The picture of debt in Nova Scotia is a conflicting one for sure. Nova Scotia has one of the lowest debt loads in the country, both in total public debt, and debt per capita. And while the recession was certainly felt in this province, you can barely tell by looking at the total amount of debt the province had during that time. Nova Scotia’s debt load did peak briefly in 2010, but dropped the following year, showing signs of growth for the province. This year however, Nova Scotia’s debt climbed higher than it was even at the height of the recession. And it’s at this time that the province is spending the least amount in servicing that debt.
Nova Scotia’s total debt in 2012 was $13.2 billion – just slightly over the $13 billion in debt the province experienced in 2010. It was also $485.2 million higher than the previous year, due to the additional deficit the province piled on at that time.
The deficit in Nova Scotia is also very interesting, as within the past four years, they actually didn’t have one during 2008 and 2009 – the years that the recession was hitting all other areas of the country the hardest. But in fact, Nova Scotia actually saw surpluses these years. It wasn’t until 2010, when the rest of Canada started to show signs of recovery and growth, that Nova Scotia sank deep into the red, and piled on a $268.5 million deficit. Unfortunately, this year that number has gotten only very slightly better, as the province saw a $248.5 million deficit.
These numbers make the situation in Nova Scotia seem bad indeed, don’t they? And that’s where the conflicting portion of it comes in. When you turn away from the very general terms of total public debt, and the province’s deficit, and have a look at other stats, you see that it may not really be all that bad after all.
The net debt to GDP percentage is one of the measures that can more accurately predict how the province is doing. Not only does this percentage indicate the overall wealth of the province, but it also shows just how burdensome today’s debt is going to be for future generations. As you can see from the chart above, Nova Scotia has been fairly good at keeping its debt manageable for future generations, and has been working at significantly reducing this number over the past 15 years.
However, again there’s another contrasting picture being painted when you look at how well Nova Scotia is doing at paying back its debt, or rather looking at their debt servicing costs. In the early 2000s, the province was doing fairly well at repaying its debts consistently, which in the end helps bring the total amount of debt down. In 2011, at a time when the province’s debt was hitting an all-time high, and paying it off was more important than ever, the province paid less in debt servicing costs than they had when their debt was relatively low.
But wherever this province has even a hint of a gloomy cloud, it also has a silver lining, and this can be seen in the net debt per capita for the province. But here too, the news is somewhat conflicting.
That’s because the current debt per capita in Nova Scotia is $14,008 – which is right in line with Alberta’s debt per capita – the lowest in the country. However, this measure of economic well-being also shows how well residents of Nova Scotia are able to service their debt; and if the amount of debt they’re taking on is surpassing the amount of income they’re bringing in. Considering that this amount has been climbing steadily for the past four years, this actually isn’t good news for the province of Nova Scotia.
The picture of debt in Nova Scotia can certainly be considered to be a confusing one. On the one hand, their entire debt and debt per capita levels are fairly low when compared with the rest of the country. However, residents as well as the provincial government continue to dig themselves deeper in debt, and at a time when both are taking longer, and are less able, to pay it off. If Nova Scotia wants to see the prosperity and surpluses that they once did – especially during the recession, when they were one of the only provinces to see growth – they’re going to need to create strategies to get out of the debt they’re in, and reduce their spending in all areas drastically.
The biggest cities in Nova Scotia are:
Later on, we’ll be taking a look at each of these cities, and the picture of debt within them.