Government Spending Has Increased 43% Since 2020-21 – Auditor General
For release January 13 – Nova Scotia’s annual spending has grown steadily since 2021-22 and is now $18 billion annually, up $5.4 billion and 43 per cent, Auditor General Kim Adair says in her 2025 Financial Report.
Nova Scotia’s net debt is also growing. Even with a history of recent surpluses including the audited $265 million surplus, the Province’s net debt is up $1.7 billion from the previous year and was $20.8 billion at the end of fiscal 2024-25.
“A trend of increased net debt weakens a government’s financial position because more of its future revenues will be needed to pay its past debts. That could negatively impact the ability to provide provincial services without resorting to additional borrowing,” Adair says.
Key to the $1.7 billion increase in the year’s net debt were the capital investments in various health facility projects, including $361 million in the Halifax Infirmary Expansion and $146 million for Cape Breton Healthcare Redevelopment. There was also an investment of $325 million for the province’s long-term care facilities including nursing homes.
Service agreements with the nursing home operators, worth $15.7 billion at the end of 2024-25, are one of the major contributors to an increase in Nova Scotia’s contractual obligations, also known as spending commitments. Over the past five years, Nova Scotia’s total future spending commitments have continued to increase, growing from $9.8 billion in 2020-21 to $29.7 billion in 2024-25.
Nova Scotia’s unmatured debt, which now stands at $19.3 billion, is also increasing. Paying down debt will take up a significant portion of the province’s revenues in both the short and long term.
The interest on debt for 2024-25 was $756 million, an increase of $207 million from the five-year low of $549 million in 2021-22. Those debt servicing costs currently stand at $810 per Nova Scotian, the highest of the past five years.
The Auditor General continues to caution that significant uncertainty has impacted the Province’s revenue estimates.
“Total revenue has exceeded the budgeted amount for four of the past five years by $5.8 billion and the Province appears to have used the increased revenue to advance additional spending.”
The Auditor General has been highlighting additional appropriation spending in the annual Financial Report since 2022.
Over the last five years, the Province has spent $6.7 billion in this over-budget spending, with $1.6 billion in 2024-25 alone.
“Although I noted accountability and transparency around over-budget spending improved slightly this year, I am concerned that important recommendations remain unaddressed,” said Adair.
The Annual Financial Report has two chapters and provides insights into topics of interest impacting the Province including:
Healthcare Costs Up Over Five Years: Nova Scotia’s annual healthcare operating expenses were $7.7 billion in 2024-25, an increase of $2.4 billion over the last five years
Tobacco Settlement: The Province may receive up to $784.8 million over 20 years from Canadian tobacco companies to help offset costs of smoking on the healthcare system
The Province Purchased $117 Million of Receivables from Nova Scotia Power: To ease rising electricity rates and prevent a significant rate increase for customers, the Province spent $117 million to purchase receivables from the utility
Impact of Removing Bridge Tolls: Annual toll revenue of roughly $25-37 million is no longer being collected; Province is now responsible for future capital and operating expenses for both Halifax Harbour bridges, which averaged $29 million a year for the past five years
Government Received a Clean Audit Opinion on its Financial Statements: The Government provided reliable financial information for 2024-25 within the legislated deadline. For the 25th year in a row, the Province of Nova Scotia received a clean audit opinion. That audit opinion means that the decision makers in Government, and all Nova Scotians, have assurance that they can rely on the financial statements.
While the financial statements are reliable and many processes work well, underlying significant control weaknesses at two Government departments and two Government organizations need to be fixed. Significant control weaknesses increase the risk of unreliable financial reporting and misuse of assets in the future.