The financial condition index and Nova Scotia towns

Abstract

This paper explores the concept of using a financial condition index tool to measure the financial condition of a government unit. The Province of Nova Scotia’s Financial Condition Index (FCI) will be reviewed. In addition, FCI data reports for three recently dissolved towns located in Nova Scotia are reviewed and compared to identify concerns with using financial indicators to assess a town’s financial condition. The paper highlights why contextual knowledge is a necessary component of financial condition assessment.