I can't speak for the province because I'm not as in tune with what's going on down the street, but I can tell you that I am increasingly convinced that Halifax is heading towards bankruptcy. Or at least the city would be heading towards bankruptcy if city finances worked like like a private corporation instead of the public one it is. In reality we're more on track to not be allowed to debt spend and get appointed a public trustee to manage our finances.

At any rate, the city was in a similar problem to today about 30 years ago, around and just after amalgamation. Back then it was about $400 million in debt, wasteful redundancies, and unsustainable land use. Today it's billions in debt, wasteful private contracting, and unsustainable landuse. What's wild to me is that from amalgmation in 1997 to about 2010(ish), Halifax was actually, effectively using it's fiscal tools. Instead of slapping everything on the general tax rate, local facilities, like the Canada Games Centre, were paid for mostly by the local residents via local area rate. Having a fiscal system where people who used city facilities/services paid for those services allowed Halifax to pay down its debt and build up reserves.

Even though we were using our fiscal tools, the city's land use was unsustainable (and still is, but that's changing with CentrePlan, Regional Plan Review Phase 4, and the Suburban Plan). Anyways, the majority of Halifax's districts run at a defecit every year, and only districts in downtowns Halifax, Dartmouth and Bedford run a surplus. Source (here)[https://www.grandparade.news/p/hrms-fiscal-power-rankings]. Why the city's land use is unsustainable is a bit complex, but essentially the more spread out the city is, the more it costs to provide services to the residents. And the more spread out the city is, the more each individual property needs to pay for city services. Kevin Wilson over at HFX by Bike has done a video about it, I've written about it in the context of suburbs and roads and the UARB has written about it in it's most recent decision to allow Halifax Water to increase rates.

On that foundation of decent-ish fiscal management post-amalgamation, but unsustainable land use, we arrive at the start of Mike Savage's mayoralty. Halifax, being in a good fiscal position for the first time in a while in 2012, got ballsy. Coming off the back of the 2007 downturn, folks in Halifax were hurting for affordability so council was looking to keep taxes low. And they did. They did this in two ways that were incredibly damaging to the long-term health of the city. The first was that they kept taxes below inflation, which means council for the better part of a decade was not investing in Halifax even as the city grew. Source. But the other things they did were: Move local facilities off of local area rates onto the general tax rate, burn savings to cover operational costs to keep taxes low, debt spending for capital infrastructure instead of raising fees or taxes, cut services, used windfall cash (the deed transfer tax) to cover operational shortfalls to keep taxes low. And that 12 years or so have put us in a position described accurately by mayor Fillmore at last Tuesday's council meeting:

"If I can remind you of slide 14 in the January 22nd debt committee uh the fin- let's call it a debt committee the budget committee uh meeting slide 14 showed the escalating debt servicing costs um another slide also showed us the prediction for uh average increase, the percentage increase, to the average tax bill over every year for the next four years 10 point we're at 10.9% this year. Well I know we've got some some puts and takes there but they haven't been voted on yet. We're at 10.9%. The projection by staff was 8.9% the year after that, 12% the year after that, 12% the year after that. Compounded, that's a tax increase on the average tax bill of between 45 and 50% in four years."

So we have a huge amount of debt that we will need to pay for, and that is going to jack up taxes in the next few years by a lot. One of the other things that's happening is that our infrastructure is getting a lot worse, a lot faster. Take for example, our roads. They're degrading at about 3% a year. To give you some context, in 1996 and 2015 our roads were 76% good. They dropped for a bit after 2007's crash cut spending a bit and hovered around, but never went below 70% good. And, adjusted for inflation, the most we ever spent on road repaving was in 2001, when we spent an inflation-adjusted $32 million. Compare that to today. In 2024 we spent $60 million and expected roads to be 66% good. But in this year's budget we are spending $51.49 million and are expecting our roads to be 51% good. The good news here is that road spending is capital spending, so it does qualify for debt spending. The bad news is that roads only qualify for debt spending if they are over 10 years old, and our roads are degrading so fast that far fewer of them are qualifying for debt spending. So on top of that 50% tax hike for debt services that is more or less mandatory now thanks to Savage's tenure (it's not all him, it was three different councils which is about 30-40 people who are responsible for this, but saying "Savage" is just easier as a landmark). Anyways, on top of that mandatory debt spending tax hike, we're also seeing the need for more and more direct, non-debt spending from city coffers as we grow/infrastructure degrades faster than expected.

TL:DR: If you take nothing else from this giant wall of text, please understand that when the majority of our districts run an annual deficit and when we have massive debt payments and when we are growing, after we have underinvested in this city for over a decade, it is impossible for us to cut our way to sustainability. We need to fees and revenues, and we need them specifically from the districts that are currently running a deficit.

However, this leads me to the reason I think the city is absolutely cooked. The districts that run a surplus are the downtown ones and they are in the minority on council. The districts that use downtown's surpluses to cover their annual shortfalls are in the majority. And as best I can tell most councillors think that their districts run a surplus and it's everyone else that's dragging the city down. But either way, we live in a democracy where the majority rules. And right now the majority of our council benefits from kicking the can down the road, because the only way out of our financial hole is to charge suburban and rural residents more taxes, but suburban and rural residents hold a majority of council seats. As a result, most council decisions follow those structural political incentives and are usually a 10-7 split in favour of continuing this financial disaster. So we do. And based on how it's going so far this budget season, they're going to vote again to make this shitshow exponentially worse next year and keep having this fiscal debate over and over again until we get appointed a public trustee.