Goal 19

Net Debt to GDP - Deep Dive

Goal Status

checkmark icon to signify progressing Progressing On Track
Baseline: 36.9%
Current: 34.1%
Target: 30%

Historical and Comparative Context

In the first year after the baseline of 2012-13, this metric moved away from the target, rising to 38.2% in 2013-14. Then a steady pattern of reduction commenced in 2014-15. The 2016-17 figure was the first to fall back below the baseline level, with a further reduction occurring in 2017-18.

Looking back over the longer term, Nova Scotia has not had a net debt to GDP ratio at or below the target figure since 1991-92. After peaking in 1999-00 at 47.2%, there was generally steady progress in reducing the ratio until the financial calamity of 2008-09. From that point until the baseline year, the figure oscillated in the 35%-39% range.

RBC’s Canadian Federal and Provincial Fiscal Tables document (last updated in July 2019) provides debt-to-GDP time series for all provinces, taken from the relevant governments’ own fiscal publications.

Looking at the most recent actuals (2017-18), across the ten provinces the top spot goes to Alberta with a figure of 5.8%, while the highest (worst) ratio belongs to Newfoundland and Labrador at 44.4%. Nova Scotia ranks sixth among the provinces, up from the eighth spot in the 2012-13 baseline year.

Looking at the change from the baseline year to the most recent actual figures, Nova Scotia had the fourth-best record with an improvement of 1.8 percentage points. Quebec led the way with a drop of 8.6 percentage points; British Columbia and Prince Edward Island also posted decreases. The worst record went to Newfoundland and Labrador whose net debt to GDP ratio rose by 18.3 percentage points.


Forecast Accuracy

In order for the net debt to GDP ratio to improve, growth in GDP must exceed growth in net debt.

In the Government of Nova Scotia’s March 2019 budget, growing budget surpluses are estimated for each year out to 2022-23 and net debt is estimated to grow at a compound rate of approximately 1.1% over the 2018-19 to 2022-23 period. Nominal GDP is estimated to grow by a compound annual rate of 3.1% over the same period. These trends result in the estimated net debt to GDP ratio dropping to 31.6% by 2022-23.

As one broad point of corroboration for the Province’s forecasts, its outlook for growth in real GDP out to 2022 is generally in line with forecasts made by the Conference Board of Canada in its Spring 2019 Metropolitan Outlook. In fact, the Province’s forecasts are more conservative than those of the Conference Board.

Canada’s major banks also recently have released provincial economic forecasts. The Province’s figures are not out of line with these private sector forecasts.

  Real GDP Growth (%) Forecast Nominal GDP Growth (%) Forecast
Year Province Conference Board BMO CIBC RBC Scotiabank TD Province CIBC RBC Scotiabank TD
2018 0.9 1.1 1.2 1.0 1.2 1.2 1.2 3.0 2.7 2.2 3.2 2.6
2019 0.8 1.6 0.7 1.4 0.9 1.3 1.1 2.8 3.0 2.6 3.0 3.0
2020 0.9 2.2 0.7 1.2 0.9 1.3 1.2 2.9 3.2 2.6 3.3 3.1
2021 1.6 1.9           3.6        
2022 1.2 1.4           3.2        
2023   0.9                    

Given that we now have had four consecutive years of reductions in the debt to GDP ratio, that we have two consecutive figures on the right side of the baseline, that the Province forecasts continued steady progress, and that external forecasts do not present contradictory findings, this metric can continue to be designated as Progressing and On Track.


  • The headline indicator was changed to the figure reported annually in the Nova Scotia Public accounts. The 2012-13 baseline figure was amended due to revisions in historical nominal GDP data. Other figures have been updated due to the availability of new data.