appropriations as usual practice and so it makes this whole budget process an exercise in futility, when they are going to spend such a high percentage out of the premier’s office.”

Nova Scotia isn’t the only province facing an unprecedented deficit, as New Brunswick is in the same boat with a projected $1.33 billion deficit while British Columbia is expected to reach a record $13.3 billion deficit this year.

Nova Scotia’s 2026-27 budget will be released next week.

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