This policy brief highlights what the 2023 budget means for Nova Scotia’s digital economy. The province’s annual budget is published in the spring of each year and outlines the government’s main spending priorities.

Nova Scotia’s 2023 budget, tabled on March 23rd, made headlines for its predominate focus on fixing the province’s healthcare system. In addition to a $6.5 billion investment to implement the province’s multi-year roadmap to world-class healthcare, the budget proposes smaller investments in Nova Scotia’s economic development, workforce, social services, and affordability.

Economic Update

Overall, the province of Nova Scotia has made clear its top spending priority will be healthcare for the 23-24 fiscal year. As a result, the province is predicting a budget deficit. The deficit is driven by the investments in improving healthcare, but also by changing economic conditions such as rising interest rates to combat inflation. One of the larger trends affecting the provinces revenues and expenses is the increased rate of migration from other provinces. The rising population is accelerating economic growth and contributing to revenues through income and sales taxes. However, increasing macroeconomic certainty has the potential to reduce consumer spending, and the province will also see increased social expenditures, like healthcare, as a result of the rising population. The province recognizes that the ongoing labour shortages have the potential to drastically increase the cost of its projects, which can result in a larger deficit or result in the cancellation of projects. Skilled workers and immigration are therefore an important focus of the budget, which provides upwards of $46 million towards immigration and workforce and skills development.

Policy and Programs to Support Nova Scotia’s Digital Economy

With such a strong focus on the province’s healthcare system, it is unsurprising Budget 2023 earmarks specific funds to advance digital health. Namely, the province proposes to invest: $15 million to improve emergency care, including using virtual emergency care to reduce emergency wait times, $2 million to expand access to virtual mental health care services, $2.8 million to test mobile simulation training, $3.9 million for digital healthcare projects, $426,000 to launch the Artificial Intelligence Centre of Excellence, and $1 billion for electronic health records. Canada-wide, digital transformation is driving increased competition for digital roles in health. For the proposed projects to be successful, the province will need to expand the number of digital workers who are familiar with and available to work on health-related projects. Strategic procurement can also provide growth opportunities to local health tech companies while moving the dial forward on digital health.

Like health, digital transformation is rapidly changing Canada’s kindergarten to grade 12 education systems. Notably, Budget 2023 proposes to spend $6 million to refresh technology purchases in Nova Scotia classrooms, such as providing new Chromebooks to kindergarten to grade 12 students.

Clean energy and clean technology are also a core focus of the 2023 Budget. Currently, Nova Scotia relies heavily on coal, petroleum, and natural gas to produce electricity for the province: offshore wind and hydrogen projects represent a significant opportunity for the province to transition away from fossil fuels toward clean energy and clean electricity production. Accordingly, the budget proposes to invest:

  • $760,000 in offshore wind and hydrogen production studies
  • $41.4 million to move forward Nova Scotia’s Climate Change Plan for Growth, including more energy efficiency, clean energy, renewable energy, and green hydrogen projects, funding to help farmers adopt solar energy, consumer rebates for zero-emissions vehicles, and funding to support research in battery technology
  • $2 million to grow Nova Scotia’s EV charging network
  • $15 million to support infrastructure projects, including green transit

Supporting EDI and Workforce Development

As discussed, Budget 2023 reserves upwards of $46 million for workforce development and immigration, and a large portion of this funding is dedicated specifically to skilled trades. This includes $20.9 million to deliver a tax refund to eligible skilled trades and film and TV workers in the province, $13.2 million to help small to medium sized businesses hire first-year apprentices in Red Seals trades, and nearly $1 million to modernize Nova Scotia’s Apprenticeship system. In terms of digital skills, Budget 2023 earmarks $3.4 million for Mitacs to create up to 3,200 more paid internship opportunities for post-secondary students, as well as additional funding to expand the Digital Skills to Succeed Program.

Protecting the Environment

Due to mismanaged waste from pulp mills, mining, and other polluting activities, Nova Scotia currently faces contaminated waterways, threatening environmental and human health. This budget plans to address some of these concerns, with $53 million being allocated to remediating abandoned mining sites, and $38.5 million for the remediation of Boat Harbour (polluted by untreated wastewater from pulp mill activities).

With climate change, hurricanes continue to increase in frequency and force, with damage from the 2022 Hurricane Fiona persisting. As such, this budget allocates $6.0 million for Hurricane Fiona cleanup, and $10.8 million for Hurricane Fiona damage repair. These investments are in addition to prior emergency relief investments made in the Fall of 2022. With changing climate dynamics increasing the intensity of such events, Nova Scotia warns that 2023/2024 could face surplus spending for emergency relief, once again.

While emergency relief is necessary, continuously overspending for the relief of weather events may become unsustainable for the province. To create a prosperous economy, the government should shift its focus to climate adaptation to limit the effects of future weather events.

Luckily, Nova Scotia is taking steps in the right direction, with $41.4 million being allocated to Nova Scotia’s Climate Change Plan for Growth. As discussed, this plan prioritizes energy efficiency, fossil fuel divestment, clean energy investments, infrastructure for electric vehicles, flood mitigation measures and wetland restoration. This plan will also enable Nova Scotia to connect and stay competitive with both domestic and international climate change initiatives, as well as support their commitment to their climate pledges.

Connecting with International Markets

The Nova Scotia Government continued its commitment to attracting foreign direct investment in film and TV production. The Film and TV Production Incentive Fund is set to receive $14 million more in funding from the federal government for a total of $39 million for the program. Also, $3 million in funding was announced to further support initiatives for energy and resource development, which will support the export development potential of the sector and foreign collaboration initiatives. Lastly, $1.8 million will be allocated to support the development of high-growth businesses and entrepreneurs, enhancing their scalability and access to international market opportunities.

This brief is part of ICTC’s policy updates series. ICTC provides timely updates on policy and political developments in Canada, including federal, provincial, and territorial elections campaigns, fall economic updates, annual budgets, and other major updates to policy and programs. Written by Allison Clark, Erik Henningsmoen, Mairead Matthews, Mansharn Toor, Justin Ratcliffe, and Todd Legere, with generous support from the ICTC Research and Policy Team.