Press Release

DBRS Morningstar Confirms the Ratings on Province of Nova Scotia at A (high) and R-1 (middle), With Stable Trends

Sub-Sovereign Governments, Utilities & Independent Power, Other Government Related Entities
November 19, 2021

DBRS Limited (DBRS Morningstar) confirmed the Issuer Rating and Long-Term Debt rating of the Province of Nova Scotia (Nova Scotia or the Province) at A (high) and confirmed the Province’s Short-Term Debt rating at R-1 (middle). Concurrently, DBRS Morningstar confirmed the Guaranteed Long-Term Debt and Guaranteed Short-Term Debt ratings of the Nova Scotia Municipal Finance Corporation at A (high) and R-1 (middle), respectively, and the Nova Scotia Power Finance Corporation's Series AM Government Guaranteed Debt at A (high). All trends are Stable.

With a new majority Progressive Conservative provincial government following the August 17, 2021, election, the next number of years will see increased investments in priority sectors, such as healthcare, affordable housing, and education. While fiscal sustainability and debt reduction will likely remain priorities for this government, capital pressures and the need to find cost savings within existing operations will weigh on the medium-term outlook. Notwithstanding new investments, the Province expects to achieve balanced budgets over the next five years (previously four years).

Based on the latest forecast update (September 2021), the Province is anticipating a deficit of $444.5 million in the 2021–22 fiscal year, compared to an originally budgeted shortfall of $584.9 million. This equates to a DBRS Morningstar-adjusted deficit of $1.2 billion (or 2.4% of GDP). While debt is expected to rise, driven by the operating shortfall and capital needs, the pace remains slower than previously anticipated. DBRS Morningstar now expects adjusted debt-to-GDP to remain below 40.0% through the medium-term. At this level, DBRS Morningstar notes that there continues to be flexibility within the current ratings to accommodate any ongoing uncertainty in the medium term fiscal and debt outlook.

Despite this uncertainty, the economic outlook remains supported by accelerated vaccine rollouts, significant supports for households and businesses over the past several months, economic reopening and recovery, and gradually improving consumer sentiment. The September 2021 forecast update suggests that real GDP will grow by 3.5% in 2021 and moderate to 2.4% in 2022.

While unlikely, a positive rating action could arise from sustained economic revival/growth and demonstrated fiscal sustainability and debt reduction over multiple years. Downward pressure on the rating, albeit unlikely, could arise from a sustained deterioration in fiscal performance and material increase in debt beyond current expectations, in conjunction with deterioration in critical risk factors.

A description of how DBRS Morningstar considers ESG factors within the DBRS Morningstar analytical framework can be found in the DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings at

All figures are in Canadian dollars unless otherwise noted.

The principal methodology is Rating Canadian Provincial and Territorial Governments (May 3, 2021;, which can be found on under Methodologies & Criteria. Other applicable methodologies include the DBRS Morningstar Criteria: Guarantees and Other Forms of Support (May 31, 2021;, and DBRS Morningstar Criteria: Approach to Environmental, Social, and Governance Risk Factors in Credit Ratings (February 3, 2021;

The related regulatory disclosures pursuant to the National Instrument 25-101 Designated Rating Organizations are hereby incorporated by reference and can be found by clicking on the link under Related Documents or by contacting us at

The rated entity or its related entities did participate in the rating process for this rating action. DBRS Morningstar had access to the accounts and other relevant internal documents of the rated entity or its related entities in connection with this rating action.

Generally, the conditions that lead to the assignment of a Negative or Positive trend are resolved within a 12-month period. DBRS Morningstar trends and ratings are under regular surveillance.

DBRS Morningstar will publish a full report shortly that will provide additional analytical detail on this rating action. If you are interested in receiving this report, contact us at

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