The financial landscape across Nova Scotia’s municipalities has strengthened considerably, with 47 of 49 local governments now operating from positions of financial health, according to the province’s 2024 Financial Condition Index report released Tuesday.
This marks a significant recovery from pandemic-era financial challenges that saw many communities struggling with revenue shortfalls and unexpected expenditures. The comprehensive assessment, conducted annually by the Department of Municipal Affairs, evaluates municipalities across 15 key financial indicators.
“We’ve watched municipal leaders make difficult but necessary decisions over the past three years,” said John MacDonald, Municipal Affairs Minister, during a news conference in Halifax. “Their financial discipline is now paying dividends for residents across the province.”
The report shows particular improvement in tax collection rates, which had fallen during the economic uncertainty of 2020-2021. All but three municipalities now meet or exceed the provincial benchmark for uncollected taxes, indicating stronger fiscal management and improved economic conditions for ratepayers.
Cape Breton Regional Municipality, which faced significant financial pressures during the pandemic, demonstrated notable improvement. Mayor Amanda McDougall credited their recovery to strategic budget management and targeted economic development initiatives.
“We implemented a community-first recovery approach that balanced essential services with careful spending,” McDougall said in a telephone interview. “The results show that even our most challenged communities can build financial resilience when we focus on fundamentals.”
The findings represent more than abstract financial metrics. For residents of communities like Truro, the improved financial position translates to tangible benefits. The town, which achieved across-the-board improvements in its financial indicators, recently announced it would avoid a planned tax increase while expanding community programming.
“When municipalities operate from financial strength, it creates a positive cycle,” explained Dr. Melanie Howard, Associate Professor of Public Administration at Dalhousie University. “They can invest in infrastructure, respond to emergencies, and provide consistent services without constant financial stress.”
The provincial assessment evaluates municipalities on indicators including debt servicing, reserve strength, and budgetary performance. Only the towns of Mulgrave and Shelburne continue to show financial warning signs across multiple metrics, though both have improved from previous assessments.
Financial challenges remain despite the positive trend. Housing affordability pressures, inflation, and climate adaptation costs continue to strain municipal budgets. The Union of Nova Scotia Municipalities estimates infrastructure needs across the province’s communities exceed $2.1 billion over the next decade – far beyond current capital budgets.
Provincial data from Statistics Canada shows municipal tax rates in Nova Scotia remain among the highest in Atlantic Canada, reflecting ongoing pressure to balance service delivery with affordability concerns. The average residential property tax bill increased 3.2% in 2023, slightly outpacing inflation.
“The report shows promising financial management, but it doesn’t necessarily mean municipalities have the resources they need for long-term planning,” cautioned Paul Bennett, Director of the Schoolhouse Institute and municipal affairs commentator. “Many are still one major infrastructure failure away from financial strain.”
Several municipalities have leveraged their improved financial positions to accelerate infrastructure investments. Yarmouth recently announced a five-year capital plan focused on climate adaptation, while Kentville has expanded its asset management program to extend infrastructure lifespan.
Rural communities showed particular improvement in reserve funds, with 29 of 31 rural municipalities now meeting provincial benchmarks for savings – a key indicator of preparation for emergencies and future capital needs.
“Our council made building reserves a priority even when it wasn’t popular,” said Warden Vernon Pitts of Guysborough. “Today, we’re able to match federal infrastructure dollars and respond to community needs without borrowing for every project.”
The provincial government has indicated the strong municipal financial performance could influence future funding formulas and support programs. Discussions are underway regarding potential adjustments to the Municipal Financial Capacity Grant program, which provides equalization payments to communities with limited tax bases.
Financial experts note that while the overall trend is positive, individual community circumstances vary widely. Coastal communities face mounting climate adaptation costs, while rural areas continue addressing service delivery challenges across aging infrastructure networks.
“What these numbers really tell us is that Nova Scotia’s municipal leaders have become more sophisticated financial managers,” said Howard. “They’re making tough choices within limited resources, and most are finding sustainable paths forward.”
The full Financial Condition Index report is available on the provincial government website, allowing residents to review detailed metrics for their communities and compare performance against provincial benchmarks.
