The high unemployment rate and stagnant minimum wage in Nova Scotia have contributed to the rise of poverty in the province. This has left a significant portion of the population struggling to meet their basic needs. A steep rise in housing costs over the past few years has exacerbated the issue. As such, 68% of food bank clients in the province live in rental housing. This rate is worst among the Atlantic provinces and points towards a larger issue with the cost of living and its impact on food insecurity. Rural residents face additional challenges because their geographic isolation makes it difficult to access services and opportunities.

Overall, Nova Scotia, like the other Atlantic provinces, is struggling because of a lack of jobs. It has not only one of the highest unemployment rates in the country but also one of the highest food insecurity and poverty rates.

As fewer people work, more rely on social assistance programs and a fragile social safety net. In Nova Scotia, 12% of the population receives EI, which is double the national average. Nearly a quarter (23%) of the population receives social assistance, which is the highest among the provinces. Additionally, 17% of the population receives housing benefits (second highest among the provinces).

Unfortunately, the social assistance system in Nova Scotia is not equipped to properly help those in need. Social assistance rates for employable single people do not equate to even 50% of the poverty line. This year, 53% of the population feel financially worse off than they did last year, and nearly two in five people who receive social support say that rates are not enough to help them keep up with the cost of living.

When looking at the high fixed costs for those living in the province, it is clear to see why individuals are struggling, regardless of whether they are working or receiving social assistance. Fixed costs for people on a low income are at their highest in Nova Scotia, where they are spending up to 66% of their income on costs beyond housing. Meanwhile, 35% of the province’s residents are spending more than 30% of their income on rent. This means that there are likely many people living in Nova Scotia who must spend more than 100% of their incomes just to pay for the bare necessities.

Demographic Considerations

Nearly 1 in 10 seniors in Nova Scotia live in poverty, the highest ratio among this age group in all of Canada. Although poverty rates for all groups have dropped in recent years, including for seniors, the poverty rate among people aged 65+ remains nearly two-thirds higher in Nova Scotia than the national average, a disparity that has actually increased on a relative basis since 2015.

Despite the small size of the province, many rural areas have little to no broadband infrastructure. Nova Scotia is in the bottom third in Canada for access to broadband: more than 15% of the province’s population is still without service. Post–COVID-19 access to high-speed Internet is as much about quality of life as it is a basic economic necessity, and in some cases it enables workers to pursue jobs and economic opportunities while living in economically isolated communities.

Nova Scotia is lagging behind many other provinces on the pathway out of poverty. It has no updated poverty reduction strategy and does not have a sufficient framework to eliminate poverty and low incomes in the province.

Data from this year’s survey shows that Atlantic Canada is suffering particularly badly when it comes to the housing crisis. To help address this issue, in October 2021, the government of Nova Scotia, under Premier Tim Houston, extended the existing 2% cap on rent increases until December 31, 2023.

Additionally, to reach the most affected individuals and families, the Government of Nova Scotia announced a support package in 2022 to help Nova Scotians with low incomes. Included in the deal were:

• • a one-time payment of $150 to all current income assistance recipients,

• • a one-time payment of $150 to everyone currently eligible to receive the Heating Assistance Rebate,

• • $1 million to Feed Nova Scotia to distribute among its 140 food banks province-wide, and

• • $200,000 to local food banks across the province (not affiliated with Feed Nova Scotia).

Nova Scotia’s 2023–2024 budget includes investments in affordable housing and supporting people experiencing homelessness, but the initiatives are unclear and insufficient. It is disappointing to see that it did not include any increase to social assistance rates for the second year in a row, despite the soaring cost of living. There were some investments in making life more affordable for families living on low incomes but given that Nova Scotia had the highest poverty rate in Canada in 2020, the 2023 budget falls short.

Poverty is becoming an increasingly pressing issue in the province, with 61% of residents witnessing an increase in poverty where they live. Moreover, 53% of people in Nova Scotia feel that they are worse off than they were a year ago. This is a higher proportion than in any other province.

Although the government has made some policy strides, it has not introduced a poverty reduction plan since 2009. To address the issue, policymakers should focus on modernizing their approach to meet the needs of today’s society.

Accountability

1. Introduce a new poverty reduction strategy, focusing in particular on poverty among seniors

Following the passage of Bill 94, Nova Scotia created its first poverty reduction strategy in 2009. Although this strategy set out a vision for reducing poverty by 2020, no new strategy has been introduced since. A new strategy is required to galvanize action to address remaining pockets of poverty, particularly among residents aged 65+. The prevalence of poverty among people over 65 years of age may be surprising to some, given Canada’s relatively strong track record in addressing seniors’ poverty in Canada since the introduction of the OAS/GIS. This reality check reinforces the need for a renewed poverty reduction strategy that addresses the needs of all residents.

2. Improving community-based health care for seniors

As part of a renewed focus on the needs of seniors, the poverty reduction strategy should examine how primary health care services can be leveraged in conjunction with income supports to improve aging at home and access to community services for seniors living on low incomes.

Given that the costs of care are a significant drain on household financial resources later in life, and are often associated with a rise in poverty among seniors after the age of 75, the province has an opportunity to examine how it can better support both poverty reduction and health care goals simultaneously.

3. Removing co-payments for provincial pharmacare programs

Further to the previous recommendation, the provincial government should waive co-payments for the seniors and family pharmacare programs. This will remove the dilemma a person may face between purchasing crucial medications and putting food on the table. This will have a notable impact, as a significant number of Nova Scotian food bank visitors are forced to spend less on food (56%) or leave prescriptions unfilled (50%) due to high prescription costs.

Reverse Benefits and Income Loss

4. Introduce tax indexation, indexing income brackets to inflation

Nova Scotia (along with Prince Edward Island) remains one of the only two provinces that do not index their tax brackets to inflation. Continued inaction on this front by successive governments constitutes a tax by stealth on low- and middle-income earners, a fact that has become particularly worrisome in recent years given elevated levels of inflation. Indexation should be introduced as a priority in the next provincial budget and extended to all provincial programs, for both revenue collection and credits and income supports.

5. Increase and amend the Poverty Reduction Credit

The Poverty Reduction Credit is a unique income support instrument in Canada in that, unlike most government programs at both the federal and provincial levels, it is specifically designed for people who have low incomes and do not have dependent children. This is a group most often forgotten in policy design, as governments tend to focus strongly on families. Although the credit has been periodically increased since it was first introduced in 2010, it has not been enhanced from its current level of $500 per year (delivered quarterly in payments of $125) with a cut-off at $16,000 in income per year. We recommend the province double the credit and index it to inflation going forward so that it continues to retain its purchasing power over time. A subsequent expansion of the credit to cover residents above the current cut-off of $16,000/year should be a priority focus of the province’s new poverty reduction strategy.

6. Reduce the claw-backs of the Nova Scotia Affordable Living Tax Credit (NSALTC)

The NSALTC currently provides a flat benefit of $255 for households, plus $60 per child, and is progressively clawed back on incomes above $30,000. Like the federal GST tax credit, the NSALTC has been implemented to help mitigate the costs associated with sales tax for the lowest earners. Given that the GST credit has already been increased three times federally since 2020 to help address affordability concerns during a period of high inflation, the province has an opportunity to reorient the NSALTC into a rental assistance benefit. In doing so, it would retarget the benefit specifically to renters, while expanding both the benefit amount and the earnings cut-off to support households with earnings slightly above the current threshold of $30,000 per year. This would provide potentially more meaningful and better targeted assistance with what is clearly one of the most pressing affordability challenges for residents on low incomes.

Infrastructure that Works for People

7. Expand broadband infrastructure

Nova Scotia should set the goal of closing the gap between itself and Quebec in terms of broadband coverage and access, with the goal of reaching 95% coverage within the next three years. This will require a combination of direct investment and tax-related support for telecom networks and distributors to make capital projects more affordable, along with a combination of regulatory changes to prioritize access for towers and wire in municipal and utility infrastructure corridors.