Layoffs coming ‘across the board’ as province prepares deficit budget

Cuts are coming to public sector jobs, Premier Tim Houston said, as his provincial government prepares to table its fifth deficit budget in the coming weeks. 

Houston delivered the keynote speech at the Nova Scotia Progressive Conservative Annual general meeting last week, telling a crowd of 450 that his government is looking to do more with less. 

“There will be a deficit, and it will be big.”

Houston couldn’t confirm when the budget would be tabled, but indicated it would not be the first day back in the house.

In January, he said the 2025-26 fiscal year deficit reached a record $1.4 billion, exceeding the $697 million deficit projected last spring. 

Houston promised cuts to curtail spending despite the deficit.  

“Government itself must feel the impact first,” Houston said in his speech. “Then, and only after the work has been done there within government, programs will feel it next, and there will be impacts there as well.”

Following his speech, Houston told reporters the budget will affect the size of government, bringing layoffs “across the board,” but didn’t say how many jobs would be cut. 

“We’re definitely looking at the size of the civil service. No question about that.”

He said the government doesn’t want to affect programs and services, which is why spending reductions are starting with layoffs, but because of “the reality of the situation,” Houston said programs will also face cuts. 

“We want to make sure that we maintain the services, we maintain the support for Nova Scotians. It’s a difficult time. We have to invest in Nova Scotians and be there for them.” 

Houston said the government wants to be open about its financial situation and not surprise Nova Scotians on budget day.  

“We’re trying to be up front with people that these are difficult times for households. They’re also difficult times for governments.” 

The deficit comes as government tries to do “more than we can,” to support Nova Scotians in tight financial times, said Houston.

Halifax has the widest affordability gap — between average home prices and what the typical household can afford — of any major metropolitan city in Canada, according to an October 2025 housing report from the parliamentary budget officer, the federal government’s fiscal watchdog. 

Nova Scotia’s food prices increased more than the national average in 2025, according to Canada’s Food Price Report 2026 from Dalhousie University’s Agri‑Food Analytics Lab, and are also expected to increase more than the national average in 2026.  

“We’re running a deficit because in tough times, you defend people first,” said Houston.

The premier said the budget will prioritize investment in “core areas” like natural resources. 

“To keep defending our way of life, we need the revenue that comes from developing our own natural resources,” Houston said. “Our natural resources are key to our path to prosperity.”

In December, the province tapped Dalhousie University to administer a $30-million research program to identify locations in Nova Scotia for onshore natural gas drilling. The $30-million expense was not included in last year’s budget. This comes after the province lifted a decade-long ban on fracking in March 2025. 

The premier said the government won’t stop at onshore natural gas drilling, highlighting the call for offshore drilling bids that opened last July. 

“The potential is massive; there could be 150 trillion cubic feet offshore and over a billion barrels of oil,” Houston said. “Some experts believe that Nova Scotia has more oil and gas today than Alberta has left.” 

Houston repeatedly stressed his desire to develop the province’s resources to increase its self-reliance. 

“Imagine what Nova Scotia looks like when these resources are being developed. We are ready to be that engine room for the entire country again.”