Province Of Nova Scotia 18-K Annual report (foreign governments)

Exhibit 99.1

Province of Nova Scotia

(Canada)

This description of the Province of Nova Scotia is dated as of December 6, 2019, and appears as Exhibit (1) to the Province of Nova Scotia’s Annual Report on Form 18-K to the U.S. Securities and Exchange Commission for the fiscal year ended March 31, 2019.

This document (otherwise than as a prospectus contained in a registration statement filed under the Securities Act of 1933) does not constitute an offer to sell or the solicitation of an offer to buy any Securities of the Province of Nova Scotia. The delivery of this document at any time does not imply that the information herein is correct as of any time subsequent to its date.

TABLE OF CONTENTS

	Page
Further Information		2
Forward-Looking Statements		3
Summary		4
Map of Nova Scotia		5
Introduction
Overview		6
Political System		6
Constitutional Framework		6
Economy
Principal Economic Indicators		8
Recent Developments		10
Economic Structure		11
Population and Labor Force		12
Income and Prices		14
Capital Expenditures		15
Goods Producing Industries		16
Exports		18
Service Sector		22
Energy		24
Government Finance
Overview		25
Specific Accounting Policies		25
Summary of Budget Transactions and Borrowing Requirements		28
Revenue		29
Program Expenditures/Expenses		33
Loans and Investments		36
Provincial Debt
Funded Debt		37
Derivative Financial Instruments		38
Debt Maturities and Sinking Funds		38
Current Liabilities		41
Guaranteed Debt		41
Pension Funds		42
Public Sector Debt
Public Sector Funded Debt		45
Certain Crown Corporations and Agencies
Sydney Steel Corporation and Sydney Tar Ponds Agency		46
Nova Scotia Municipal Finance Corporation		46
Nova Scotia Power Finance Corporation		46
Foreign Exchange		47
Official Statements
Table 1 – Statement of Debentures Outstanding		49

FURTHER INFORMATION

        This document appears as an exhibit to the Province of Nova Scotia’s Annual Report to the U.S. Securities and Exchange Commission (“SEC”) on the Form 18-K for the fiscal year ended March 31, 2019. Additional information with respect to the Province of Nova Scotia is available in such Annual Report, the other exhibits to such Annual Report, and in amendments thereto. Such Annual Report, exhibits and amendments are available on the SEC’s website at http://www.sec.gov. Copies of such documents may also be obtained, without charge, from Province of Nova Scotia, Department of Finance & Treasury Board, Deputy Minister of Finance & Treasury Board, PO Box 187, 7th Floor, 1723 Hollis Street, Halifax, Nova Scotia, Canada, B3J 2N3.

        In this document, unless otherwise specified or the context otherwise requires, all dollar amounts are expressed in Canadian dollars. On December 3, 2019, the rate for the U.S. dollar in Canada, as reported by the Bank of Canada, expressed in Canadian dollars, and was $1.3302. See “Foreign Exchange” for information regarding the rates of conversion of U.S. dollars and other foreign currencies into Canadian dollars. The fiscal year of the Province of Nova Scotia ends March 31. “Fiscal 2019” and “2018-2019” refers to the fiscal year ending March 31, 2019, and unless otherwise indicated, “2018” means the calendar year ended December 31, 2018. Other fiscal and calendar years are referred to in a corresponding manner. Any discrepancies between the amounts listed and their totals in the tables set forth in this document are due to rounding.

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FORWARD-LOOKING STATEMENTS

This exhibit includes forward-looking statements. The Province of Nova Scotia has based these forward-looking statements on its current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties, and assumptions about the Province of Nova Scotia, including, among other things:

• the Province of Nova Scotia’s economic and political trends; and

• the Province of Nova Scotia’s ability to control expenses and maintain revenues.

In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this annual report might not occur.

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SUMMARY

The information below is qualified in its entirety by the detailed information provided elsewhere in this document.

PROVINCE OF NOVA SCOTIA

Economy	Year Ended December 31
	2014			2015			2016			2017			2018
	(in millions unless otherwise indicated)
Gross Domestic Product at Market Prices	$	39,838		$	40,701		$	41,599		$	42,930		$	44,354
Household Income.		38,701			39,932			40,223			41,821			43,131
Capital Expenditures(1)		3,423.4			3,467.2			3,982.1			4,197.1			4,152.8
Annual Increase in Consumer Price Index		1.7	%		0.4	%		1.2	%		1.1	%		2.2	%
Population by July 1 (in thousands)		938.5			936.5			942.8			950.4			959.5
Unemployment Rate		9.0	%		8.6	%		8.3	%		8.4	%		7.5	%
Revenues and Expenses – Consolidated Entity	Fiscal Year Ended March 31
	2015			2016			2017			2018			2019
	(in millions)
Revenues	$	10,310.5		$	10,549.8		$	10,835.5		$	11,590.8		$	11,485.5
Current Expenses		10,805.6			10,950.8			11,078.9			11,749.9			11,754.8
Surplus (Deficit) from Governmental Units		(495.1	)		(401.0	)		(243.4	)		(159.1	)		(269.3	)
Net Income from Government Business Enterprises		351.4			387.8			394.6			385.4			389.2
Provincial Surplus/(Deficit)	($	143.7	)	($	13.2	)	$	151.2		$	226.3		$	120.0
Public Sector Funded Debt	As at March 31
	2015			2016			2017			2018			2019
	(in millions unless otherwise indicated)
General Revenue Fund Funded Debt	$	15,925.5		$	15,942.1		$	15,639.4		$	16,104.4		$	16,155.3
Miscellaneous Debt		8.0			10.1			10.0			11.7			7.8
Sub Total		15,933.5			15,952.3			15,649.4			16,116.1			16,163.1
Total Guaranteed Debt		124.0			118.3			205.4			162.1			98.2
Total Consolidated Entity Funded Debt		16,057.5			16,070.5			15,854.8			16,278.3			16,261.3
Less: Sinking Funds, Public Debt Management Fund		2,675.8			2,595.8			2,712.5			2,835.4			2,768.0
Net Public Sector Funded Debt	$	13,381.7		$	13,474.8		$	13,142.3		$	13,442.9		$	13,493.4
Per Capita ($)	$	14,258.6		$	14,388.4		$	13,939.7		$	14,140.0		$	14,057.1
As a Percentage of:
Household Income(2)		34.6	%		33.7	%		32.7	%		32.1	%		31.3	%
Gross Domestic Product at Current Market Prices		33.6	%		33.1	%		31.6	%		31.3	%		30.4	%

(1) Methodology used to calculate Capital Expenditures was revised in 2015 and adjusted for all included periods. Housing has been excluded in the new methodology since the primary goal of the program is to publish capital expenditures made by private- and public-sector organization.

(2) Population as of July 1 of the preceding calendar year Household Income (Personal Income has been replaced with Household Income by Statistics Canada, the concepts are similar) and Gross Domestic Product at market prices are for the previous calendar year.

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5

INTRODUCTION

Overview

The Province of Nova Scotia (“Nova Scotia” or the “Province”) is the most populous of the four Atlantic Provinces of Canada (“Atlantic Canada”) and covers 20,402 square miles. It extends 360 miles in length and varies in width from 50 miles to 105 miles.

According to estimates issued by Statistics Canada, the population of Nova Scotia was 959.5 thousand as of July 1, 2018 and represented 2.6% of Canada’s population of 37.1 million. The largest urban concentration in Atlantic Canada is the Halifax Regional Municipality (“Halifax”). Halifax Census Metropolitan Area, situated centrally on the Atlantic coast of the Province, had a population of 430,512 as of July 1, 2018. Halifax, the capital of Nova Scotia, is the commercial, governmental, educational, and financial center of the Province, and is also the location of an important naval base. The Government of Canada also has an extensive shipbuilding project in Halifax that started in 2013.

Political System

The Legislature of Nova Scotia consists of the Lieutenant Governor and the Nova Scotia House of Assembly. The Nova Scotia House of Assembly is elected by the people for a term not to exceed five years. The House of Assembly may be dissolved at any time by the Lieutenant Governor on the advice of the Premier of the Province, who is traditionally the leader of the majority party in the Nova Scotia House of Assembly.

The last provincial general election was held on May 30, 2017. The Liberal Party was elected to a majority government and holds 27 seats in the House of Assembly. The official opposition in the House of Assembly is the Progressive Conservative Party with 17 seats, the New Democratic Party holds 5 seats, there is one independent member, and one vacant seat.

The executive power in the Province is vested in the Governor-in-Council, comprising the Lieutenant Governor acting on the advice of the Executive Council. The Executive Council is responsible to the House of Assembly. The Governor General of Canada in Council appoints the Lieutenant Governor, who is the representative of the Queen in the Province. Members of the Executive Council are appointed by the Lieutenant Governor, normally from members of the House of Assembly, on the nomination of the Premier.

The Parliament of Canada is composed of the Queen represented by the Governor General, the Senate, whose members are appointed by the Governor General upon the recommendation of the Prime Minister of Canada, and the House of Commons, whose members are elected by the people. The people of Nova Scotia are entitled to send 11 elected representatives to the 338-member House of Commons. Ten Senators represent Nova Scotia in the Senate.

There are three levels of courts in Nova Scotia; provincially appointed courts are grouped together, the Supreme Court and Court of Appeal. The Provincial Court is a court of record and every judge thereof has jurisdiction throughout the Province to exercise all the power and perform all the duties conferred or imposed on a judge of the Provincial Court. In addition to hearing matters relating to provincial statutes and municipal by-laws, the Provincial Court is specifically authorized to hear certain matters under the Criminal Code of Canada. The Supreme Court of Nova Scotia is a court of original jurisdiction and as such has jurisdiction in all cases, civil and criminal, arising in the Province except those matters or cases expressly excluded by statute. The Nova Scotia Court of Appeal is the general court of appeal in both civil and criminal matters.

Constitutional Framework

Similar to the British Constitution, the Constitution of Canada (the “Constitution”) is not contained in a single document, but consists of a number of statutes, orders, and conventions. Canada is a federation of ten provinces and three Federal territories, with a constitutional division of responsibilities between the Federal and provincial governments, as set forth in The Constitution Acts, 1867 to 1982. The Constitution Acts are divided into two fundamental documents. The Constitution Act, 1867 (formerly the British North America Act, 1867), provides for the federation of British North America provinces, and the Constitution Act, 1982 (the “1982 Act”), enacted by the parliament of the United Kingdom, provides, among other things, that amendments to the Constitution be effected in Canada according to terms of an amending formula.

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The 1982 Act also includes a Charter of Rights and Freedoms, which encompasses language rights, Aboriginal rights, principles of the reduction of regional economic disparities, and the making of fiscal equalization payments to the provinces by the Government of Canada, including an enumeration of other Acts and orders which are part of the Constitution.

Under the Constitution, each provincial government may exclusively make laws in relation to the following matters:

• health;

• education;

• municipal institutions;

• property and civil rights;

• forestry and non-renewable natural resources;

• social services;

• other matters of purely provincial or local concern;

• raise revenue through direct taxation within its territorial limits; and

• borrow monies on the credit of the province.

The Federal Parliament of Canada is empowered to raise revenue by any system of taxation, and generally has jurisdiction over matters or subjects not assigned exclusively to the provincial legislatures. The Federal Parliament may exclusively make laws in relation to the following matters:

• the Federal public debt and property;

• the borrowing of money on the public credit of Canada;

• the regulation of trade and commerce;

• currency and coinage;

• banks and banking;

• national defense;

• the postal service;

• shipping; and

• navigation.

As a province of Canada, Nova Scotia could be affected by political events in another province. For instance, on September 7, 1995, the Government of Quebec presented a Bill to the National Assembly entitled An Act respecting the future of Quebec (the “Act”) that included, among others, provisions authorizing the National Assembly to proclaim the sovereignty of Quebec. The Act was to be enacted only following a favorable vote in a referendum. Such a referendum was held on October 30, 1995. The results were 49.4% in favor and 50.6% against.

In 1996, the Government of Canada, by way of reference to the Supreme Court of Canada (the “Supreme Court”), asked the court to determine the legality of a unilateral secession of the Province of Quebec from Canada, either under the Canadian Constitution or international law. On August 20, 1998, the Supreme Court of Canada ruled that the Province of Quebec did not have the unilateral right of secession, and that any proposal to secede authorized by a clear majority in response to a clear question in the referendum should be construed as a proposal to amend the Constitution, which would require negotiations. These negotiations would have to deal with a wide array of issues, such as the interest of the other provinces, the Federal Government, the Province of Quebec, and the rights of all Canadians both within and outside the Province of Quebec, and specifically, the rights of minorities, including Aboriginal peoples.

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ECONOMY

Nova Scotia has a diversified economy. The geographic location of Nova Scotia, being surrounded almost completely by water with more than 4,598 miles of coastline, has significantly contributed to the economy. The importance of the sea to the economy is witnessed in many industries such as fishing and aquaculture, oil and gas, naval defense, shipbuilding, tourism, transportation and research.

While many of the goods and services producing industries are directly or indirectly related to the processing of Nova Scotia’s natural resources such as seafood products, pulp and paper products, and natural gas, the provincial economy is also diversified into information age technologies and other goods as diverse as motor vehicle tires and naval shipbuilding.

Export of goods are important to the economy of Nova Scotia as export of goods and services represented 37.4% of Nova Scotia’s nominal Gross Domestic Product at market prices (“GDP”) in 2018. Of international merchandise exports, approximately 63.2% was exported to the United States.

Nova Scotia’s economy features the general characteristics of developed economies. Nova Scotia’s service sector is disproportionately larger than that of Canada. This represents Nova Scotia’s long-established position as the principal private sector service center for Atlantic Canada and the center for regional public administration and defense.

Principal Economic Indicators

The economy of Nova Scotia is influenced by the economic situation of its principal trading partners in Canada and abroad, particularly the United States. In 2018, Nova Scotia’s nominal GDP at market prices was approximately $44.4 billion, or 2.0% of Canada’s GDP. Compared with the levels for 2017, real GDP at market prices in chained 2012 dollars for Nova Scotia increased by 1.5% while GDP in Canada increased by 2.0% in 2018. Total exports of goods and services from Nova Scotia, to international and inter-provincial destinations, in 2018 increased by 4.8% over 2017.

Manufacturing sales in 2018 increased by 8.8% for Nova Scotia compared to an increase of 5.4% for Canada.

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The following table sets forth certain information about economic activity in Nova Scotia and, where provided, Canada, for the calendar years 2014 through 2018.

SELECTED ECONOMIC INFORMATION

	2014			2015			2016			2017			2018			Compound Annual rate of growth(1)
	(In millions of $ in current prices unless otherwise indicated)
Gross Domestic Product (Nova Scotia)
At Market Prices (2)	$	39,838		$	40,701		$	41,599		$	42,930		$	44,354			2.7	%
Chained 2012 Dollars		38,173			38,429			39,038			39,651			40,249			1.3	%
GDP at Basic Prices (Chained 2012)		34,747			35,013			35,489			36,107			36,663			1.4	%
Gross Domestic Product (Canada)
At Market Prices (2)		1,994,898			1,990,441			2,025,535			2,141,107			2,223,856			2.8	%
Chained 2012 Dollars		1,923,422			1,936,100			1,955,488			2,017,492			2,058,117			1.7	%
Household Income (Nova Scotia)		38,701			39,932			40,223			41,821			43,131			2.7	%
Household Income ($ per capita)		41,235			42,638			42,664			44,004			44,952			2.2	%
Capital Expenditures (3)		3,423.4			3,467.2			3,982.1			4,197.1			4,152.8			4.9	%
Retail Trade		14,018.1			14,046.4			14,709.6			15,861.3			15,904.1			3.2	%
Value of Manufacturing Sales		7,345.1			7,725.9			7,834.6			8,231.7			8,958.3			5.1	%
Unemployment Rate		9.0	%		8.6	%		8.3	%		8.4	%		7.5	%
Annual Increase in Consumer Price Index:
Nova Scotia		1.7	%		0.4	%		1.2	%		1.1	%		2.2	%
Canada		2.0	%		1.1	%		1.4	%		1.6	%		2.3	%

(1) Compound annual rate of growth is computed by distributing the aggregate amount of growth during the period on the basis of a single annual rate of growth compounded annually. These rates are not adjusted for inflation unless otherwise indicated.

(2) Gross Domestic Product (“GDP”) at market prices represents the value added by each of the factors of production plus indirect taxes less subsidies. GDP at Basic Prices represents the value added by each of the factors of production.

(3) Methodology used to calculate Capital Expenditures was revised in 2015 for all periods listed. Housing has been excluded in the new methodology since the primary goal of the program is to publish capital expenditures made by private- and public-sector organization.

Sources: Statistics Canada, Tables 36-10-0221-01 (formerly CANSIM 384-0037), 36-10-0222-01 (formerly CANSIM 384-0038), 36-10-0402-01 (formerly CANSIM 379-0030), 36-10-0226-01 (formerly CANSIM 384-0042), 34-10-0035-01 (formerly CANSIM 029-0045), 20-10-0008-01 (formerly CANSIM 080-0020), 16-10-0048-01 (formerly CANSIM 304-0015), 14-10-0018-01 (formerly CANSIM 282-0002), and 18-10-0005-01 (formerly CANSIM 326-0021).

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Recent Developments

The following table sets forth the most recently available information with respect to certain economic indicators for Nova Scotia and Canada.

RECENT DEVELOPMENTS

			Percentage Change, except where noted
	Period		Nova Scotia			Canada
Retail Trade (1)		Jan. – Sep. 2019/ Jan. – Sep. 2018		2.5	%		1.7	%
Manufacturing Sales (1)		Jan. – Sep. 2019/ Jan. – Sep. 2018		5.3	%		0.9	%
Housing Starts (all areas) (2)		Jan. – Oct. 2019/ Jan. – Oct. 2018		-8.2	%		-1.3	%
Employment Growth (3)		Jan. – Oct. 2019/ Jan. – Oct. 2018		2.4	%		2.2	%
Unemployment Rate (3)		Jan. – Oct. 2019		7.0	%		5.6	%
Consumer Price Index		Jan. – Oct. 2019/ Jan. – Oct. 2018		1.5	%		1.9	%

(1) Seasonally adjusted.

(2) These figures represent residential housing starts in both urban and rural areas, seasonally adjusted at annual rates.

(3) These figures reflect the seasonally adjusted rate of unemployment.

Sources: Statistics Canada, Tables 20-10-0008-01 (formerly CANSIM 080-0020), 16-10-0047-01 (formerly CANSIM 304-0014), 16-10-0048-01 (formerly CANSIM 304-0015), 34-10-0135-01 (formerly CANSIM 027-0008), 14-10-0287-01 (formerly CANSIM 282-0087), and 18-10-0004-01 (formerly CANSIM 326-0020).

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Economic Structure

Nova Scotia’s economy features the general characteristics of developed economies. Nova Scotia’s service sector is disproportionately larger than that of Canada. This represents Nova Scotia’s long-established position as the principal private sector service center for Atlantic Canada and the center for regional public administration and defense.

The following table shows the relative contribution of each sector to GDP in basic prices (chained 2012 dollars) for Nova Scotia and Canada for the calendar years indicated.

NOVA SCOTIA GROSS DOMESTIC PRODUCT BY INDUSTRY IN BASIC PRICES

(CHAINED 2012 DOLLARS)

											Compound Annual Rate of Growth 2014-2018			% of GDP in Basic Prices, 2018
	2014		2015		2016		2017		2018
	(In millions)
														Nova Scotia			Canada
Primary Sector:
Agriculture, Forestry, Fishing, and Hunting	$	949.3	$	938.6	$	879.8	$	904.9	$	878.3		(1.9	%)		2.4	%		2.1	%
Mining and Oil, and Gas Extraction		575.7		478.9		484.0		488.3		598.0		1.0	%		1.6	%		7.9	%
Utilities		763.2		762.5		749.6		750.1		782.1		0.6	%		2.1	%		2.2	%
		2,288.2		2,180.0		2,113.4		2,143.3		2,258.4		(0.3	%)		6.2	%		12.2	%
Secondary Sector:
Construction		2,024.7		2,056.1		2,236.7		2,323.8		2,222.5		2.4	%		6.1	%		7.3	%
Manufacturing		2,397.2		2,442.5		2,461.7		2,511.9		2,622.2		2.3	%		7.2	%		10.5	%
		4,421.9		4,498.6		4,698.4		4,835.7		4,844.7		2.3	%		13.2	%		17.8	%
Service Sector:
Transportation and Warehousing		1,211.2		1,187.7		1,233.9		1,267.4		1,301.5		1.8	%		3.5	%		4.5	%
Wholesale Trade		1,175.2		1,187.0		1,156.5		1,198.8		1,202.7		0.6	%		3.3	%		5.3	%
Retail Trade		2,275.6		2,303.9		2,400.4		2,544.0		2,558.4		3.0	%		7.0	%		5.2	%
Finance and Insurance		1,887.9		1,942.6		2,007.4		1,996.7		2,009.1		1.6	%		5.5	%		6.6	%
Real Estate, rental and leasing(1)		5,636.3		5,741.2		5,869.2		5,961.8		6,061.1		1.8	%		16.5	%		12.6	%
Management of Companies		124.8		124.1		105.2		96.6		93.3		(7.0	%)		0.3	%		0.6	%
Professional, scientific and technical services		1,445.2		1,513.1		1,548.2		1,531.8		1,588.6		2.4	%		4.3	%		5.7	%
Administrative and support, waste management and remediation services		756.4		764.6		735.6		739.3		762.9		0.2	%		2.1	%		2.7	%
Information and Cultural Industries		1,227.6		1,299.9		1,355.6		1,366.4		1,385.9		3.1	%		3.8	%		3.0	%
Education Services		2,409.0		2,415.1		2,412.7		2,435.5		2,470.9		0.6	%		6.7	%		5.3	%
Health Care and Social Assistance		3,682.6		3,666.6		3,707.4		3,775.6		3,870.0		1.2	%		10.6	%		7.0	%
Accommodation and Food Services		846.1		860.3		888.9		902.6		915.5		2.0	%		2.5	%		2.3	%
Arts, entertainment, and recreation		199.4		199.8		206.5		211.2		215.0		1.9	%		0.6	%		0.8	%
Other Services (except Public Administration)		739.2		726.5		725.9		738.1		756.8		0.6	%		2.1	%		1.9	%
Public Administration		4,415.1		4,382.7		4,344.0		4,381.7		4,442.8		0.2	%		12.1	%		6.7	%
		28,031.6		28,315.1		28,697.4		29,147.5		29,634.5		1.4	%		80.8	%		70.1	%
Gross Domestic Product at Basic Prices		34,747.2		35,013.4		35,489.1		36,106.5		36,662.5		1.4	%		100.0	%		100.0	%

Source: Statistics Canada, Tables 36-10-0402-01 (formerly CANSIM 379-0030), 36-10-0434-01 (formerly CANSIM 379-0031) (Canada GDP by industry).

(1) Includes imputed values of output from owner-occupied housing.

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Population and Labor Force

According to estimates by Statistics Canada, at July 1, 2018, the population of Nova Scotia was 959.5 thousand or 2.6% of Canada’s population of 37.1 million. Over the period July 2014 to July 2018, the population of Nova Scotia grew by 2.2%, as compared to growth of 4.6% for Canada. Nova Scotia’s labor force increased at a compounded annual rate of 0.1% compared to an increase of 0.9% for Canada for the 2014 to 2018 calendar year period.

According to Statistics Canada data for 2018, the Province’s labor force averaged 493,100 persons, representing 61.7% of the population 15 years of age and over. This level is a decrease of 0.1 percentage points in the participation rate compared to 2017. The figures for the calendar year 2018 show a decline in the unemployment rate to 7.5% from a rate of 8.4% in 2017. The labor force and the labor force employed increased in 2018 and the number of unemployed persons declined from the levels observed in 2017.

As the baby boom cohort of Nova Scotia’s population ages, an increasing share of the population is found among age cohorts that have lower participation rates. Between 2014 and 2018, the share of the working age population as measured by the Labor Force Survey aged 55 and older grew from 38.9% to 42.0% while the share aged between 25 and 54 declined from 46.5% to 44.5%. In 2018, the labor force participation rate of those aged 55 and up (the cohort with rising share of the population) was 34.0% while the labor force participation rate of those aged 25-54 (the cohort with declining share of the population) was 86.4%.

Nova Scotia’s unemployment rate was 8.0% in October 2019, on a seasonally adjusted basis, which was higher than the October 2018 level. The unemployment rate over the same period for Canada decreased to 5.5% from 5.7% year earlier. The unemployment rate for Nova Scotia in October 2019 reflects an increase of 2.6% in the labor force from a year earlier, an 8.5% decrease in the number of individuals unemployed and a 2.1% increase in the number of individuals employed, compared to the same month in 2018.

The following table sets forth Nova Scotia’s population and labor force for the 2014 to 2018 calendar years.

POPULATION AND LABOR FORCE

	2014			2015			2016			2017			2018			Compound Annual Rate of Growth
	(In thousands unless otherwise indicated)
Total Population (July 1)		938.5			936.5			942.8			950.4			959.5			0.6	%
Population 15 Years of Age and Over		783.0			785.5			788.7			792.5			798.8			0.5	%
Labor Force		491.6			490.2			486.6			490.1			493.1			0.1	%
Labor Force Employed		447.6			448.1			446.2			449.0			455.9			0.5	%
Labor Force Unemployed		44.0			42.0			40.4			41.0			37.2			(4.1	%)
Participation Rate (%):
Nova Scotia		62.8	%		62.4	%		61.7	%		61.8	%		61.7	%
Canada		66.0	%		65.8	%		65.7	%		65.8	%		65.4	%
Unemployment Rate (%):
Nova Scotia		9.0	%		8.6	%		8.3	%		8.4	%		7.5	%
Canada		6.9	%		6.9	%		7.0	%		6.3	%		5.8	%

Sources: Statistics Canada, Tables 17-10-0005-01 (formerly CANSIM 051-0001), 14-10-0327-01.

12

The following table illustrates the distribution of employment in Nova Scotia by industry for the calendar years 2014 through 2018, and the compound annual rate of growth over the period 2014 to 2018.

EMPLOYMENT BY INDUSTRY

	2014		2015		2016		2017		2018		Compound Annual Rate of Growth
	(In thousands)
Agriculture		5.2		5.4		4.5		4.7		5.2		0.0	%
Forestry, Fishing, Mining, Oil, and Gas		11.2		11.8		11.3		10.1		9.0		(5.3	%)
Utilities		3.8		3.7		3.3		3.9		3.7		(0.7	%)
Construction		34.0		33.6		32.9		31.6		33.1		(0.7	%)
Manufacturing		29.9		28.7		29.1		31.0		31.7		1.5	%
Wholesale and Retail Trade		73.9		71.8		71.9		75.8		79.0		1.7	%
Wholesale Trade		13.2		11.9		13.2		12.0		13.4		0.4	%
Retail Trade		60.7		59.9		58.7		63.8		65.6		2.0	%
Transportation and Warehousing		20.9		20.5		20.3		19.4		19.4		(1.8	%)
Finance, Insurance, Real Estate, and Leasing		22.2		23.4		23.6		22.8		22.1		(0.1	%)
Professional, Scientific, and Technical Services		26.1		27.8		27.5		28.4		27.5		1.3	%
Business, Building and Other Support Services		19.7		20.3		17.5		18.1		17.7		(2.6	%)
Educational Services		35.4		36.4		36.7		36.4		37.8		1.7	%
Health Care and Social Assistance		69.2		72.4		74.9		72.0		68.4		(0.3	%
Information, Culture, and Recreation		19.2		17.5		16.2		16.0		18.3		(1.2	%)
Accommodation and Food Services		32.1		30.9		29.5		30.3		35.3		2.4	%
Other Services		18.3		17.1		19.4		18.8		18.7		0.5	%
Public Administration		26.7		27.0		27.6		29.6		29.1		2.2	%
Total - All Industries		447.6		448.1		446.2		449.0		455.9		0.5	%

Source: Statistics Canada, Table 14-10-0023-01 (formerly CANSIM 282-0008).

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Income and Prices

Household income in Nova Scotia increased 3.1% to $43.1 billion in 2018 from 2017, and average weekly wages in 2018 were $871.34, up 1.2% from the level in 2017.

The following table reflects the percentage increases in average weekly wages and salaries for calendar years 2014 through 2018 as well as the Consumer Price Index (“CPI”) for Nova Scotia and Canada to 2018. On an annual basis in 2018, Nova Scotia’s CPI increased by 2.2% from 2017, while Canada’s CPI increased by 2.3% from 2017.

CPI AND AVERAGE WEEKLY WAGES AND SALARIES, INDUSTRIAL

AGGREGATE (PERCENT INCREASE OVER PREVIOUS YEAR)

	Nova Scotia		Canada
	Average Weekly Wages and Salaries	CPI	Average Weekly Wages and Salaries	CPI
2014	2.8%	1.7%	2.6%	2.0%
2015	1.8%	0.4%	1.8%	1.1%
2016	1.5%	1.2%	0.5%	1.4%
2017	1.6%	1.1%	2.0%	1.6%
2018	1.2%	2.2%	2.6%	2.3%

Sources: Statistics Canada, Tables 14-10-0204-01 (formerly CANSIM 281-0027) and 18-10-0005-01 (formerly CANSIM 326-0021).

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Capital Expenditures

Capital expenditures consist of investment in new construction, and purchases of machinery and equipment in Nova Scotia by the private sector and all levels of government.

The following table sets forth capital expenditures for the 2015 to 2018 calendar years and investment spending intentions for 2019.

CAPITAL EXPENDITURES ⁽¹⁾

	2015		2016		2017		2018(2)		2019(3)
	(in millions)
Agriculture, forestry, and fishing	$	89.5	$	129.5	$	148.0	$	152.8	$	136.3
Mining & oil and gas extraction		x		148.7		206.5		90.8		121.1
Utilities		391.0		491.2		706.5		435.5		430.3
Construction		103.7		190.4		124.8		114.8		117.1
Manufacturing		352.6		239.0		246.1		246.8		267.3
Wholesale trade		84.4		137.9		62.7		58.3		58.0
Retail trade		F		180.4		171.8		166.8		157.0
Transportation & warehousing		392.3		423.2		325.1		307.4		402.0
Information & cultural industries		234.4		217.6		x		x		282.2
Finance & insurance		53.1		x		x		x		33.2
Real estate and rental and lending		x		480.3		417.6		458.4		424.7
Professional, scientific & technical services		48.3		x		x		38		45.1
Management of companies and enterprises		x		x		x		x		11.8
Administrative support, waste management and remediation services		36.9		x		39.3		20.0		19.2
Educational services		133.4		216.0		291.5		339.4		196.9
Health care and social assistance		83.7		89.0		100.3		143.7		129.0
Arts, entertainment and recreation		71.5		81.5		71.8		86.9		97.3
Accommodation and food services		x		x		x		70.8		63.6
Other services (except public administration)		x		x		x		40.6		32.8
Public administration		657.2		743.9		884.6		1,063.50		888.0
Total		3,467.2		3,982.1		4,197.10		4,152.8		3,913.0
Private Sector		2,336.8		2,722.0		2,740.9		2,404.2		2,472.4
Public Sector		1,130.4		1,260.1		1,456.1		1,748.6		1,440.6
Total	$	3,467.2	$	3,982.1	$	4,197.10	$	4,152.8	$	3,913.0
Construction		1,952.7		2,240.5		2,646.1		2,204.0		1,956.3
Machinery and Equipment		1,514.5		1,741.6		1,550.9		1,948.8		1,956.7
Total	$	3,467.2	$	3,982.1	$	4,197.10	$	4,152.8	$	3,913.0

(1) Capital Expenditures are classified under the North American Industrial Classification System (“NAICS”), x – suppressed by Statistics Canada to meet the confidentiality requirements of the Statistics Act, F - too unreliable to be published by Statistics Canada

(2) Preliminary Actual.

(3) Investment Intentions.

Source: Statistics Canada, Tables 34-10-0035-01 (formerly CANSIM 029-0045) and 34-10-0038-01 (formerly CANSIM 029-0048).

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According to the “Annual Capital and Repair Expenditures Survey,” capital expenditure intentions shows a 5.8% decrease for Nova Scotia in 2019 from 2018, reflecting expectations of decreased capital spending in most industries, led by public administration, educational services, real estate, and agriculture, forestry, fishing and hunting. The decrease is expected to be partly offset by increases in mining, quarrying, oil and gas extraction, transportation and warehousing, and manufacturing. Capital expenditures as used in this survey, released in February 2019, is defined as the collection of data on intentions for capital investment and expenditures and does not include housing.

According to the “Annual Capital and Repair Expenditures Survey,” capital expenditures showed a 1.1% decrease for Nova Scotia in 2018 from 2017, reflecting decreased capital spending in mining, quarrying, and oil and gas extraction and utilities. The decline was partly offset by increases in public administration, educational services, health care and social assistance, and real estate.

Capital expenditures for 2017 showed a 5.4% increase over 2016. The change reflected an increase in utilities, educational services and mining, quarrying and oil and gas extraction. Partially offsetting the above increases were decreases in transportation and warehousing, wholesale trade, construction and real estate.

Capital expenditures for 2016 showed a 14.9% increase compared to 2015. The change reflected an increase in most industries, including construction, educational services, utilities, and wholesale trade. The increase was partially offset by decreases in manufacturing and information and cultural industries.

Goods Producing Industries

Manufacturing. The manufacturing industry is the largest contributor to the goods producing portion of Nova Scotia’s economy and accounted for 7.2% of real GDP (basic prices in chained 2012 dollars) in 2018. The gross selling value of manufacturing sales for Nova Scotia in the years 2014, 2015, 2016, 2017 and 2018 were as follows: $7,345 million, $7,726 million, $7,835 million, $8,232 million and $8,958 million, a compounded annual rate of increase of 5.1% over the period. This compares with an increase of 2.7% for Canada over the same period. In 2018, 58.1% of manufacturing sales were from the food, plastics and rubber products and paper and wood products subsectors.

The employment level in the manufacturing sector in 2018 was 31,700, an increase of 700 persons compared to 2017. The manufacturing sector employed 7.0% of all workers in Nova Scotia in 2018, compared to 9.3% in Canada. Most of the employment in the manufacturing sector occurs outside of the province’s largest urban center (Halifax Regional Municipality) making the sector directly and indirectly a key employer in many of the more rural areas of the Province.

The United States is the primary market for Nova Scotia’s international total merchandise exports. In 2018, $3.6 billion or 63.2% of the value of Nova Scotia’s international total exports went to the United States.

Construction. The construction industry is the second largest goods-producing industry in Nova Scotia. Its contribution to real GDP (basic prices in chained 2012 dollars) was $2.2 billion in 2018 and accounted for 6.1% of total real GDP. Construction activity accounted for 53.1% of total capital expenditures in 2018. Compounded annually capital expenditures on construction in Nova Scotia increased 5.4% for the 2014 to 2018 period, as compared to a 4.2% decrease for Canada.

Canada Mortgage and Housing Corporation reported that housing starts in all areas of Nova Scotia increased by 20.1% in 2018 from 2017, compared to a decrease of 3.1% at the national level over the same period.

The Federal government has introduced mortgage policies over the past number of years to expand the use and stringency of stress tests in mortgage insurance and elevate insurance criteria for low-ratio mortgages/mortgage loans that constitute greater than 80% of the value of a home. These Federal regulatory changes were directed at housing markets in Toronto and Vancouver. Although Federal government policy can have an impact on housing markets through restrictions in mortgage financing, the recent performance of the Province’s housing sector is more likely attributable to longer-term demographic trends and a shift of the market away from single-detached dwellings to multi-unit apartments.

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Housing price growth in Halifax has been generally slow since 2014 but picked up somewhat in recent years due to low inventory levels. The Royal Bank of Canada’s measure of housing affordability shows Halifax to be one of the most affordable of the major cities in Canada.

Nova Scotia’s aging demographics and immigration have driven a shift in demand away from single-detached housing toward multiple-unit construction intended for the rental market. Housing starts have kept pace with the rising population and household formation rates in the Province over the past four years. Most of the construction has been in Halifax where population growth rates have been higher.

HOUSING STARTS, ALL AREAS, NOVA SCOTIA

	2014		2015		2016		2017		2018
Single-detached		1,355		1,350		1,656		1,470		2,027
Multiples.		1,701		2,475		2,111		2,514		2,759
Semi-detached		220		259		318		253		353
Row		179		129		144		126		244
Apartment and other unit type		1,302		2,087		1,649		2,135		2,162
Total units		3,056		3,825		3,767		3,984		4,786

Source: Statistics Canada, Table 34-10-0135-01 (formerly CANSIM 027-0008).

Employment in the construction sector during 2018 was 33,100, an increase of 1,500 persons over levels in 2017.

Fisheries.    A large and diverse commercial fish and processing industry exists in Nova Scotia. Nova Scotia harvests over 50 different species of seafood and exports these products to all major seafood markets. The Federal Government, through detailed stock assessment plans and quotas, manages fisheries resources. The primary fishing sector contributed $408.2 million (in chained 2012 dollars) to the provinces’ GDP in 2018, a decrease of 3.0% from 2017 levels.

Nova Scotia’s fish landings had a value of $1,409.3 million in 2017, and total volume of commercial fish landings increased by 1.5% in 2017 over the level in 2016. The value of Nova Scotia’s fish landings for 2018 have not been released by the Federal Department of Fisheries and Oceans. The impact of fishing on the Province’s GDP is also seen in the manufacturing segment, which includes fish processing. Lobster is the predominant species and represented 56.9% of the total landed value in 2017. Queen Crab, Scallop and Shrimp were the next predominant species in 2017 at 12.6%, 11.2%, and 4.6% respectively.

Nova Scotia was the largest exporter of fresh and processed seafood in 2018 among all provinces, at $2,007.4 million. The United States is Nova Scotia’s top destination, representing 48.2% of fresh and processed seafood exports in 2018. Nova Scotia exports to over 70 countries including China, Japan, South Korea, United Kingdom, Hong Kong, France and Vietnam. The export value of seafood in 2018 increased by 2.5% compared to the total value in 2017.

The harvesting sector employed 3,800 persons throughout all of Nova Scotia in 2018, a decrease of approximately 1,800 persons from 2017.

The following table sets forth information with respect to the value of fish landings in Nova Scotia for the calendar years 2013 through 2017, and the value of exports of fresh and processed fish, including the value of exports of major species, for the calendar years 2014 through 2018.

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FISHING AND FISH PROCESSING INDUSTRY

	2013		2014		2015		2016		2017
Value of Fish Landings (in millions)	$	844.7	$	1,046.7	$	1,211.5	$	1,266.3	$	1,409.3
	2014		2015		2016		2017		2018
Value of Exports of fresh and processed fish (in millions)	$	1,242.0	$	1,662.8	$	1,788.5	$	1,959.4	$	2,007.4
Lobster		576.9		892.8		952.5		950.0		1,032.3
Scallops		164.0		169.8		140.8		143.6		131.5
Crab		171.5		181.1		223.2		314.2		273.1
Shrimp		113.7		137.2		112.8		126.4		138.3

Sources:    Department of Fisheries and Oceans, Innovation, Science and Economic Development Canada.

Mining and Mineral Exploration    The value of mineral production (excluding oil and gas) in Nova Scotia was $371.5 million in 2018, an increase of 49.7% over 2017 levels. This increase was the result of the first full year of production at the Touquoy gold mine. The major minerals reported being produced in Nova Scotia in 2017 were gold, crushed stone, sand and gravel. Nova Scotia’s gypsum and anhydrite deposits have been reported to be among the largest workable deposits in Canada. Gypsum outcrops occur throughout the whole of the northern half of the province’s mainland and Cape Breton Island. Gypsum data has been suppressed by Natural Resources Canada for confidentiality reasons. However, according to 2012 statistics, Nova Scotia produced about 65% of gypsum for all of Canada.

Real GDP in the sector, including the oil and gas sector, increased by 22.5% in 2018 from 2017. The industry, including the oil and gas sector, employed 2,700 persons in 2018.

There are currently two surface coal mines operating in Nova Scotia, at Stellarton and Point Aconi, operated by Pioneer Coal. In March 2017, an underground coal mine in Cape Breton started initial production at Donkin from a single continuous miner. Production information on the sector is currently unavailable due to confidentiality requirements of Statistics Canada.

Agriculture    Real GDP in 2018 in the crop and animal production sector decreased by 4.8% compared to 2017. Total farm cash receipts in 2018 decreased by 0.2%, comprised of a decrease in crop receipts of 5.7% and a decrease in direct payments of 41.7% (these are primarily government support payments and crop insurance), partially offset by an increase in the receipts for livestock production of 5.8%. The number of people employed in the agricultural sector stood at 5,200 persons in 2018, an increase of about 500 from 2017. The major components of agricultural production in Nova Scotia include dairy products, fruit, livestock, field vegetables, eggs and furs.

Forestry    In 2018, the value of manufacturing shipments for wood products was $434.9 million, a decrease of 8.1% from 2017. The forestry logging and logging and support sector employed 2,400 workers in 2018, an increase of approximately 900 persons from 2017. In 2018, the total provincial harvest of solid wood was 3,359,872 cubic meters, an increase of 2.0% over 2017. Of this amount, 242,193 cubic meters or 7.2% was exported.

Lumber shipments in 2018 were 1.07 million cubic meters, down 3.4% from 2017. Export sales of lumber and wood products increased 18.9% in 2018 from 2017. The largest export destination for forestry products is the United States (45.8% in 2018), and exports to the US increased by 14.9% in 2018 compared to 2017. In 2018, export sales for pulp and paper products were up 21.4% over 2017.

Exports

The total value of exports of goods and services from Nova Scotia in 2018, under Statistics Canada’s Provincial Economic Accounts data system, stood at $16,607 million, resulting in an annual compound growth rate of 3.6% over the 2014 to 2018 period. The value of exports of goods and services represented 37.4% of the total value of Nova Scotia’s GDP in 2018.

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Of the $16,607 million in exports of goods and services, 47.8%, or $7,944 million, was shipped to other countries, leaving 52.2% or $8,663 million as exports to other provinces within Canada. Exports of goods accounted for 58.5% of the total exports while exports of services accounted for 41.5%. Most of the goods are exported to other countries (58.4%), while services are mostly exported to other provinces (67.0%).

Over the 2014 to 2018 period, the total value of exports of goods had an annual compound rate of growth of 3.1% compared to a growth rate of 4.4% for the total value of export of services.

Statistics Canada reports in their Provincial Economic Accounts that the total value of international exports of goods in 2018 was $5,669 million, experiencing an annual compound rate of growth of 3.1% since 2014. The Provincial Economic Accounts figure can be contrasted with Nova Scotia’s international merchandise domestic exports of goods based on customs clearing data that amounted to $5,724 million in 2018. The Provincial Economic Accounts adjusts the customs data for other costs such as transportation margins and duties. Additionally, “domestic” international exports do not include exports from the Province that originated outside the Province. During the years 2014, 2015, 2016, and 2017 the average Canadian dollar/US dollar noon exchange rate, according to the Bank of Canada, was $1.1045, $1.2787, $1.3248 and $1.3286 Canadian dollars per one U.S. dollar respectively. The Bank of Canada no longer reports noon exchange rates and reports the Canadian dollar/US dollar annual exchange rates for 2017 and 2018 as $1.2986 and $1.2957, respectively.

The following table sets forth categories of Selected Trade indicators for the calendar years 2014 through 2018.

SELECTED TRADE INDICATORS (in millions)

	2014			2015			2016			2017			2018
Exports of goods to other countries	$	5,021		$	5,322		$	5,223		$	5,354		$	5,669
Export of services to other countries		1,618			1,868			2,075			2,172			2,275
Exports to other countries		6,639			7,190			7,298			7,526			7,944
Exports of goods to other provinces		3,589			3,598			3,496			3,812			4,042
Export of services to other provinces		4,196			4,199			4,195			4,508			4,621
Exports to other provinces		7,785			7,797			7,691			8,320			8,663
Total Exports of goods and services:		14,424			14,987			14,989			15,846			16,607
Imports of goods from other countries		10,509			11,050			10,885			11,557			12,718
Import of services from other countries		1,648			1,647			1,727			1,811			1,874
Imports from other countries		12,157			12,697			12,612			13,368			14,592
Imports of goods from other provinces		5,391			5,206			5,269			5,554			5,544
Imports of services from other provinces		7,769			7,926			8,416			8,749			9,030
Imports from other provinces		13,160			13,132			13,685			14,303			14,574
Total Imports of goods and services:		25,317			25,829			26,297			27,671			29,166
Trade Balance		(10,893	)		(10,842	)		(11,308	)		(11,825	)		(12,559	)
Source: Statistics Canada, Table 36-10-0222-01 (formerly CANSIM 384-0038).

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The following two tables sets forth Nova Scotia’s top international merchandise exports by industry and the top imports by product for the calendar years 2014 through 2018, and the compound annual growth rate over the 2014 to 2018 period.

INTERNATIONAL MERCHANDISE EXPORTS BY INDUSTRY

	2014		2015		2016		2017		2018		Compound Annual Rate of Growth
			(in millions)
Tire Manufacturing	$	1,087.8	$	1,182.2	$	1,195.3	$	1,142.0	$	1,176.8		2.0	%
Seafood Product Preparation and Packaging		625.2		800.3		918.2		1,070.1		1,065.0		14.2	%
Fishing		640.3		885.2		878.0		892.9		953.4		10.5	%
Pulp Mills		221.1		241.5		224.4		227.7		287.4		6.8	%
Paper Mills		229.7		243.3		174.6		192.6		223.1		-0.7	%
Sawmills and Wood Preservation		118.6		107.0		118.1		149.9		176.0		10.4	%
Frozen Food Manufacturing		122.9		129.6		108.3		111.9		144.9		4.2	%
Other Rubber Product Manufacturing		115.8		84.2		57.9		77.8		132.0		3.3	%
Recyclable Metal Wholesaler-Distributors		80.4		58.9		79.7		95.2		120.4		10.6	%
Unsupported Plastic Film, Sheet and Bag Manufacturing		107.1		108.3		85.3		80.8		82.2		-6.4	%
Sub-Total		3,349.0		3,840.5		3,839.8		4,041.1		4,361.2		6.8	%
Other		1,900.9		1,505.1		1,387.7		1,307.2		1,363.2		-8.0	%
Grand Total	$	5,249.9	$	5,345.6	$	5,227.4	$	5,348.3	$	5,724.4		2.2	%

Source: Innovation, Science and Economic Development Canada, 5 digit NAICS codes.

INTERNATIONAL MERCHANDISE IMPORTS BY PRODUCT

	2014		2015		2016		2017		2018		Compound Annual Rate of Growth
			(in millions)
Motor Vehicles for Passenger Transport	$	2,965.5	$	3,191.7	$	3,672.5	$	4,127.4	$	4,584.9		11.5	%
Preparations of Non-Crude Petroleum Oils		1,402.2		1,303.2		1,033.4		879.6		1,114.6		-5.6	%
Tanks and Other Motorized Armoured Fighting Vehicles		26.1		17.9		15.2		33.9		679.2		125.9	%
Trucks and Other Vehicles for Transport of Goods		150.9		188.8		190.7		202.8		276.9		16.4	%
Coal and Solid Fuels Manufactured from Coal		161.9		171.3		119.6		134.0		184.1		3.3	%
Natural Rubber		139.5		123.4		100.7		145.3		139.9		0.1	%
Crude Petroleum Oils and Oils Obtained from Bituminous Materials		0.0		0.0		0.0		—		123.0		6375.0	%
Self-Propelled Bulldozers, Scrapers, Graders		75.8		82.9		71.4		165.1		108.3		9.3	%
Fish Fillets and Other Fish Meat – Fresh or Frozen		89.7		88.2		103.4		116.1		103.2		3.6	%
Other Moving, Grading, Levelling, etc. Machinery		39.9		52.9		56.6		70.2		102.7		26.7	%
Sub-Total		5,051.5		5,220.3		5,363.4		5,874.4		7,416.9		10.1	%
Other		2,756.2		3,066.2		2,797.0		3,064.5		3,142.9		3.3	%
Grand Total	$	7,807.7	$	8,286.6	$	8,160.4	$	8,938.9	$	10,559.8		7.8	%

Source: Innovation, Science and Economic Development Canada, HS4 codes.

Merchandise imports by commodity are assessed based on their port of clearance, rather than their intended destination in Canada (or beyond). Of note in the table on imports into Nova Scotia by product grouping is the large amount of motor vehicles for passenger transport. Most of these vehicles arrive from Europe, and are then shipped across Canada.

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The following tables show top export destinations and import sources. The ranking for the top countries is based on their value in 2018, but the same countries are shown for all five years.

INTERNATIONAL MERCHANDISE EXPORTS BY TOP 10 COUNTRIES

	2014		2015		2016		2017		2018
			(in millions)
United States	$	3,885.1	$	3,787.0	$	3,605.7	$	3,476.3	$	3,616.0
China		275.6		419.8		488.5		602.3		792.9
Korea, South		57.8		65.4		83.8		111.0		108.4
Japan		86.2		81.3		42.9		48.3		98.7
Hong Kong		79.4		78.1		88.8		110.4		93.9
United Kingdom		85.7		102.9		84.7		85.5		84.5
France (incl. Monaco, French Antilles)		75.9		84.3		85.5		85.0		72.7
Mexico		47.0		65.0		79.8		68.7		69.5
Vietnam		45.6		59.1		85.0		108.5		66.8
Netherlands		15.1		27.2		28.6		40.6		53.0
Sub-total		4,653.5		4,770.1		4,673.4		4,736.6		5,056.5
Others		596.4		575.5		554.0		611.7		667.9
Total All Countries(1)	$	5,249.9	$	5,345.6	$	5,227.4	$	5,348.3	$	5,724.4

Source: Innovation, Science and Economic Development Canada.

INTERNATIONAL MERCHANDISE IMPORTS BY TOP 10 COUNTRIES⁽¹⁾

	2014		2015		2016		2017		2018
			(in millions)
Germany	$	2,389.8	$	2,693.4	$	2,855.7	$	3,362.5	$	3,311.5
United Kingdom		1,849.2		1,618.7		1,039.4		848.5		1,128.0
United States		769.8		847.9		982.2		1,064.2		1,084.6
Cuba		98.2		91.6		107.2		268.8		1,004.7
Sweden		533.9		492.6		366.5		500.3		707.4
China		198.4		203.9		376.1		427.0		539.3
Netherlands		291.4		318.2		340.9		358.3		391.7
Belgium		74.2		77.2		90.4		274.2		281.3
Korea, South		107.5		71.4		157.1		82.6		213.0
Finland		99.2		105.4		89.5		148.3		165.0
Sub-total		6,411.6		6,520.3		6,405.0		7,334.6		8,826.5
Others		1,396.1		1,766.2		1,755.3		1,604.3		1,733.4
Total All Countries	$	7,807.7	$	8,286.6	$	8,160.4	$	8,938.9	$	10,559.8

Source: Innovation, Science and Economic Development Canada.

(1) Merchandise trade data on a customs basis reports imports based on their province of clearance. Much of the value of goods cleared at Nova Scotia ports is not in fact destined for Nova Scotia customers and as such does not reflect the nature of economic relationship between the Province and the countries listed as major import sources. For example, Halifax has a significant auto port at which a large number of high valued cars from Germany (and elsewhere in Europe) are cleared, loaded onto trains and shipped elsewhere in North America.

The U.S. Administration has renegotiated the North American Free Trade Agreement (“NAFTA”) with Canada and Mexico, which would be replaced with the United States Mexico Canada Agreement (“USMCA”). The approval of this agreement is pending. The Province believes that the USMCA, as negotiated and proposed for approval, is not likely to have a significant impact on Nova Scotia’s trade with the United States. The recent

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imposition of tariffs by the United States on certain goods exported to the United States from Canada is not likely to have a significant impact on exports from Nova Scotia to the United States as Nova Scotia based businesses are not significant exporters of such goods to the United States market.

The Comprehensive Economic and Trade Agreement with the European Union (CETA) became effective on September 21, 2017. The removal of most tariff lines from European Union imports from Canada is anticipated to make Canadian goods more competitively priced in European markets.

After the United States, the European Union is the second largest destination of Nova Scotia goods exports. The bulk of Nova Scotia exports to European Union destinations are fish and agricultural products as well as aerospace parts.

Service Sector

Overview.    The Halifax metropolitan area is the largest financial and commercial service center in Atlantic Canada. The area is also one of Canada’s major medical and scientific communities, and the location of several federally sponsored scientific research institutions, including the Bedford Institute of Oceanography. The Halifax region is also home to several universities as it is a major education center for Atlantic Canada.

The Halifax region accounted for 51.4% of the total employment in Nova Scotia in 2018 producing an unemployment rate of 5.9% for 2018 compared to the 7.5% unemployment rate for the Province as a whole, and a 5.8% unemployment rate for Canada.

The following table sets forth the percentage contribution to the GDP for the service sector by component for the calendar years 2014 through 2018.

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SERVICE INDUSTRIES AS A PERCENTAGE OF TOTAL SERVICE PRODUCING INDUSTRIES

	2014			2015			2016			2017			2018
Wholesale trade		4.2	%		4.2	%		4.0	%		4.1	%		4.1	%
Retail trade		8.1	%		8.1	%		8.4	%		8.7	%		8.6	%
Transportation and warehousing(1)		4.3	%		4.2	%		4.3	%		4.4	%		4.4	%
Information and cultural industries		4.4	%		4.6	%		4.7	%		4.7	%		4.7	%
Finance and insurance		6.7	%		6.9	%		7.0	%		6.9	%		6.8	%
Real estate and rental and leasing		20.1	%		20.3	%		20.5	%		20.5	%		20.5	%
Professional, scientific and technical services		5.2	%		5.3	%		5.4	%		5.3	%		5.4	%
Management of companies and enterprises		0.4	%		0.4	%		0.4	%		0.3	%		0.3	%
Administrative and support, waste management and remediation services		2.7	%		2.7	%		2.6	%		2.5	%		2.6	%
Educational services		8.6	%		8.5	%		8.4	%		8.4	%		8.3	%
Health care and social assistance		13.1	%		13.0	%		12.9	%		13.0	%		13.1	%
Arts, entertainment and recreation		0.7	%		0.7	%		0.7	%		0.7	%		0.7	%
Accommodation and food services		3.0	%		3.0	%		3.1	%		3.1	%		3.1	%
Other services (except public administration)		2.6	%		2.6	%		2.5	%		2.5	%		2.6	%
Public administration		15.7	%		15.5	%		15.1	%		15.0	%		15.0	%
Total (2)		100.0	%		100.0	%		100.0	%		100.0	%		100.0	%

(1) Includes Pipeline Transportation – See “Offshore Exploration and Development”.

(2) Numbers may not add up due to rounding.

Source: Statistics Canada, Table 36-10-0402-01 (formerly CANSIM 379-0030).

Trade.    In 2018, wholesale merchants’ sales increased 4.4% and retail sales increased by 0.3% in Nova Scotia compared to an increase of 3.7% and 2.9% respectively in Canada over 2017 levels. The value of retail sales in 2018 in Nova Scotia was $15.9 billion. The compound annual rate of growth in retail sales was 3.2% in Nova Scotia and 4.4% in Canada during the 2014 to 2018 period. Employment in the wholesale sector and retail sector stood at 13,400 and 65,600 persons respectively in 2018. This represents an increase of approximately 1,400 persons in the wholesale sector, and an increase of 1,800 persons in the retail sector, compared to 2017.

The value of wholesale merchants’ sales was $10.3 billion in 2018, an increase of 4.4% compared to 2017. In 2018, the wholesale sector had a real GDP increase of 0.3% compared to 2017. The combined wholesale and retail trade sector accounted for 10.3% of the total value of real GDP at basic prices for the Province in 2018.

Transportation and Warehousing.    Transportation and warehousing have been important factors in the economy of Nova Scotia throughout its history. Halifax harbor and the Strait of Canso are deep-water, ice-free harbors. The Port of Halifax is capable of handling vessels up to 150,000 metric tonnes, and the Strait of Canso can accommodate the world’s largest super-tankers.

The sector’s real GDP (chained 2012 dollars) in 2018 increased by 2.7% from 2017. In 2018, the sector employed about 19,400 persons, unchanged from 2017.

Port facilities at Halifax include 35 deep-water berths that are complemented by rail, air, and motor freight services. With two container terminals, each capable of berthing two container ships simultaneously, Halifax is Canada’s fourth largest container port and is capable of handling fully laden Post-Panamax vessels. Halifax’s south end container terminal is undergoing a project to simultaneously berth and service two post-Panamax vessels. The total volume of cargo handled by the Port of Halifax in 2018 was 9.0 million metric tonnes. In 2018, containerized cargo tonnage amounted for 4.4 million metric tonnes. The Port of Halifax handled 547,445 TEU (twenty-foot

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equivalent units) in 2018, down 2.1% from the number in 2017. Non-containerized cargo accounted for approximately 4.6 million metric tonnes. Non-containerized cargo consists of Bulk cargo (chiefly consisting of petroleum products and gypsum), Ro/Ro (roll-on/roll-off) and break-bulk. This port serves as a trans-shipment point for automobile distribution throughout Atlantic Canada via ship and rail. The Port of Halifax had visitation by 198 cruise vessels in 2018 with 316,869 passengers.

Tourism. Nova Scotia had approximately 2.167 million non-resident overnight tourists during 2018, a decrease of 0.8% from 2017 levels. Overall in 2018, the majority of visitors, 85.9%, came from other parts of Canada, while 9.8% came from the United States, and 4.3% came from overseas. About 66.0% of visitors to Nova Scotia travelled by road with the remaining 34.0% arriving by air.

Energy

Nova Scotia is no longer a producer of natural gas as the two former producers, Sable Offshore Energy Project and the Deep Panuke Project, both ceased production in 2018. Royalty income from offshore gas and natural gas liquids for the fiscal year 2018-2019 was $6.9 million. In recent years, the only material revenue from the natural gas developments was a Prior Years’ Adjustments (“PYA”) of $260.0 million arising from the settlement of an arbitration award in the Province’s favor regarding a transportation cost issue with the interest holders. The Province expects no revenue from the offshore royalties in 2019-2020, and there is currently no exploration activity for petroleum resources in the Nova Scotia offshore region.

The majority of electricity generated in Nova Scotia is from coal and oil-fired facilities. Overall total electricity production from utilities and independent power producers in Nova Scotia for 2018 was 10,171 gigawatt hours, a 0.8% increase in production over 2017. Total hydro, tidal, wind and solar generation for 2018 was 2,096 gigawatt hours, a 3.2% increase over 2017. Starting in 2015, the Province of Nova Scotia’s regulations require that nearly 25% of the province’s electricity supply come from renewable sources (wind, solar, tidal and biomass technology), and has a target of 40% renewable electricity by 2020. The Province achieved the 2015 target, and Nova Scotia Power reported that 30% of electricity generated in 2018 was from renewable sources .

ELECTRIC POWER GENERATION (MEGAWATT HOURS)

	2014		2015		2016		2017		2018
Hydro, Tidal, Wind, Solar and other		1,892,847		1,829,565		1,820,819		2,164,800		2,096,333
Thermal generation		8,748,063		8,390,471		7,999,210		7,923,162		8,075,145
Total		10,640,910		10,220,036		9,820,029		10,087,962		10,171,478

Source: Statistics Canada, Table 25-10-0020-01 (formerly CANSIM 127-0007).

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GOVERNMENT FINANCE

Overview

Under the Canadian Constitution, the Province of Nova Scotia is granted certain exclusive powers, including the power to impose direct taxation within the Province to raise revenue for Provincial purposes and the power to borrow money on the sole credit of the Province. Certain responsibilities assigned to the Province are, in turn, delegated to municipal governments and other local bodies within the province, such as school boards and local service commissions, under varying degrees of Provincial control.

Municipal governments raise their own revenues from a number of sources, the most important of which is real property taxes, and also receive financial assistance from the Province. Municipal borrowing powers are strictly limited; operating deficits in any given year must be recaptured through taxation or other current revenues the following year. Under the incorporating legislation, municipalities and municipal enterprises long-term capital requirements are subject to the approval of the Minister of Municipal Affairs of the Province and must be made through the Nova Scotia Municipal Finance Corporation (“MFC-”) except for borrowings from the Federal Government, the Province, another municipality, or their agencies. The municipalities may carry debt with financial institutions until long-term financing is arranged with the MFC. (See “Certain Crown Corporations and Agencies – Nova Scotia Municipal Finance Corporation”).

The receipt of public revenues, the disbursement of public funds, the control of expenditures, and the keeping and auditing of the Public Accounts of the Province are governed by various Provincial statutes. All receipts and disbursements of public money of the Province’s departments and public service units flow through the General Revenue Fund. Such receipts and disbursements consist of revenue, expenditures, and other transactions. Any net cash requirement of the General Revenue Fund is provided for by the Province’s traditional sources of financing, including borrowings in the public and private financial markets and internal sources.

Anticipated revenue, program expenses, capital expenditures, and debt servicing costs included in the budgetary estimates of the Province are submitted for approval to the House of Assembly for each fiscal year. Authority for expenditure expires at the end of each fiscal year. Funds for expenditure may also be provided by special legislation and by order of the Lieutenant Governor in Council pursuant to the authority of the Finance Act. Loans and investments, including those to or on behalf of corporations and agencies owned or controlled by the Province, are generally made pursuant to the authority and limitations of various Provincial statutes and are not included in the annual budgetary estimates submitted to the House of Assembly for approval.

The accounts and financial operations of the Province and the financial statements of certain crown corporations and agencies are subject to audit by the Auditor General, an official appointed by the Lieutenant Governor in Council under the Auditor General Act. The Auditor General audits the Consolidated Financial Statements of the Province.

On March 26, 2019, the Minister of Finance and Treasury Board submitted the Budget for the fiscal year 2019-2020, which is referred to herein as “Estimate 2020”.

Specific Accounting Policies

Financial statements of the Province are prepared in accordance with Canadian generally accepted accounting principles for the public sector, which for purposes of the Province’s financial statements are represented by accounting recommendations of the Public Sector Accounting Board (“PSAB”) of the Chartered Professional Accountants (“CPA”) of Canada, supplemented where appropriate by other CPA of Canada and International Federation of Accountants accounting standards or pronouncements.

The Government Reporting Entity

The Government Reporting Entity is comprised of the General Revenue Fund, other Governmental Units, Government Business Enterprises, and Government Partnership Arrangements. Governmental Units and Government Business Enterprises represent the entities that are controlled by the Province. Government Partnership Arrangements represent entities for which decision making and significant risks and benefits are shared with other parties outside of the Government Reporting Entity.

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Principles of Consolidation

This section describes the accounting treatment for each type of entity included in the Consolidated Financial Statements of the Province. A Governmental Unit is a government organization that is not a Government Business Enterprise. Governmental Units include government departments, public service votes, funds, agencies, service organizations, boards, government not-for-profit organizations, and government business-type organizations. The accounts of Government Units are consolidated on a line-by-line basis after adjusting for differences in significant accounting policies with the exception of capitalization thresholds and depreciation methods and rates of accounting for tangible capital assets for which no accounting policy adjustments are performed. Significant inter-organization accounts and transactions are eliminated.

A Government Business Enterprise is a self-sustaining organization that has the financial and operating authority to sell goods and services to individuals and non-government organizations as its principal activity and source of revenue. Government Business Enterprises have been accounted for on the modified equity basis that does not require any accounting policy adjustments. Net equity of Government Business Enterprises is included in government consolidated financial statements in the Consolidated Statement of Financial Position, while any net income or net loss is shown as a separate line item in the Consolidated Statement of Operations and Accumulated Deficits. The largest Government Business Enterprises, in terms of revenues, are the Nova Scotia Liquor Corporation and the Nova Scotia Provincial Lotteries and Casino Corporation.

A Government Partnership is a contractual arrangement between the government and a party or parties outside the reporting entity. The partners have clearly defined common goals, make a financial investment in the partnership, share control of decision-making, and share, on an equitable basis, the significant risks and benefits associated with the operations of the government partnership. Where significant, government’s interest in partnerships is accounted for using proportionate consolidation.

A complete overview of the organizations within the Government Reporting Entity is available within the Province’s Public Accounts, Volumes I and II for the fiscal year 2018-2019. For Volume I of the Public Accounts, see Exhibit (1) to the Province’s Form 18-K/A, Amendment No. 1, filed on August 6, 2019, for the fiscal year ended March 31, 2018.

Revenues

Revenues are recorded on an accrual basis. The main components of revenue include federal transfers such as Equalization, Canada Health Transfer, and Canada Social Transfer, as well as interest, various taxes, and legislated levies. Revenues from Personal and Corporate Income Taxes and Harmonized Sales Taxes, are accrued in the year earned based on estimates using statistical models. These revenues are recorded at the net amount estimated, after considering adjustments for tax credits and administrative costs related to the collection and processing performed by the Federal Government. Petroleum Royalties may be reduced by a portion of estimated abandonment cost for the future decommissioning of restoration of offshore field assets.

Expenses

Expenses are recorded on an accrual basis. Grants are recognized in the period during which the grant is authorized and any eligibility criteria are met. Provisions are made for probable losses on certain loans, investments, loan guarantees, accounts receivable, advances, forgivable loans, and for contingent liabilities when it is likely that a liability exists and the amount can be reasonably determined. These provisions are updated as estimates and revised, at least annually.

Measurement Uncertainty

Uncertainty in the determination of the amount at which an item is recorded in the Province’s Consolidated Financial Statements is known as measurement uncertainty. Uncertainty exists whenever estimates are used because it is reasonably possible that there could be material difference between the recognized amount and another reasonably possible amount.

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Measurement uncertainty exists in the Province’s Consolidated Financial Statements in the accruals for such items as pension, retirement and other obligations, environmental remediation obligations, and federal and provincial source revenues. The nature of the uncertainty in the accruals for pension, retirement, and other obligations arise because actual results may differ significantly from the Province’s various assumptions about plan members and economic conditions in the marketplace. Uncertainty exists for environmental remediation obligations because the actual extent of remediation activities required may differ significantly based on the actual extent of site contamination and the chosen remediation process. Uncertainty related to sales and income taxes, petroleum royalties, Canada Health Transfer and Canada Social Transfer arises because of the possible differences between estimated and actual economic growth assumptions used in statistical models by the Province to accrue these revenues.

Additional accounting policies are set forth in the Notes to the Public Accounts filed as Exhibit (1) to the Province’s Form 18-K/A, Amendment No. 1, filed on August 6, 2019, for the fiscal year ended March 31, 2018.

The financial information with respect to the Province set forth herein has been derived from several sources, including the Consolidated Financial Statements of the Province. Unless otherwise indicated, amounts shown in this document have been restated as described above.

Unless otherwise indicated, amounts referred to as “Estimate for the year ended March 31, 2020” have been taken from the Budget 2019-2020 tabled on March 26, 2019. The Budget, however, is not prepared on the same basis as the historical financial information. Revenues and expenses in the Estimates reflect only those of the General Revenue Fund. The Provincial surplus includes results of the General Revenue Fund, consolidation and accounting adjustments for Governmental Units, and net income for Government Business Enterprises.

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Summary of Budget Transactions and Borrowing Requirements

SUMMARY OF OPERATIONS AND NET FUNDING REQUIREMENTS

OF THE CONSOLIDATED ENTITY

	2015			2016			2017			2018			2019
	(in millions)
Revenues	$	10,310.5		$	10,549.8		$	10,835.5		$	11,590.8		$	11,485.5
Program Expenses		9,907.6			10,082.2			10,241.9			10,913.0			10,889.0
Debt Servicing Costs		898.1			868.5			837.0			836.9			865.8
Total Expenses		10,805.6			10,950.8			11,078.9			11,749.9			11,754.8
Surplus/(Deficit) from Governmental Units		(495.1	)		(401.0	)		(243.4	)		(159.1	)		(269.3	)
Net Income from Government Business
Enterprises		351.4			387.8			394.6			385.4			389.2
Provincial Surplus / (Deficit) (1)		(143.7	)		(13.2	)		151.2			226.3			120.0
Net Funding Requirements
Deficit/(Surplus)		143.7			13.2			(151.2	)		(226.3	)		(120.0	)
Non-Cash Items (2)		(340.7	)		(424.6	)		(1,078.5	)		(112.7	)		(413.9	)
Operating Requirements		(197.0	)		(411.4	)		(1,229.7	)		(339.0	)		(533.9	)
Loan advances and Investing, net of repayments		240.3			33.1			39.5			(103.0	)		111.4
Acquisition of Tangible Capital Assets		542.2			466.5			459.5			671.2			587.9
Sinking Fund Installments and Serial Retirements		40.8			(177.7	)		26.3			26.3			(174.0	)
Net Refinancing Transactions(3)		592.8			1,032.1			1,010.3			474.7			1,280.0
Net Funding Requirement		1,219.1			942.6			305.8			730.4			1,271.5
Financing of Net Funding Retirement
Change in Cash and Short-term Investments		32.4			(97.3	)		(369.4	)		(200.1	)		(33.9	)
Debt Issued		1,186.7			1,039.8			675.0			930.5			1,305.4
Total	$	1,219.1		$	942.6		$	305.7			730.4			1,271.5

(1) As of September 19, 2019, the Province is forecasting a surplus of $30.8 million for the fiscal year 2019-2020.

(2) Includes amortization of tangible capital assets, net proceeds on disposal of tangible capital assets, foreign exchange amortization, net income from Government Business Enterprises, changes in receivables, payables, and other non-cash items, and sinking fund earnings, which are retained in the Sinking Funds and Public Debt Management Fund, and are not available for general purposes, profit distribution from Government Business Enterprises and foreign currency swaps and adjustments. Also includes the drawdowns from sinking funds and the Public Debt Management Fund.

(3) Net Refinancing Transactions consist of proceeds from Sinking Funds and Repayment of Debentures and Other Long-term obligations.

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Revenue

The following table sets forth the revenue, by source, of the General Revenue Fund, as described in “Government Finance – Specific Accounting Policies” above, for fiscal years 2015 to 2019 inclusive and Budget Estimate for fiscal year 2020, each adopting the accounting policies, other than consolidation of government entities, described in “Government Finance – Specific Accounting Policies”.

REVENUE BY SOURCE FOR GENERAL REVENUE FUND ⁽¹⁾

	2015		2016			2017			2018			2019		Budget 2020
	(in millions)
Provincial Sources:
Personal Income Taxes	$	2,349.7	$	2,562.5		$	2,636.6		$	2,768.4		$	2,691.6	$	2,811.3
Corporate Income Taxes		474.0		461.7			513.0			539.0			630.9		604.7
Sales Taxes		1,702.4		1,760.2			1,778.5			1,803.8			1,843.3		1,895.9
Tobacco Taxes		206.3		217.0			222.2			210.7			205.8		205.4
Motive Fuel Taxes		248.3		254.0			258.5			266.4			263.4		276.9
Cannabis Tax		—		—			—			—			3.4		7.8
Registry of Motor Vehicles		123.0		130.3			133.1			134.6			134.2		136.1
Offshore Royalties		30.0		14.1			9.9			9.1			6.9		—
Offshore License Forfeitures		—		—			—			—			61.4		—
Other Provincial Sources		285.6		308.9			299.2			318.7			332.9		321.3
TCA Cost Shared Revenue		8.6		2.1			2.7			62.3			2.4		2.5
Prior Years’ Adjustments		110.2		(68.4	)		(5.8	)		230.9			1.0		—
Fees & Other Charges		62.2		61.6			62.5			62.0			63.2		63.2
Ordinary Recoveries		340.7		354.7			363.8			371.4			395.3		361.6
Gain on Disposal of Crown Assets		4.8		(0.3	)		5.8			1.1			0.3		—
Interest Revenues		83.7		89.5			88.6			121.1			107.7		85.6
Sinking Fund Earnings		103.9		96.0			90.5			96.5			106.5		95.9
Total Provincial Sources		6,133.3		6,244.0			6,459.1			6,996.0			6,850.3		6,868.2
Federal Sources:
Equalization		1,750.7		1,777.8			1,732.9			1,795.0			1,843.6		1,942.6
Canada Health Transfer		852.2		895.7			944.4			965.9			998.8		1,039.4
Canada Social Transfer		334.0		341.1			349.5			357.5			366.6		375.5
Crown Share		14.1		(2.7	)		2.2			15.9			4.2		—
Offshore Accord		64.5		36.8			33.3			20.0			18.1		8.2
Other Federal Sources		3.6		2.1			2.3			10.2			92.4		41.3
TCA Cost Shared Revenue		22.0		32.4			24.3			75.9			39.7		49.1
Prior Years’ Adjustments		9.0		3.8			1.2			(0.5	)		1.3		—
Ordinary Recoveries		204.0		215.5			264.1			344.8			286.4		296.9
Total Federal Sources		3,253.9		3,302.5			3,354.3			3,584.5			3,651.1		3,753.0
Total Revenue	$	9,387.2	$	9,546.4		$	9,813.4		$	10,580.5		$	10,501.1	$	10,621.2

(1) Revenue by source is presented for the Province’s General Revenue Fund. This information does not include the revenues from other Governmental Units, Government Business Enterprises, and Government Partnership Arrangements. The revenues and expenses of these entities are included within statements prepared for the Consolidated Entity. (See “Government Finance – Summary of Budget Transactions and Borrowing Requirements”.)

Provincial Sources

Provincial own-source revenues of the General Revenue Fund for fiscal year 2018-2019 totaled $6,850.0 million (representing 65.2% of the General Revenue Fund’s revenues) and are estimated to be $6,868.2 million for fiscal year 2019-2020, representing 64.7% of the General Revenue Fund’s revenues. The largest of the Province’s own-source revenues, Personal Income Tax (“PIT”), totaled $2,691.6 million in fiscal year 2018-2019 and are estimated to increase to $2,811.3 million for 2019-2020. The second largest own-source revenue, Harmonized Sales

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Tax (“HST”), totaled $1,843.3 million for 2018-2019 and is estimated to increase to $1,895.9 million for fiscal year 2019-2020. Corporate Income Taxes (“CIT”) totaled $630.9 million in 2018-2019 and are estimated to decline to $604.7 million in 2019-2020.

The Federal Government collects several taxes on behalf of the Province, including personal and corporate income taxes, and the HST.

The Province has a tax on income system for personal income tax. The Provincial tax on income is calculated on federally defined taxable income, and consists of five income tax brackets. The rate for the first bracket, on taxable income up to $29,590, is 8.79%. The rates on the second (taxable income between $29,591 and $59,180) and third (taxable income between $59,181 and $93,000) brackets are 14.95% and 16.67% respectively. The fourth bracket for income above $93,000 is 17.5% and was revised to taxable income between $93,001 and $150,000 effective for the 2010 taxation year and beyond. A fifth bracket was added in 2010 with a rate of 21% on taxable income above $150,000. Prior to 2010 there was a surtax of 10% of provincial tax in excess of $10,000. The fifth tax bracket and the removal of the surtax were temporary measures until the Province returned to a balanced budget position, but the Province announced in the 2018-2019 Budget that the measures would remain in place in all future years.

The general corporate income tax rate is 16% of the corporate taxable income allocated to Nova Scotia under a federally-defined formula set out in regulations. A small business rate of 3.0% applies to the first $500,000 of active business income for Canadian Controlled Private Corporations that have taxable capital of less than $10 million.

On April 1, 1997, HST was implemented in Nova Scotia, replacing the province’s Health Services Tax (11%) and harmonizing the tax base with the Federal Goods and Services Tax (“GST”) of 7%, which was subsequently reduced by the Federal government to 6% on July 1, 2006 and 5% effective January 1, 2008. The HST is a combined Federal and Provincial tax and is collected by the Canada Revenue Agency. Revenues are shared with the Province. The provincial component of the HST is 10%, for a combined rate of 15%.

The HST is a value-added tax levied on most goods and services purchased in Nova Scotia. Certain items such as basic groceries and exports are zero-rated, while others such as residential rents are exempt. Zero-rated supplies are taxable at a rate of zero percent, meaning there is no HST charged on the supply of these goods and services, but the HST registrant can claim an input tax credit. Exempt supplies are goods and services that are not subject to HST, and the registrant cannot claim an input tax credit on expenses related to making exempt goods and services. The Province provides consumer rebates on the provincial component of the HST for residential energy, printed books, first time homebuyers of new residential homes, children’s clothing, children’s footwear, children’s diapers, firefighting equipment, computers for visually and mentally challenged individuals and exterior renovations to heritage properties. Rebates are also available to municipalities, universities, schools, hospitals, charities and non-profit organizations.

Offshore petroleum royalties were $6.9 million in 2018-2019 and are estimated to be zero in 2019-2020. The Sable Offshore Energy Project (“SOEP”) wound up production at the end of 2018, and the Deep Panuke project ceased production in early 2018. An accrual has been made by the Province for the estimated abandonment costs that interest holders in the SOEP will incur over the next number of years.

Federal Sources

Federal sources are made up of three major transfers, Equalization ($1,843.6 million in 2018-2019), the Canada Health Transfer (“CHT”) ($998.8 million in 2018-2019) and the Canada Social Transfer (“CST”) ($366.6 million in 2018-2019). Equalization, CHT and CST are estimated to be $1,942.6 million, $1,039.4 million, and $375.5 million respectively, for the fiscal year 2019-2020 Budget Estimates.

Equalization. Equalization is an unconditional Federal Government transfer that is paid out of Federal Government revenues. First introduced in Canada in 1957, Equalization was subsequently entrenched in the Constitution Act, 1982. Until a new framework agreement in 2004-2005, Equalization was calculated by comparing the fiscal capacity

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of a province, based on 33 tax bases, to a representative standard. This standard was made up of five provinces: Quebec, Ontario, Saskatchewan, Manitoba and British Columbia. If a province’s fiscal capacity was below the per capita capacity of the standard, that province would receive Equalization entitlements. If the province’s fiscal capacity was above the per capita capacity of the standard, it would not receive Equalization entitlements.

The Equalization program has traditionally been renewed every five years. The 2004 renewal was never implemented because a transitional approach, referred to below as the “Interim Approach”, was agreed upon to allow the Federal Government an opportunity to develop a new framework for the program. Under the Interim Approach, the total entitlement to the Equalization receiving provinces was established at $10.9 billion for 2005-2006 and was to increase by 3.5% per annum in each subsequent year. Equalization payments were based on 50% of a Province’s three-year average of entitlements and 50% of a Province’s three-year average of fiscal capacity. The Interim Approach became an on-going concern in determining Equalization payments to the Province of Nova Scotia due to the Offshore Offset Agreement (Offshore Accord).

The Offshore Accord between the Federal Government and the Province of Nova Scotia was signed in February 2005 while the “Interim Approach” in Equalization was in effect. Essentially, the Offshore Accord agreement was to protect Nova Scotia’s offshore natural resource revenues from claw backs under the Equalization program by providing an offset payment for the difference between Equalization payments with Nova Scotia’s offshore natural resource revenues included and Equalization payments with these revenues excluded from the tax base. This arrangement was for the period 2005-2006 to 2011-2012, with the Province eligible for a second eight-year phase of the Offshore Accord which runs from 2012-2013 to 2019-2020, with the Province receiving $89.5 million in 2013-2014, $64.5 million in 2014-2015, $36.8 million in 2015-2016, $33.3 million in 2016-2017, $20.0 million in 2017-2018, and $18.1 million in 2018-2019.

The Federal Budget in 2007 adopted an approach recommended by an Expert Panel on Equalization, comparing the fiscal capacity of a province to the average fiscal capacity of all provinces (a so-called “ten province” standard) using five tax bases and is calculated based on a three-year weighted moving average. Under the implementation of the Expert Panel on Equalization, Nova Scotia was provided with an option to use the “Interim Approach” in Equalization, which included the benefits of the Offshore Accord Agreements. The Province was permitted to elect to opt into the Expert Panel approach in any fiscal year. However, once the Expert Panel approach was selected, the “Interim Approach” would no longer be an option. In October 2007, the Province and the Federal Government agreed upon a “clarification” of the understanding that Nova Scotia is to be the principal beneficiary of its offshore natural resources. The clarification enabled the Province to opt into the Expert Panel approach commencing in 2008-2009 and provides a “Cumulative Best-of Guarantee” to ensure that the Province will in the future be treated as favorably as under the formula in place when the Offshore Accord was signed in 2005 (now referred to as the Interim Approach) over the life of the Offshore Accord. If the cumulative total of Equalization payments and Offshore Offset payments under the Expert Panel approach is less than the cumulative total of Equalization payments and Offshore Offset payments calculated under the Interim Approach formula, the Federal Government will make a payment representing the difference to the Province.

The Province received $82.7 million in 2011-2012 Equalization related to a payment under the Cumulative Best-of Guarantee. This payment was the first year that the cumulative value of the Interim Approach exceeded the cumulative value of the Expert Panel approach. In subsequent years, the Province received additional payments under the Cumulative Best-of Guarantee: $297.3 million in 2012-2013, $260.3 million in 2013-2014, $131.2 million in 2014-2015, $88.2 million in 2015-2016, $10.6 million in 2016-2017, and $16.4 million in 2017-2018. For 2018-19, the Cumulative Best-of Guarantee had an adverse impact of $89.8 million on Equalization payments to the Province, and is estimated to have an adverse impact of $72.6 million in 2019-2020 on Equalization to be paid to the Province as the cumulative value of the Expert Panel has narrowed the gap with the cumulative value of the Interim Approach, and that trend is projected to continue for 2019-2020.

CHT and CST. The CHT and the CST are the Federal Government’s contribution to the Province in respect of its health care, post-secondary education, childcare, early childhood development and social service programs. The amount of Federal assistance does not bear a direct relationship to actual program costs.

The CHT and CST programs were renewed by the Federal Government in 2014-2015 for a 10-year period. For the first three years, a 6.0% annual escalator mechanism was in place for the CHT. Commencing in 2017-2018,

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the annual escalator moved to the moving average of the 3-year average growth rate of national nominal GDP, with a minimum growth rate of 3.0% per year. In 2019-20, the three-year average growth rate of national GDP is 4.64% which will be the growth rate for CHT in that year. The floor rate of 3.0% applied for the 2018-2019 fiscal year. For the CST, the annual escalator remains at 3.0% to the end of the 2022-23 fiscal year.

Stabilization. The Federal Government provides to provinces a stabilization formula under the Federal-Provincial Fiscal Arrangements Act. This legislation provides for Federal grants and interest-free loans to a province if revenue from the province’s own-sources plus equalization falls below 95 per cent of the previous year’s level, excluding variations of natural resource revenue. The Federal-Provincial Fiscal Arrangements Act also provides a limited guarantee arrangement to compensate provinces for certain losses incurred during the calendar year in which a national personal income tax change results in provincial income tax reductions.

Prior Years’ Adjustment (PYA). The Federal Government periodically refines and adjusts prior years’ estimates of CHT and CST based upon revised population estimates. HST and income tax payment forecasts for open taxation years are revised when actual data for the taxation years are received by the Province. PYA from both Federal and Provincial sources were a negative $255.3 million in 2013-2014, a positive $119.2 million in 2014-2015, negative $64.6 million in 2015-2016, a negative $4.6 million in 2016-2017, a positive $230.3 million in 2017-2018, and a positive $2.3 million in 2018-2019. The significant increase in 2017-2018 PYA revenue was primarily accounted for by petroleum royalties being up $232.0 million relating to the refiling of interest holder royalty returns attributable to an arbitration process concerning how transportation costs were treated in the Sable Offshore Energy Project (SOEP) royalty calculations. Offshore petroleum royalty PYAs in 2018-19 also increased by $69.0 million due to a downward revision in the decommissioning cost estimate from the SOEP interest holders.

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Program Expenditures / Expenses

The following table sets forth the expenses by department, interest on public debt, restructuring costs, and pension valuation adjustment of the General Revenue Fund for the fiscal years 2015, 2016, 2017, 2018 and 2019 and the Budget Estimate for the fiscal year ending March 31, 2020.

EXPENSES BY DEPARTMENT FOR GENERAL REVENUE FUND ⁽¹⁾

	Fiscal Year Ending March 31
	2015		2016		2017		2018		2019		Budget 2020
	(in millions)
Department Expenses
Agriculture	$	73.1	$	60.9	$	45.4	$	52.8	$	59.2	$	46.4
Business		151.9		113.7		131.7		366.8		149.4		152.0
Communities, Culture and Heritage		60.6		77.7		97.9		98.4		91.8		93.6
Community Services		920.0		921.3		932.7		957.8		994.8		1,018.1
Education and Early Childhood Development		1,222.4		1,240.7		1,274.1		1,327.9		1,407.1		1,429.3
Energy & Mines		—		—		—		52.5		42.0		49.0
Energy		31.7		30.0		36.7		—		—		—
Environment		25.9		24.8		36.4		36.3		38.0		38.5
Finance and Treasury Board		12.7		20.7		26.9		21.0		23.0		23.7
Fisheries & Aquaculture		9.4		9.9		12.3		14.7		20.9		21.5
Health & Wellness		4,076.9		4,090.6		4,104.6		4,278.4		4,413.9		4,638.5
Internal Services		155.5		144.2		186.1		188.6		204.0		193.8
Justice		322.2		326.5		329.6		340.6		355.3		361.4
Labor & Advanced Education		357.7		358.2		381.6		377.8		368.6		396.2
Assistance to Universities		375.5		374.7		461.4		475.9		430.2		427.8
Lands & Forestry		—		—		—		77.7		130.0		76.8
Municipal Affairs		151.5		158.8		198.4		284.4		209.5		213.2
Natural Resources		88.5		82.0		79.6		—		—		—
Public Service		206.4		191.2		198.8		208.0		207.7		220.3
Seniors		1.4		1.5		1.5		2.2		2.6		2.7
Transportation & Infrastructure Renewal		433.4		502.9		522.3		558.7		551.9		497.3
Restructuring Costs(2)		138.7		98.6		53.6		81.7		122.5		201.5
Total Department Expenses		8,815.5		8,829.0		9,111.8		9,802.3		9,822.4		10,101.8
Tax Credits and Rebates		134.0		120.6		133.7		115.1		124.5		134.3
Pension Valuation Adjustment		76.2		141.8		17.2		57.3		56.5		51.8
Debt Servicing Costs		874.1		854.0		837.0		836.9		865.8		856.1
Total Expenses	$	9,899.8	$	9,945.4	$	10,099.7	$	10,811.6	$	10,869.2	$	11,144.1

(1) Expenses by department and debt servicing costs are presented for the General Revenue Fund. The cost of tangible capital assets are capitalized and amortized to Expenses over the useful life of the assets. This information does not include the expenses from other Governmental Units, Government Business Enterprises, or Government Partnership Arrangements. The revenue and expenses of the entities are included within statements prepared for the Consolidated Entity. See “Government Finance – Summary of Budget Transactions and Borrowing Requirements.”

(2) Includes retroactive wage payments due to subsequent wage negotiations, provides for the current and prior year’s costs expended on corporate initiatives – costs that are not incurred at the discretion of a department, and would not normally be part of a department’s operations and/or may not be directly attributable to any one department.

Departmental expenses, consisting of program expenses and the amortization of tangible capital assets, were $10,869.2 million for fiscal year 2018-2019 and are estimated to be $11,144.1 million for fiscal year 2019-2020.

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Health, Education, and Community Services

Health and Wellness and education (including Assistance to Universities) are the two largest areas of expense from the General Revenue Fund. These amounts totaled $4,413.9 million and $1,837.3 million, respectively, for the fiscal year ended March 31, 2019, and are estimated to be $4,638.5 million and $1,857.1 million, respectively, for the fiscal year 2019-2020.

In the field of health care, the Province administers a universal and comprehensive medical services and hospital care plan, a dental care program for residents less than 10 years of age, and provides pharmaceutical services for residents 65 years of age and over and Nova Scotians with no other health coverage. In the field of education, the Province makes grants to school boards and community colleges, and assists universities through operating grants.

Community Services include the provision of direct assistance to persons with disabilities and other disadvantaged individuals and families who require long-term assistance, residential care for persons with disabilities, short-term social assistance, and the provision of direct service to the public. Community Services expenses from the General Revenue Fund totaled $994.8 million for the fiscal year ending March 31, 2019, and are estimated to be $1,018.1 million for the fiscal year 2019-2020.

Business

The Department of Business provides strategic direction and leadership to all Nova Scotia government departments, crown corporations and agencies to achieve alignment on strategy and operations for business and social enterprise growth. Tourism activities are mandated to Tourism Nova Scotia with the Department of Business assuming responsibility for the agency. Expenses from the General Revenue Fund under the Department of Business totaled $149.4 million in the fiscal year ending March 31, 2019, and are estimated to increase to $152.0 million in fiscal year 2019-2020. The decrease in expenses for 2018-2019 compared to 2017-2018 were primarily the result of $180.0 million in increased funding to the Nova Scotia Internet Funding Trust to support rural highspeed internet and a one-time expense of $11.1 million towards International Air Service, each of which was incurred in 2017-2018..

Resource and Industrial Development

The Province is engaged in a wide range of resource and industrial development activities, including direct assistance grants, development and maintenance of natural resources, and consulting services to industry (the Departments of Agriculture, Fisheries & Aquaculture, Energy & Mines, and Lands & Forestry). Expenses from the General Revenue Fund in these areas totaled $252.1 million for the fiscal year ending March 31, 2019, and are estimated to be $193.7 million in fiscal year 2019-2020. The decreases in estimated expenses in 2019-2020 compared to 2018-2019 are due to a one-time expense of remediation costs related to abandoned mines sites incurred in 2018-2019.

Internal Services

The Department of Internal Services provides common services and supports to government departments and other public organizations. These include financial transactions, audit operations, information and communications technology, procurement, government wide corporate supports, as well as assistance in administering the Freedom of Information and Protection of Privacy Act and the Records Act. Expenses from the General Revenue Fund under Internal Services totaled $204.0 million in the fiscal year ending March 31, 2019, and are estimated to decrease to $193.8 million in fiscal year 2018-2019.

Public Service

The Province provides a number of essential services, statutory or other, which are necessary for the efficient and/or effective operation of government. There are also programs and activities that provide a benefit to the whole of government but cannot be specifically identified with any other function. Expenses from the General Revenue Fund under Public Service totaled $207.7 million in the fiscal year ending March 31, 2019 and are estimated to increase to $220.3 million in fiscal year 2019-2020.

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Justice

The Province is engaged in activities for the provision of protection of a legal nature to persons and property; public services of a general nature, which lead to a higher degree of personal safety; and the protection of the environment. Expenses from the General Revenue Fund for Justice were $355.3 million in the fiscal year ending March 31, 2019 and are estimated to be $361.4 million in fiscal year 2019-2020.

Transportation and Infrastructure Renewal

The Province is engaged in a wide range of activities to facilitate the effective and efficient movement of persons and property and general communications between people, with the associated dispersal of knowledge. Transportation and Infrastructure Renewal expenses from the General Revenue Fund are estimated to decrease from $551.9 million in the fiscal year ending March 31, 2019 to $497.3 million in fiscal year 2019-2020. There is an expected decrease in expenses for 2019-2020 compared to 2018-2019 primarily due to a one-time expense of $35.4 million for the Boat Harbour remediation project that was incurred in 2018-2019. There is no budgeted expense for this item in 2019-2020, thus the decline in expenses in 2019-2020 compared to the previous fiscal year.

Municipal Affairs

The Department of Municipal Affairs expenses in fiscal year ending March 31, 2019 were $209.5 million and are estimated to increase to $213.2 million in fiscal year 2019-2020. The decrease in expenses to $209.5 million in 2018-2019 compared to$284.4 million in 2017-2018 in this department were primarily due to decreased municipal grants and programs made by the Province, and in part from a reduction in amounts received from the Federal government through the following programs: New Building Canada Fund, Clean Water Wastewater Fund, and Public Transit and Infrastructure Fund compared to 2017-2018.

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Loans and Investments

Under the authority of various Provincial statutes, the Province provides loans to, and makes investments in, its own corporations and agencies, and other entities. The loans and investments relate to programs for the promotion of resource and industrial development, the provision of low-cost and senior-citizen housing and the provision of funding for various Crown agencies and municipalities. Loans are repayable, and assets of Government-owned or other entities support investments.

The following table sets forth the balances of loans and investments of the Province for the Consolidated Entity, net of allowances for un-collectable amounts adopting the accounting policies described in “Government Finance – Specific Accounting Policies” above.

LOANS AND INVESTMENTS FOR CONSOLIDATED ENTITY

	As at March 31, 2019
	(in millions)
	Gross		Provisions		Net
Loans of the General Revenue Fund
Nova Scotia Farm Loan Board	$	180.5	$	16.2	$	164.3
Student Loans, direct lending		230.2		96.0		134.2
Fisheries Loan Board		156.7		2.0		154.8
Halifax Dartmouth Bridge Commission		160.0		—		160.0
Harbourside Commercial Park Inc.		1.0		—		1.0
Housing Nova Scotia		530.9		4.6		526.3
Nova Scotia Business Incorporated		29.5		11.9		17.6
Nova Scotia Innovation Corporation		2.7		0.9		1.8
Nova Scotia Jobs Fund		489.3		170.0		319.4
Nova Scotia Municipal Finance Corporation		778.8		—		778.8
Miscellaneous		0.7		0.6		0.1
	$	2,560.3	$	302.0	$	2,258.3
Investments of the General Revenue Fund
Art Gallery of Nova Scotia	$	3.9		—	$	3.9
Gambling Awareness Foundation		4.1		—		4.1
Nova Scotia Business Incorporated		19.4		19.0		0.4
Nova Scotia Community College		16.4		—		16.4
Nova Scotia Health Authority		48.4		—		48.4
Nova Scotia Innovation Corporation		49.6		4.8		44.8
Nova Scotia Jobs Fund		25.9		23.9		2.0
Nova Scotia School Insurance Program		8.0		—		8.0
Perennia Food and Agriculture Inc		4.5		—		4.5
Public Archives of Nova Scotia		2.2		—		2.2
	$	182.3	$	47.7	$	134.6
Total Loan and Investments	$	2,742.6	$	349.7	$	2,392.9

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PROVINCIAL DEBT

Funded Debt

The following table sets forth the funded debt of the Province for the General Revenue Fund as described in “Government Finance – Specific Accounting Policies” above, outstanding at March 31 in each of the five fiscal years ended March 31, 2015 through to March 31, 2019, each as audited under the Province’s accounting policies in effect at the time. Figures have not been restated for accounting changes, and as a result may not be directly comparable.

FUNDED DEBT FOR THE GENERAL REVENUE FUND⁽¹⁾

	2015			2016			2017			2018			2019
	(millions $)
General Revenue Fund Funded Debt:
Payable in Canadian Dollars
Canadian Pension Plan Fund (2)(3)	$	1,079.4		$	1,079.4		$	1,079.4		$	1,079.4		$	1,052.3
Other		14,557.4			14,619.9			14,407.4			14,794.9			14,911.9
		15,636.7			15,699.3			15,486.8			15,874.3			15,964.2
Capital Leases		195.1			165.0			134.3			216.6			180.7
Other Long-term Indebtedness		93.7			77.9			18.4			13.6			10.4
Total General Revenue Fund Funded Debt	$	15,925.5		$	15,942.1		$	15,639.4		$	16,104.5		$	16,155.3
Less: Sinking Fund and Public Debt Management Fund (3)(4)		2,675.8			2,595.8			2,712.5			2,835.4			2,768.0
Net Funded Debt (5)	$	13,249.7		$	13,346.4		$	12,926.9		$	13,269.1		$	13,387.3
Per Capita ($) (6)	$	14,118.0		$	14,251.3		$	13,711.2		$	13,957.2		$	13,946.6
As a Percentage of:
Household Income (6)		34.2	%		33.4	%		32.1	%		31.7	%		31.0	%
Gross Domestic Product at Market Prices (6)		33.3	%		32.8	%		31.1	%		30.9	%		30.2	%

(1) As of December 6, 2019, there were debt retirements of $1,460.6 million, and a debt issuance of $300 million in 2019-2020.

(2) Debentures held by the Canada Pension Plan Fund are payable 30 years after their respective dates of issue, are not negotiable, are not transferable or assignable, but are redeemable in whole or in part before maturity at the option of the Minister of Finance of Canada, on six months’ prior notice, if deemed necessary to meet the requirements of the Canada Pension Plan.

(3) Debentures payable in foreign currencies and related sinking funds invested in foreign currencies are reflected at rates of the currency-swap contracts.

(4) At March 31, 2019, the Public Debt Management Fund held $910.4 million that is available to repay or retire debentures of the Province at the discretion of the Minister of Finance and Treasury Board.

(5) Funded debt does not include any unfunded pension liabilities or other retirement benefits of the Province.

(6) Population at July 1 for the previous calendar year. Household Income (Personal Income has been replaced with Household Income by Statistics Canada, the concepts are similar) and Gross Domestic Product at Market Prices for the previous calendar year.

In addition to the debt of the General Revenue Fund, there is funded debt with other entities that comprise part of the Consolidated Entity. The major entities not included in the General Revenue Fund are Nova Scotia Power Finance Inc., the Housing Nova Scotia, and the Nova Scotia Municipal Finance Corporation. As at March 31, 2019, total funded debt of the Consolidated Entity was $17,039.3 million.

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Derivative Financial Instruments

The Province is party to financial instruments with off-balance sheet risk, either to hedge against the risks associated with fluctuations in foreign exchange rates or to manage risks associated with interest rate fluctuations. Foreign currency contracts are used by the Province to convert the liability for foreign currency borrowing and associated costs into Canadian dollars. The Province uses interest rate swap contracts to convert certain interest payments from fixed interest rates to floating interest rates.

The Department of Finance and Treasury Board credit policy states that it executes derivative transactions only with counterparties that have a minimum credit rating of “A” with a stable outlook as determined by major credit rating agencies.

As at March 31, 2019, the Province had outstanding 37 interest rate swap contracts to convert certain interest payments from a fixed to floating basis. These swaps have terms remaining of 0.2 to 14.6 years, a notional principal value of $1.1 billion and a mark-to-market value of $8 million. (Mark-to-Market is an indication of the swap’s market value at a certain date. This represents the estimated realizable gain (loss), and is equivalent to the present value of future savings (losses) based on market conditions as at March 31, 2019.)

The Province has also executed numerous foreign currency swap contracts to convert foreign currency denominated debt into Canadian dollar denominated debt. The mark-to-market of these swap contracts are as follows:

Termination Date	Original Currency	Original Principal		Current Currency	Current Principal		Mark-to-Market
		(thousands)			(thousands Canadian $)		(millions Canadian $)
SWAPS:
April 16, 2019	UK£		60,000	CDN$	$	114,387	($	10.5	)
Sub-total:	UK£		60,000	CDN$		114,387	($	10.5	)
July 1, 2019	US$		200,000	CDN$		199,900		52.8
November 15, 2019	US$		244,000	CDN$		246,318		67.0
March 1, 2020	US$		300,000	CDN$		409,200		(9.6	)
May 1, 2021	US$		300,000	CDN$		312,002		81.1
April 1, 2022	US$		300,000	CDN$		379,517		22.4
July 30, 2022	US$		300,000	CDN$		329,310		58.2
Sub-total:	US$	$	1,644,000	CDN$	$	1,876,247	$	271.9
Grand total:					$	1,990,634	$	261.3

Debt Maturities and Sinking Funds

The following table sets forth the maturities of total funded debt and related sinking fund balances, at March 31, 2019, from the General Revenue Fund as described in “Government Finance – Specific Accounting Policies” above, adopting the accounting policies, other than consolidation of government entities, described in “Government Finance – Specific Accounting Policies” above. At March 31, 2019, all debt denominated in currencies other than Canadian dollars had been swapped to Canadian dollars.

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SCHEDULE OF DEBT MATURITIES, CAPITAL LEASE PRINCIPAL PAYMENTS

AND RELATED SINKING FUND BALANCES FOR THE GENERAL REVENUE FUND

Period Ending	Total Debt in
March 31	Canadian		Sinking Fund &
	Dollars (1)		PDMF
	(in millions)
Public Debt Management Fund			$	910.4
2020		2,083.1		830.4
2021		1,080.8		—
2022		1,715.9		441.9
2023		1,734.2		585.3
2024		336.4		—
2020-2024		6,934.2		1,857.6
2025-2029		2,076.2
2030-2034		922.5		—
2035-2039		1,493.1		—
2040-2044		2,299.5		—
2045-2049		325.0		—
2050-2063		2,088.8		—
Sub-total:	$	16,155.3	$	1,857.6
Total:			$	2,768.0

(1) Canadian dollar-equivalent at rates of exchange in effect on swap contracts at March 31, 2019.

The Province makes sinking fund installments on seven debentures that contain sinking fund bond covenants. The last of those debentures matures on July 30, 2022. On these sinking fund issues, annual sinking fund installments are required to be either the minimum of 0.75 per cent or 1 per cent of the par value of each original issue, or in the case where the existing sinking fund plus interest and reinvested interest to be earned thereon, together with the sinking fund contribution to be paid into the sinking fund and reinvested interest to be earned thereon, would be in excess of the principal amount of the debenture outstanding at maturity, the amount to be paid by the Province on such payment date may be reduced by the amount of such excess. The contribution rates on the remaining seven sinking fund debentures ranges from zero to 1.9 per cent of the par value, with these rates being based on actual cash flows on the existing sinking fund assets and the anticipated rates of return on expected future cash flows of sinking fund assets. These figures are recalculated annually based on actual and expected investment returns. Sinking fund payments relating to debentures payable in US dollars were adjusted each year to reflect exchange rate movements from the date of issuance of the debentures to the date of being hedged to Canadian dollars. Sinking funds required by bond covenant are treated as restricted assets and are used solely for the retirement of specific debt issues. During the fiscal year 2018-2019, a $24.1 million contribution was made to the sinking fund, total earnings of the sinking fund and Public Debt Management Fund were $106.5 million.

Sinking fund assets are recorded at cost, which includes premiums and discounts associated with the purchase of these investments. These premiums and discounts are amortized on a straight-line basis over the term of the related investment. The unamortized portion of the premiums and discounts are included as part of the value of sinking funds. As of March 31, 2019, the net unamortized premium was $7.3 million.

Annual cash contributions into the sinking fund and Public Debt Management Fund are invested in approved securities. Assets consist primarily of debentures of the provinces and Government of Canada with floating and fixed interest rates. Regarding the latter, the fixed interest rates on funds held at March 31, 2019, ranged from 1.5% to 9.6%, for Canadian funds, and from 8.25% to 9.50%, for U.S. funds. Earnings on investments are retained and reinvested in each of the sinking fund and Public Debt Management Fund. Sinking funds for debentures payable in U.S. currency are maintained in both Canadian and U.S. dollars. Debentures payable in foreign currencies, accrued interest thereon, and related sinking funds invested in foreign currencies are reflected in the accounts of the Province at the rate associated with the swap contract.

39

At March 31, 2019, the Province held $464.5 million in carrying value of its own debentures (carrying value of $493.9 million at March 31, 2018) in sinking funds as investments. Of the $2,768.0 million the Province held in financial assets for debt retirement at March 31, 2019, $910.4 million is held in the Public Debt Management Fund, and $1,857.6 million in mandatory sinking funds. Total market value of both funds was $2,926.8 million at March 31, 2019.

The following table sets forth the sinking funds, by currency, of funded debt of the Province for the General Revenue Fund (as described in “Government Finance – Specific Accounting Policies” above) at March 31, 2019, adopting the accounting policies, other than consolidation of government entities, described in “Government Finance – Specific Accounting Policies” above.

PROVINCIAL RESTRICTED SINKING FUNDS FOR THE GENERAL REVENUE FUND

	As at March 31, 2019
	(in millions)
For Issues Payable in:
Canadian Dollars	$	168.3
United States Dollars (1)		1,689.3
	$	1,857.6

(1) Canadian dollar-equivalent at rates of exchange in effect on swap contracts at March 31, 2019.

Based on rates of return on investments held in the sinking funds and the schedule of maturities for debt outstanding at March 31, 2019, the Province estimates debt refinancing requirements (net principal repayments, capital lease payments and sinking fund contributions) for the Consolidated Entity to be $1,236.2 million for the fiscal year 2019-2020, $1,099.1 million for the fiscal year 2020-2021, $1,219.2 for the fiscal year 2021-2022, $1,038.2 million for the fiscal year 2022-2023, and $348.9 million for the fiscal year 2023-2024.

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Current Liabilities

The following table sets forth the amount of short-term debt of the Consolidated Entity (as described in “Government Finance – Specific Accounting Policies” above) for the fiscal years 2015, 2016, 2017, 2018 and 2019, adopting the accounting policies as described in “Government Finance – Specific Accounting Policies” above.

SHORT-TERM DEBT FOR THE CONSOLIDATED ENTITY

	Fiscal years Ended March 31
	2015		2016		2017		2018		2019
	(Millions $)
Bank Advances and Short-term Borrowings	$	549.9	$	576.2	$	1,171.0	$	978.2	$	1,078.2
Accounts Payable & Accrued Liabilities		1,931.6		1,937.2		2,064.1		2,098.0		1,831.4
Accrued Interest		215.8		216.8		215.0		214.9		219.8
	$	2,697.3	$	2,730.2	$	3,450.1	$	3,291.1	$	3,129.4

Offsetting the above current liabilities, current assets (cash and short-term investments, accounts receivable, and loans receivable) for the Consolidated Entity at March 31, 2019 totaled $4,500.9 million.

There is a significant accrued liability by the Province for the environmental liability at Boat Harbour in Pictou County. As at March 31, 2019, a liability of $230.0 million (2018 – $204.9 million) has been recognized for the remediation of effluent on site. At this stage in the process, the Province continues to test and refine its current remediation strategy, and as a result there is still significant measurement uncertainty related to this estimate.

Guaranteed Debt

The Province provides the guarantee of repayment on certain payment obligations to third parties. The majority of guarantees are related to social housing and economic development initiatives. The following table sets forth the guaranteed debt of the Consolidated Entity, excluding MFC debt that is guaranteed by the Province that is also owned by the Province, which is eliminated upon consolidation, for the fiscal years 2015, 2016, 2017, 2018 and 2019. All guaranteed debt is denominated in Canadian dollars except for a US $5 million guarantee, authorized but not utilized at March 31, 2019, by the Department of Transportation and Infrastructure Renewal.

GUARANTEED DEBT FOR CONSOLIDATED ENTITY

	Fiscal years Ended March 31
	2015			2016			2017			2018			2019
	(Millions $)
Total Guaranteed Debt	$	124.0		$	118.3		$	205.4		$	162.1		$	98.2
Deduct:
Provision for Guarantee Payout		(11.9	)		(5.8	)		(114.0	)		(89.0	)		(31.3	)
Net Guarantees not Reflected in Statements	$	112.1		$	112.5		$	91.4		$	72.9		$	66.8

The table for guaranteed debt for the Consolidated Entity does not include the $750.5 million of gross debt, as at March 31, 2019, of the Nova Scotia Power Finance Corporation debt guaranteed by the Province of Nova Scotia, which has been fully defeased by assets held in trust by the Nova Scotia Power Finance Corporation.

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Pension Funds

The Province evaluates its pension funds using two methods. The first method, as prescribed by the CPA of Canada, measures a plan sponsor’s potential liability, with rates of return based on management’s best estimate (and gains and losses amortized over time). The financial statements of the Province’s pension plans calculated on this basis are provided in Note 5 to Public Accounts for the fiscal year 2018-2019, Volume 1, filed on August 6, 2019, as Exhibit (1) to the Province’s Form 18-K/A, Amendment No. 1, for the fiscal year ended March 31, 2018. The second method, used for the purpose of determining the funded status of the plan on a going-concern basis, as well as the total current service cost and contributions to the plan for the upcoming year, uses a rate of return based on management’s best estimate less a margin for conservatism. The tables and discussions included in the following section are shown using the latter funding basis of calculation.

Public Service Superannuation Fund

The Public Service Superannuation Plan (“PSSP”) is governed by its own pension legislation, the Public Service Superannuation Act, which was extensively updated in April 2012. The PSSP transitioned to a joint governance structure on April 1, 2013. Prior to that date the Minister of Finance and Treasury Board was sole trustee. The trustee of the Public Service Superannuation Plan is the Public Service Superannuation Plan Trustee Inc (“PSSPTI”). At the direction of, and under the oversight of the trustee, the Nova Scotia Pension Services Corporation administers the PSSP.

Due to the 2012 legislative changes, the Province no longer has legal liability for the PSSP as of April 1, 2013, and therefore no longer carries an asset or liability associated with the PSSP on its financial statements. The Province’s pension expenses for the PSSP are now limited to contributions paid to the PSSP as an employer, which are equal to the employee contributions. The contribution rate is set by PSSPTI pursuant to the funding policy and is set for a five-year cycle. Based on PSSPTI’s review of the PSSP’s funded health as of March 31, 2015, indexing of 0.85 per cent per year was approved for January 1, 2016 to December 31, 2020 and no changes to member and employer plan contribution. The employer contributions to the PSSP in 2018-2019 were $104.8 million.

Provincial legislation and regulations provide that certain payments to pensioners are charged to the General Revenue Fund rather than to the Superannuation Fund. These payments, total and net of recoveries, amounted to $11.3 million and $10.5 million, respectively, for the fiscal year ended March 31, 2019.

Teachers’ Pension Fund

Until April 1, 2006, the Minister of Finance & Treasury Board was the trustee of the Teachers’ Pension Fund (the “Teachers’ Fund”). Effective April 1, 2006, under a joint trust agreement between the Province of Nova Scotia and the Nova Scotia Teachers’ Union, the Teachers’ Pension Plan Trustee Incorporated replaced the Minister of Finance & Treasury Board as trustee.

On June 12, 2014, the Government of Nova Scotia and the Nova Scotia Teachers Union agreed to changes to the Teachers’ Pension Plan. The contribution rate increased by three percentage points and the disability pension provisions moved from the pension plan to the teachers’ long-term disability insurance plan. The contribution rate increase was spread over three years, with the first one percentage point increase beginning August 1, 2014.

Teachers employed by the school boards and Nova Scotia Community College are entitled to receive pension benefits pursuant to the provisions of a plan established under the Teachers’ Pension Act. Employees’ and matching employer contributions are paid into the Teachers’ Fund, while pensions, refunds and transfer values are paid from the Fund. The Teachers’ Fund is invested in Federal, provincial, municipal and corporate securities, hedge funds and real estate.

The annual financial statements of the Teachers’ Fund are audited by an auditor appointed by the trustee. The auditor for the most recent financial statements was KPMG. The following table sets the continuity of the Teachers’ Fund, as audited, for the five fiscal years ended December 31, 2018.

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STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS OF THE

TEACHERS’ PENSION FUND

	Fiscal Year Ended December 31
	2014		2015		2016		2017		2018
	(in millions)
Opening Balance	$	4,559.3	$	4,729.0	$	4,740.5	$	4,900.2	$	5,111.1
Add:
Employee Contributions		72.3		83.7		92.4		98.6		102.8
Employer Contributions		80.1		96.6		101.9		112.7		118.2
Income Earned and change in Market
Value of Investments		415.8		237.0		376.7		412.8		24.8
Transfers from other pension plans		3.1		1.1		1.0		2.4		3.3
		571.3		418.4		571.9		626.4		249.1
		5,130.6		5,147.4		5,312.4		5,526.7		5,360.2
Deduct:
Pensions Paid		376.7		381.6		387.0		392.5		398.7
Refunds & Transfers Out		4.9		3.9		3.5		1.4		2.0
Operating Expenses		19.9		21.5		21.7		21.7		21.6
		401.6		406.9		412.2		415.6		422.3
Closing Balance	$	4,729.0	$	4,740.5	$	4,900.2	$	5,111.1	$	4,937.9

The latest actuarial valuation, for funding purposes, of the Teachers’ Fund was performed by Eckler Limited as at December 31, 2018. The major economic and demographic assumption used in the December 31, 2018 valuation remained unchanged from those used in the December 31, 2017 valuation. The assumption for promotional salary increases continues to range from 0.00% to 3.25%. The net of expenses discount rate (total rate of return on assets) unchanged in the December 31, 2018 valuation to 6.05%. The assumed retirement age remained unchanged from a 50% probability of active members who achieve eligibility for an unreduced pension under the rule of 85 prior to age 62 retiring when they first become eligible and the remainder of active members and all inactive members retiring at the earliest of; (i) age 65 with 2 years of services, (ii) 35 years of service, and (iii) age 62 with 10 years of service. The mortality table also remained unchanged from the 2014 Public Sector Mortality Table projected generationally with CPM Improvement Scale B. The actuarial valuation indicated that at December 31, 2018, the Teachers’ Fund had actuarial liabilities with a present value of $6,555.5 million, and assets of $4,937.9 million, resulting in an unfunded liability of $1,617.6 million and a funded ratio of 75.3%.

The benefit of any actuarial surpluses or the responsibility for any actuarial deficits are shared equally by the Province and the beneficiaries of the Fund.

Sydney Steel Corporation Superannuation Fund

The Sydney Steel Corporation Superannuation Fund was established under the Sydney Steel Corporation Sale Act effective February 28, 2001. The Fund assumed responsibility for the assets and obligations of the former Sydney Steel Corporation pension plans. Under subsection 7(9) of the Sydney Steel Corporation Sale Act, the Province of Nova Scotia has assumed responsibility to fund any shortfalls arising under this Fund. Three pension plans are covered by the Fund.

• United Steelworkers of America Pension Plan is a non-contributory defined benefit plan that covers employees of Sydney Steel Corporation who are member of Locals 1064, 6516, 6537 of the United Steelworkers of America. Under the plan, contributions were made only by Sydney Steel Corporation.

• Salaried Pension Plan is a partially contributory defined pension plan covering the salaried employees of Sydney Steel Corporation. Under the plan, contributions were made by plan members and by Sydney Steel Corporation.

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• Canadian Union of Public Employees’ Pension Plan is a non-contributory defined benefit plan that covers employees of Sydney Steel Corporation who are members of Local 1675 of the Canadian Union of Public Employees. Under the plan, contributions were made only by Sydney Steel Corporation.

Grant Thornton audits the annual financial statements of the Sydney Steel Corporation Superannuation Fund.

There are no active pension plan members in the Sydney Steel Corporation Superannuation plan. As at March 31, 2007 the United Steelworkers of America Pension Plan and the Canadian Union of Public Employees’ Pension Plan were exhausted of funds. The funds of the Salaried Pension Plan were exhausted in October 2007. All benefit payments and administration expenses are funded by the Minister of Finance and Treasury Board through special payments to the Fund from the Province’s General Revenue Fund. The Province has provided the following payments in recent years: $16.3 million in 2014-2015, $15.0 million in 2015-2016, $14.0 million in 2016-2017, and $13.1 million in 2017-2018, and $12.3 million in 2018-2019.    

The most recent actuarial valuations of the three pension plans funded from the Sydney Steel Corporation Superannuation Fund were performed by Mercer as at September 30, 2017 and extrapolated to March 31, 2019. The major economic and demographic assumptions used in an extrapolation to March 31, 2019 included a discount rate of 3.29%, an inflation rate of 2.0% and a 100% probability that a member would retire at the earliest age at which he or she would be eligible for an unreduced pension. The actuarial valuations performed on September 30, 2017 and extrapolated to March 31, 2019 indicate the plans had a combined unfunded pension liability of $137.8 million, allocated as follows: United Steelworkers of America Pension Plan had $98.4 million, Salaried Pension Plan had $37.9 million, and Canadian Union of Public Employees’ Pension Plan had $1.5 million.

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PUBLIC SECTOR FUNDED DEBT

Public Sector Funded Debt

The debt burden for which the Province is responsible consists of the funded debt and guaranteed debt of the Consolidated Entity. Debt of the Consolidated Entity includes debt borrowed by the Province, the proceeds of which are lent to municipalities through the Municipal Finance Corporation (“MFC”). This debt does not include the debt of municipalities that is either borrowed from the Federal Government or third-party sources. Borrowings by municipalities from the Federal Government or third-party sources are not material. By law, municipalities may only incur debt with financial institutions on a short-term basis until long-term financing is arranged with the MFC. Also, Debt of the Consolidated Entity does not include debt of Government Business Enterprises totaling $54.8 million, which is deemed to be self-supporting. For further information regarding the Government Business Enterprises, see Schedule 6 to the Public Accounts for the fiscal year 2018-2019, Volume 1, filed on August 6, 2019, as Exhibit (1) to the Province’s Form 18-K/A, Amendment No. 1, for the fiscal year ended March 31, 2018.

The following table sets forth the Consolidated Entity outstanding and guaranteed funded debt for the five fiscal years ended March 31, 2019.

CONSOLIDATED ENTITY FUNDED DEBT ⁽¹⁾

	2015			2016			2017			2018			2019
	(in millions unless otherwise indicated)
General Revenue Fund Funded Debt (2)	$	15,925.5		$	15,942.1		$	15,639.4		$	16,104.4		$	16,155.3
Miscellaneous Debt(3)		8.0			10.1			10.0			11.7			7.8
Debt of the Consolidated Entity		15,933.5			15,952.2			15,649.4			16,116.1			16,163.1
Guarantees of the Consolidated Entity:
Industrial Development and Other		57.1			61.8			50.3			49.1			52.7
Federal Loans		—			—			107.3			77.6			19.6
Mortgages(4)		66.9			56.5			47.8			35.4			25.9
Total Guaranteed Debt		124.0			118.3			205.4			162.1			98.2
Total Consolidated Entity Funded Debt & Guaranteed Debt		16,057.5			16,070.5			15,854.8			16,278.3			16,261.3
Deduct Sinking Funds and Debt Management Fund		2,675.8			2,595.8			2,712.5			2,835.4			2,768.0
Net Funded Debt & Guaranteed Debt of the Consolidated Entity	$	13,381.7		$	13,474.8		$	13,142.3		$	13,442.96		$	13,493.3
Per Capita ($) (5)	$	14,258.6		$	14,388.4		$	13,969.7		$	14,140.0		$	14,057.1
As a Percentage of:
Household Income (5)		34.6	%		33.7	%		32.7	%		32.1	%		31.3	%
Gross Domestic Product at Market Prices (5)		33.6	%		33.1	%		31.6	%		31.3	%		30.4	%

(1) Debentures payable in foreign currencies and related sinking funds invested in foreign currencies are reflected at rates of exchange in currency-swap contracts. This measure of debt does not include the debt of Government Business Enterprises.

(2) See table on “Funded Debt for the General Revenue Fund”, for more detailed information on this figure.

(3) Miscellaneous debt does not include debt of Housing Nova Scotia ($125.7 million at March 31, 2019), a Provincial crown corporation, which debt is secured by mortgages held by the Corporation, or NS Power Finance Corporation ($750.5 million at March 31, 2019), as this debt is fully defeased.

(4) The Province guarantees certain debt of industrial development agencies, and mortgages of Housing Nova Scotia.

(5) Population as of July 1 of the preceding calendar year, Household Income and Gross Domestic Product at market prices are for the previous calendar year.

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CERTAIN CROWN CORPORATIONS AND AGENCIES

Crown corporations and agencies are special purpose entities to which the Province has delegated responsibility for the operation of certain of its programs. These entities are subject to policy direction by the Government and have been provided with financial assistance from the Province, where required, either through debt guarantees, loans, equity investments, or grants. See “Government Finance – Loans and Investments”, and “Provincial Debt – Guaranteed Debt”. The Province prepares Consolidated Financial Statements whereby the operating results of the crown corporations and agencies became part of the consolidated Provincial surplus / (deficit).

Sydney Steel Corporation and Sydney Tar Ponds Agency

Sydney Steel Corporation (“Sysco”), a Provincial Crown Corporation established by an Act of the House of Assembly in 1967, owned a steel mill in Sydney, Nova Scotia that ceased operations in July 2000. With the Corporation’s operations being discontinued, work was undertaken to dismantle and sell the remaining assets, perform environmental cleanup, and conduct development activities for future land use. Sysco will continue to exist to address residual issues arising from historic operations.

The Sydney Tar Ponds was a hazardous chemical waste site adjacent to Sysco created by discharges from Sysco’s coke ovens into an adjacent creek. Engineering and environmental studies generated estimates for the cost of remediation of the Sydney Steel Corporation and adjacent sites as well as the Sydney Tar Ponds site. The Province recorded liabilities totaling $318.5 million in 2000, and in 2006-2007 there was a further $58.8 million contributed by Sydney Steel Corporation to the environmental site clean-up provision (Sysco Decommissioning Fund). At March 31, 2019, $65.4 million remains unspent in the Sysco Decommissioning Fund. The provision will continue to be utilized for long-term maintenance and monitoring of the Sydney Tar Ponds site. Based on currently available information, the provision, in aggregate, appears to be sufficient to cover the estimated costs to remediate these sites.

Nova Scotia Municipal Finance Corporation

Nova Scotia Municipal Finance Corporation (“MFC”) acts as a central borrowing agency for municipalities and municipal enterprises in Nova Scotia. The MFC also has two loans to provincial health authorities. Under the incorporating legislation, municipalities and municipal enterprises are required to raise their long-term capital requirements through the MFC except for borrowings from the Federal Government, the Province, another municipality, or their agencies. At March 31, 2019, the outstanding borrowings by municipalities ($533.6 million), municipal enterprises ($245.1 million) and health authorities ($3.4 million) from the MFC stood at $782.2 million.

Nova Scotia Power Finance Corporation

On August 12, 1992, the Province of Nova Scotia completed the public sale of all the common shares of Nova Scotia Power Inc. (“NSPI”), an electric utility that had assumed the net operating assets of Nova Scotia Power Corporation (“NSPC”). Prior to that date, the utility was a Provincial Crown Corporation. Neither the Province nor Nova Scotia Power Finance Corporation will guarantee, assume or otherwise be responsible for any obligations of NSPI, and NSPI agreed to indemnify Nova Scotia Power Finance Corporation and the Province against any claims arising out of the liabilities and commitments assumed by NSPI.

In accordance with the Nova Scotia Power Corporation Privatization Agreement passed in 1992, the Nova Scotia Power Finance Corporation provided for defeasance of its debt. The portfolio of defeasance assets consists of Nova Scotia Power Corporation, other provincial government and utilities, Federal Government and Federal U.S. Treasury bonds, coupons or residuals.

46

FOREIGN EXCHANGE

Canada maintains a floating exchange rate for the Canadian dollar, which permits the rate to be determined by fundamental market forces without intervention except as required to maintain orderly market conditions.

Closing spot exchange rates for the U.S. dollar in Canada, expressed in Canadian dollars per U.S. dollar, are shown in the table below for 2014 through 2018.

Daily Rates	2014		2015		2016		2017		2018
High		1.1656		1.3965		1.4559		1.3743		1.3642
Low		1.0639		1.1749		1.2536		1.2128		1.2288
Close		1.1601		1.3840		1.3427		1.2545		1.3642
Average		1.1045		1.2787		1.3245		1.2986		1.2957
Source: Bank of Canada

On March 31, 2019, the rate for the U.S. dollar in Canada, as reported by the Bank of Canada, was $1.3363.

Unless otherwise specified or the context otherwise requires, the following table sets forth the conversion rates used in this Annual Report for foreign currency borrowings.

			U.S.		Pound
Noon Rate	at March 31		Dollar		Sterling
		2014		1.1053		1.8430
		2015		1.2683		1.8834
		2016		1.2971		1.8652
		2017		1.3310		1.6650
		2018		1.2894		1.8106
		2019		1.3363		1.7418

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OFFICIAL STATEMENTS

The Minister of Finance and Treasury Board or his authorized representatives acting in their official capacities have supplied the information set forth in this Exhibit to Form 18-K.

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TABLE 1 - STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2019

Public Debt Management Fund	$	910,389,839
Canada Pension Plan Fund (A)

Series		Date Of Issue		Maturity Date		Amount Outstanding (in thousands)			Coupon Rate		Canadian Dollars		Sinking Fund (B)
C37			03-Mar-00		03-Mar-20		73,922,000	CAD		6.610		73,922,000		—
C38			02-Mar-01		02-Mar-21		78,277,000	CAD		6.400		78,277,000		—
C39			01-Mar-02		01-Mar-22		96,251,000	CAD		6.400		96,251,000		—
C40	(C)		01-Mar-04		01-Mar-24		90,597,000	CAD		5.390		90,597,000		—
C41			02-Jan-05		02-Jan-25		85,762,000	CAD		5.270		85,762,000		—
C42			03-Mar-06		03-Mar-36		91,752,000	CAD		4.700		91,752,000		—
C43			02-Mar-07		03-Mar-37		109,641,000	CAD		4.570		109,641,000		—
C44			03-Mar-08		03-Mar-38		81,516,000	CAD		4.850		81,516,000		—
C45			01-Dec-08		01-Dec-38		78,450,000	CAD		5.370		78,450,000		—
C46			01-Mar-10		01-Mar-40		85,218,000	CAD		4.820		85,218,000		—
C47			01-Aug-10		01-Aug-40		46,648,000	CAD		4.720		46,648,000		—
C48			04-July-11		04-July-41		78,408,000	CAD		4.290		78,408,000		—
C49			03-July-12		03-July-42		55,808,000	CAD		3.440		55,808,000		—
						$	1,052,250,000				$	1,052,250,000	$	—

TABLE 1 – STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2019

Medium-Term Promissory Notes

Series		Date of Original Issue		Maturity Date		Amount Outstanding			Coupon Rate		Canadian Dollars		Sinking Fund (B)
P103	(C)		24-Oct-06		24-Oct-21		200,000,000	CAD		4.450		200,000,000		—
P112			20-Jan-12		02-Jun-62		1,488,800,000	CAD		3.500		1,488,800,000		—
P118			06-Feb-15		01-Jun-22		200,000,000	CAD		1.600		200,000,000		—
P119			15-Jun-15		15-Jun-20		980,000,000	CAD		CDOR FRN		980,000,000		—
P120			19-Feb-17		19-Feb-20		100,000,000	CAD		CORRA-FRN		100,000,000		—
P121			9-Nov-17		9-Nov-22		515,000,000	CAD		CDOR FRN		515,000,000		—
P122			9-Nov-17		9-Nov-24		467,500,000	CAD		CDOR FRN		467,500,000		—
P123			15-Feb-19		15-Feb-24		240,000,000	CAD		CDOR FRN		240,000,000		—
P124			19-Feb-19		19-Aug-22		100,000,000	CAD		CORRA-FRN		100,000,000		—
						$	4,496,300,000				$	4,496,300,000	$	—

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TABLE 1 - STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2019

Payable in Canadian Dollars

Series	Date of Original Issue		Maturity Date		Amount Outstanding			Rate		Canadian Dollars		Sinking Fund in Canadian Dollars (B)
9K		30-Jan-92		30-Jan-22	$	200,000,000	CAD		9.600	$	200,000,000	$	168,304,312
9Z		03-Oct-97		01-Jun-27		550,000,000	CAD		6.600		550,000,000
B2		12-Jun-01		01-Dec-31		300,000,000	CAD		6.600		300,000,000
B5		12-Sep-03		01-Jun-33		600,000,000	CAD		5.800		600,000,000
B7		03-Jun-05		01-Jun-35		350,000,000	CAD		4.900		350,000,000
B8		25-Jan-06		01-Jun-37		750,000,000	CAD		4.500		750,000,000
D2		25-Nov-09		25-Nov-19		900,000,000	CAD		4.150		900,000,000
D3		14-Dec-09		01-Jun-41		950,000,000	CAD		4.700		950,000,000
D5		08-Mar-11		01-Jun-21		900,000,000	CAD		4.100		900,000,000
D6		01-Jun-11		01-Jun-42		1,050,000,000	CAD		4.400		1,050,000,000
D7		27-Oct-14		01-Jun-45		325,000,000	CAD		3.450		325,000,000
D8		06-Feb-15		01-Jun-25		300,000,000	CAD		2.150		300,000,000
D9		06-Oct-16		01-June-27		650,000,000	CAD		2.100		650,000,000
E1		22-Jan-19		01-Dec-51		600,000,000	CAD		3.150		600,000,000
Total Payable in Canadian dollars					$	8,425,000,000				$	8,425,000,000	$	168,304,312

TABLE 1 - STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2019

Payable in Pound Sterling

Series		Date Of Issue		Maturity Date		Amount Outstanding				Rate		Equivalent in Canadian Dollars			Sinking Fund in Canadian Dollars (B)
8P	(D)		18-Apr-84		18-Apr-19		60,000,000		GBP		11.75	$	114,386,580			—
						£	60,000,00060,000,000					$	114,386,580		$	—
Adjustments relating to swap agreements							(£60,000,000	)				($	114,386,580	)
Total Payable in Pound Sterling after swap:							—						—			—

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TABLE 1 - STATEMENT OF DEBENTURES OUTSTANDING AS AT MARCH 31, 2019

Payable in United States Dollars

Series		Date Of Issue	Maturity Date	Amount Outstanding				Rate		Equivalent in Canadian Dollars			Sinking Fund in Canadian Dollars (B)
9C	(D)	01-Jul-89	01-Jul-19		200,000,000		USD		8.875		199,900,000		$	196,198,135
9D	(D)	15-Nov-89	15-Nov-19		244,000,000		USD		8.250		246,318,000			246,318,000
9E	(D)	01-Mar-90	01-Mar-20		300,000,000		USD		9.250		409,200,000			387,896,048
9J	(D)	01-May-91	01-May-21		300,000,000		USD		9.125		312,002,107			273,586,726
9L	(D)	01-Apr-92	01-Apr-22		300,000,000		USD		8.750		379,516,788			313,881,628
9M	(D)	30-Jul-92	30-Jul-22		300,000,000		USD		8.250		329,309,999			271,375,020
				$	1,644,000,000					$	1,876,246,894		$	1,689,255,557
Adjustments relating to swap agreements				($	1,644,000,000	)				($	1,876,246,894	)
Total Payable in USD after swaps:					—						—			—
LONG TERM TOTAL										$	15,964,183,474		$	2,767,949,708

(A) Debentures held by the Canada Pension Plan Fund are payable up to 30 years after their respective dated of issue, are not negotiable, not transferable or assignable, but are redeemable in whole or in part before maturity at the option of the Minister of Finance of Canada, on six months’ prior notice when he deems it necessary in order to meet the requirements of the Canada Pension Plan.

(B) For designated sinking funds, payments normally commence on the first anniversary date of the issue of the debenture and are designed to retire the debt over the term of the issue. Sinking Fund investments consist primarily of debentures of the Province of Nova Scotia, other provincial governments and the Government of Canada.

(C) The Province has executed swap contracts to convert certain interest payments from a fixed to floating for the fiscal year ended March 31, 2019.

(D) The Province has executed currency swap contracts to convert foreign denominated debt into Canadian denominated debt.

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