Affordability

Halifax’s household income per capita continued to grow steadily between 2% to 4% per year. It grew 2.6% in 2023, 3.7% in 2022, and 2.9% in 2021. Additionally, inflation has begun to wane with prices in Halifax increasing by 4.3% in 2023. This is down from 7.3% in 2022 – and a welcome relief for consumers.

As prices rise, consumers find that even increasing incomes do not buy them as much as they used to. Despite nominal increases in income, Halifax experienced its third consecutive year of purchasing power decline. Purchasing power decreased by 1.7% in 2023, 3.6% in 2022, and 1.0% in 2021. Halifax was not alone; all 10 benchmark cities experienced declining purchasing power in 2023.

Across Nova Scotia, the inflation rate was 4.0%, slightly slower than Halifax. Most of the inflation rate was driven by increases in the cost of food (up 7.9%), health and personal care (up 6.9%), and shelter (up 5.4%). Prices for all the broader goods categories increased in 2023 though for most goods it was at a slower pace than experienced in 2022.

Nova Scotia’s mean effective tax rate¹for individuals was 13.0% in 2021, the fourth highest across provinces. This marked the first time since 2013 that the effective tax rate noticeably changed and was likely reflective of broad, post-pandemic support payments winding down. While tax rates have an impact on affordability for an individual, they are only one component of the Province’s financial picture.

The metrics for poverty and income distribution come with longer lags than many other data sets. Poverty rate statistics are available only for 2022, while detailed income data are available only up to 2021. Thus, the effects of the pandemic and governments’ responses to it are still quite evident in the data.

The poverty rate as calculated with the Market Basket Measure (MBM)²rose in all benchmark cities from 2021 to 2022. At 5.4 percentage points, Halifax recorded the largest increase in its poverty rate across the 10 cities. Halifax also had the highest 2022 poverty rate at 13.6%.

The MBM threshold for Halifax increased by approximately $2,500 (4.8%) from 2022 to 2023 to just under $55,000. The rate of annual change was down from the 8.7% increase between 2021 and 2022.

For young (0 - 17 years) and working age (18 - 64 years) individuals in Halifax, the shares living in low-income families dropped steeply in 2020 as pandemic income supports rolled out, but then rebounded somewhat in 2021 as those supports were rolled back. In both cases, though, the shares living in low-income families remain below pre-pandemic levels. In contrast, the share of Halifax seniors (65+ years) living in low-income families rose to a new high in 2021.

The impact of pandemic income supports similarly led to a jump in the share of total income earned by those in the bottom half of the income distribution in 2020 followed by a decline in 2021.

The average income of those in the top 5% of income earners spiked by 20% from 2020 to 2021, while the average income of those in the bottom 50% decreased by $100.

NOTE: For several years the Halifax Index has reported child care cost data published by the Canadian Centre for Policy Alternatives (CCPA) each spring. In 2023, due to major shifts stemming from recent federal-provincial agreements, the CCPA’s publishing schedule was delayed. Following its June release, the 2023 Halifax Index was updated with CCPA cost data later in the summer. New CCPA child care cost data will not be available until the second half of 2024. Thus, for the 2024 Halifax Index, last year’s material based on CCPA cost data is being repeated. The 2025 Halifax Index will incorporate the next set of child care cost data published by the CCPA. New information on child care in Halifax is provided below based on data from Statistics Canada and Halifax Partnership’s City Matters Survey carried out by MQO Research.

The availability of affordable, high-quality child care enhances the ability of parents, especially women, to participate in the labour force and/or pursue opportunities for education and training. This is particularly beneficial to the economy now when labour markets are tight and productivity improvements are required to maintain our standard of living. High-quality child care also gives children a sound base for learning when entering the school system and contributes to a better-skilled labour force in the long term.

Statistics Canada reports provincial-level survey results for families encountering difficulties with child care. In 2023, the most commonly cited difficulty among families using child care was again the availability of care in their community (72.5%). Issues related to scheduling and affordability were also mentioned by significant shares of respondents, 30.7% and 31.7%, respectively. Several areas of concern, including scheduling, quality, and caregiver qualifications, were noted by smaller numbers of respondents in 2023 than in 2022.

The Halifax-level data on child care come from the annual City Matters Survey. The share of respondents who strongly agreed when asked if they were using sub-optimal child care arrangements because they had no other option rose to 43.0% in 2024. More than one-quarter disagreed when asked if they could access the child care they needed at a cost that was reasonable. Opinions on affordability have improved substantially since 2018, likely in response to significant increases in government funding for child care. Nonetheless, concerns among parents remain far from being fully addressed.

While there are concerns about rising debt levels and affordability, non-mortgage debt and delinquency remained at manageable levels in 2023. Concern is warranted, however, as it is unclear whether increases in delinquency and insolvency signal a return to pre-pandemic norms or whether they are increasing for less benign reasons. Most 2023 figures remained below their 2019 and prior levels.

In 2023, Halifax’s average non-mortgage debt per consumer was $20,818, a decrease of $118 (-0.6%) from 2022 and a record low. This decrease came as Halifax households spent less on credit cards and lines of credit. Delinquency rates increased to 1.24% in 2023 up from 1.00% in 2022. Both figures remained below the pre-pandemic rate of 1.56% in 2019. While both debt and delinquency have increased over the course of 2023, current figures were well below longer-term norms.

Consumer insolvencies³totalled 1,592 in 2023. This was a notable increase of 23% over 2022, though again, figures were still below typical pre-pandemic levels. Consumer bankruptcies⁴were unchanged from the prior year staying at 452 (+0%) in 2023. Meanwhile, consumer proposals⁵increased to 1,140 (+35%) in 2023.

The average consumer in Halifax had a record-low non-mortgage debt level in 2023; however, it is unclear whether consumers were better off. Delinquency rates and insolvencies rose closer to their pre-pandemic levels and non-mortgage debts are only one part of the larger debt picture.