Nova Scotia credit rating downgraded amid deficit concerns

S&P Global downgraded Nova Scotia’s long‑term issuer credit from AA‑ to A+ and its senior unsecured debt from AA‑ to A+ on February 1, 2026. The decision follows Premier Tim Houston’s warning that the province’s deficit could exceed $1.4 billion. While the downgrade still places the province in the “strong” category, the outlook is negative and the report expects higher spending to push deficits past expectations through fiscal 2029. Finance Minister John Lohr is preparing the 2026‑27 budget amid concerns over health‑care, senior‑care, wage and disaster‑relief costs. Despite the downgrade, bond demand remains high and borrowing costs have not risen sharply. Positive notes include the suspension of Chinese lobster tariffs and planned investment in natural‑resource projects.