Nova Scotia’s 2025-26 budget includes tax cuts for small businesses, an increased minimum wage, and investments in workforce development, measures that could have a direct impact on employers across the province.
Finance and Treasury Board Minister John Lohr tabled the budget on February 18, outlining $500 million in tax reductions and a range of spending commitments, including the province’s largest-ever capital plan at $2.3 billion. The budget projects a $697.5 million deficit.
Among the most notable changes for employers is a reduction in the small business tax rate from 2.5 per cent to 1.5 per cent, effective April 1. The small business income threshold will also increase from $500,000 to $700,000.
“This will provide relief for small businesses and allow them to reinvest in their operations,” Lohr said.
The province will also raise the minimum wage from $15 to $15.70 on April 1, followed by another increase to $16.50 on October 1. The move follows recommendations from the Nova Scotia Minimum Wage Review Committee.
Employers in the skilled trades, healthcare, and film and video industries may also benefit from an extension of the More Opportunity for Skilled Trades (MOST) tax refund program. The government is allocating $30.1 million to continue providing tax refunds to workers under the age of 30 in high-demand occupations.
Other workforce investments include $35 million to help businesses create green jobs under Nova Scotia’s Climate Change Plan for Clean Growth, and $39 million to support the province’s film industry, including $14 million for the Washington Black television series.
On the affordability front, the budget introduces several tax reductions, including a one per cent cut to the Harmonized Sales Tax (HST) starting April 1, 2025, and an increase in the basic personal amount to $11,744. The province estimates that the tax changes will save an average Nova Scotian family more than $1,000 this year.
The government is also providing a rebate of the provincial HST on new purpose-built rental housing for projects that began construction after September 14, 2023, and will be completed by the end of 2035. The measure is expected to cost $54.1 million in 2025-26.
Healthcare investments include $750.9 million for the Halifax Infirmary expansion and Cape Breton Regional Municipality Health Care redevelopment projects, along with $54 million for mental health and addiction services.
Nova Scotia’s employers will need to assess how the budget’s tax changes, wage increases, and workforce investments impact their operations. While the tax cuts may offer some relief, rising wages and increased spending in key industries could also shape hiring and business strategies in the coming year.
