Letters to Provinces and Territories: Nova Scotia 2021

Dear Deputy Premier MacMaster:

Since the pandemic began, the federal government has invested $511.6 billion – nearly a quarter of Canada’s GDP – to support Canadians.  The federal government took on this responsibility because, when the pandemic began, there was concern about whether provinces had the fiscal space needed to support Canadians through the crisis.

The federal government invested nearly $20 billion through direct transfers like the Safe Restart Agreement, $2 billion through the Safe Return to Class Fund, and provided $4.5 billion through top-ups to the Canada Health Transfer to support health care systems and $1 billion for vaccine rollouts as part of the response to the pandemic.  The government also invested $2.2 billion to top up the Canada Community-Building Fund in 2020-21, along with other direct transfers to the provinces and territories.  Furthermore, federal income and business support measures have protected provincial and territorial revenues, with revenues higher due to federal investments to stabilize incomes, protect jobs, and prevent business closures, therefore protecting the tax base and limiting deficits and debt.

I write you today regarding Nova Scotia’s transfer payment amounts for 2022-23.  In accordance with the Federal-Provincial Fiscal Arrangements Act (the Act) and relevant regulations, total major transfers to Nova Scotia for 2022-23 will round to $4,048 million, an increase of $215 million from 2021-22. The first estimates of your province’s Canada Health Transfer and Canada Social Transfer payments for 2022-23 are $1,175.4 million and $414.4 million respectively.  In accordance with the legislated formula under the Act and its regulations, your province’s Equalization payment for 2022-23 will be $2,458.4 million.

As you are aware, Budget Implementation Act, 2021, No. 1. amended the Nova Scotia and Newfoundland and Labrador Additional Fiscal Equalization Offset Payments Act to extend the authority to make additional fiscal equalization offset payments to your province for any fiscal year between April 1, 2020 and March 31, 2023. Nova Scotia is currently eligible for a Fiscal Equalization Offset Payment of $47.8 million for 2022-23, which is the final year of this Arrangement.

Enclosed for your information is a table presenting the 2022-23 major transfer amounts for each province and territory. The table will be provided to your officials and posted on the Department of Finance’s website in December 2021.

I look forward to continuing to work collaboratively with you to serve and support Canadians.

Yours sincerely,

The Honourable Chrystia Freeland, P.C., M.P.