Nova Scotia's HST will be reduced to 14 per cent next year: provincial government

The Nova Scotia government says it plans to reduce the province's harmonized sales tax (HST) rate by one percentage point next year.

The province's HST combines the provincial value-added tax with the federal goods and services tax (GST), and it is applied to the same types of goods and services.

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“We’re always looking for ways to provide relief to Nova Scotians. Now, in addition to indexing the personal income tax, we’re lowering the HST rate to help people who are struggling with the cost of living and additional taxes from the federal government,” said Nova Scotia Premier Tim Houston in a news release.

“This will be the largest tax break in Nova Scotia’s history. It’s the first time in 14 years that a provincial government in Nova Scotia has made changes to the sales tax. And this time it will be a decrease.”

The federal portion is five per cent. On April 1, 2025, the province says the provincial portion will decrease from 10 to nine per cent.

The new HST rate will be 14 per cent once the reduction is made.

Nova Scotia's HST rate was last changed 14 years ago by the NDP government led by Darrel Dexter. At that time, the rate was increased by two per cent, bringing it to 15 per cent.

Nova Scotia NDP leader Claudia Chender says the reduction won't benefit all Nova Scotians.

"People will probably welcome the promise of a tax cut. What we saw here, I think, was a stump speech and I think that the challenge of the one per cent HST is that it benefits the people who buy the most," said Chender.

In February, Liberal leader Zach Churchill said he would cut the HST by two per cent if elected – a promise he still stands by today.

"The province can afford to do this now and this will double the affordability impact on families. So, we are still committed to that," said Churchill.

"I think working families are struggling to make ends meet right now, young people coming up are very worried about the cost of living in Nova Scotia and seniors are having a hard time making ends meet right now."

According to the province, a one per cent drop in the HST is expected to reduce provincial revenues by about:

• $260.8 million in the 2025-26 fiscal year
• $265.5 million in 2026-27 fiscal year
• $272.4 million in 2027-28 fiscal year

Business professor Ed McHugh says the $260 million in savings provincewide seems like a lot but on an individual basis, a one per cent drop isn't going to make much of a difference.

"This is not going to change any spending habits. This won't change any consumer behaviour. There are people though who are struggling, and I get that," said McHugh.

Starting Jan. 1, 2025, the province says it will also index personal income tax brackets and credits, saving Nova Scotians more than $160 million in taxes annually by 2028.

According to the provincial news release, HST is the second largest provincial revenue source behind personal income tax, accounting for about $2.7 billion and 17.1 per cent of total revenues.

For more Nova Scotia news visit our dedicated provincial page.