About 81,000 public servants could receive up to $5,000 each over an unconstitutional wage law
Nova Scotia has agreed to pay up to an estimated $470 million in damages to about 81,000 public sector employees whose wages were restrained under Bill 148, a 2015 law found unconstitutional in February 2026, the Canadian Press (CP) reported.
Former premier Stephen McNeil’s Liberal government introduced the Public Services Sustainability (2015) Act on Dec. 14, 2015, and it received royal assent four days later, Nova Scotia Legislature records show. It was tabled the same day the province projected a $241-million deficit, Halifax firm Stewart McKelvey noted.
The act set a four-year wage pattern of 0 per cent, 0 per cent, 1 per cent and 1.5 per cent, plus 0.5 per cent on the agreement’s last day, the province said. “The legislation is consistent with government’s fiscal plan, fair to employees, and affordable for taxpayers,” said then-finance minister Randy Delorey.
It was not proclaimed until Aug. 22, 2017, when it imposed the package on about 75,000 public sector employees, the National Observer reported. It also froze, retroactive to April 1, 2015, the public service award, a retirement lump sum for long-serving workers.
In a decision released Feb. 27, 2026, Justice Ann Smith of the Supreme Court of Nova Scotia found Bill 148 substantially interfered with good-faith collective bargaining rights under the Canadian Charter of Rights and Freedoms (Charter), as detailed in Human Resources Director (HRD) Canada’s coverage of the court ruling striking down Bill 148.
How Bill 148 payouts work
Payouts depend on years worked under restraint: $1,250 for each freeze year, $750 for year three and $500 for year four, Kevin Kindred, senior counsel with the Nova Scotia Department of Justice in Halifax, said Oct. 19, 2026. About 55,000 would also receive $1,250 linked to service awards, CBC News reported.
The Nova Scotia Government and General Employees Union (NSGEU) said awards top out at $5,000, based on seniority lists. As of Oct. 20, neither side had said publicly whether payments are taxable or who will issue them.
Justice Smith said Oct. 19 she would not sign the order until a payment deadline is set, CP reported. No date has been agreed.
How unions and province are responding
Labour leaders welcomed the deal. “It’s a win for workers,” Melissa Marsman, president of the Nova Scotia Federation of Labour, said, according to CBC News.
Marsman noted Premier Tim Houston promised in 2021 to repeal the law but did not, CBC reported. NSGEU president Sandra Mullen called the payouts a “huge win for labour.”
The province sounded relieved. “Even though this is a big fiscal lift … we’re happy to have this behind us,” Finance Minister John Lohr said, CP reported. The cost is booked in the 2025-26 fiscal year, when the ruling was issued.
The Ontario Court of Appeal declared Bill 124 unconstitutional in February 2024 and found the government had not explained why restraint could not be achieved through bargaining, CP reported.
Ontario’s Financial Accountability Office (FAO) had projected savings of $9.7 billion but later estimated remedies at about $13.7 billion for 2022 to 2028, CTV News reported. By March 2024, reopener clauses had driven Bill 124 remedial payments that cost Ontario $6 billion.
