N.S. government departments told to examine potential impact of 10% cut to program grants

In the face of a projected record deficit, Finance Minister John Lohr has asked provincial government officials to look at the potential impacts of a 10 per cent cut to discretionary spending and program grants.

Lohr confirmed the directive to deputy ministers during an interview Friday.

“We will be looking at impacts to our most vulnerable Nova Scotians, we’ll be looking at the impacts to front-line services. That being said, we know we need to cut spending,” he said.

Although Lohr said there are signs of positive GDP growth for the province, the minister said government officials “remain very concerned” about the projected deficit of $1.2 billion.

Lohr said final decisions would only be known when the 2026-27 provincial budget is complete.

It’s the second potential spending reduction measure Lohr announced this week, following word that departments have been told that for each job vacancy they fill, they must remove one from their budget.

NDP finance critic Lisa Lachance said the latest news is disappointing but not surprising.

“We’ve been really concerned about how the Houston government has been spending money.”

Lachance pointed to increasing use of untendered contracts by the PCs along with annual out-of-budget spending that has topped $1 billion year over year.

Although there were several years when the government was the beneficiary of record population growth and increased tax revenue that went along with that, Lachance said the government seemed to treat that money as though it would never dry up.

“You don’t start expanding government spending based on tenuous growth.”

Now that population growth has all but stalled, Lachance said the government finds itself in a problem of its own making, adding that it seems clear vulnerable people will be affected.

“We’ve already seen that happen with the heating assistance rebate program where the amount went down, the qualifying income level went up and 40,000 people were cut off from that program this year.”

Speaking to reporters on Thursday, Liberal MLA Iain Rankin said the Progressive Conservatives appear to be in a structural deficit of their own making due to program spending that outstripped the province’s means.