Although Nova Scotia was never a major slave colony, it was neither unknown nor unusual. Wealthy families in particular often had a few bound servants, and there are records of slaves being sold and inherited in Halifax. However, the land was unsuitable for most agriculture and African slaves had trouble tolerating the cold climate. The plantation economy was a nonstarter in Nova Scotia, and thus slavery was an accepted custom with no specific legal standing.
This changed with the mass influx of Loyalists. Many of the refugees were wealthy slave owners who had taken their slaves with them when they came to Nova Scotia. The word slave was rarely used however, the preferred phrase being servant or Negro servant. Of course, the reality of perpetual servitude was the same no matter what term was used. Brutal punishment was uncommon enough to be condemned by the community when it happened, but there were no legal consequences.
In one such case the slave of a Loyalist in Truro had a habit of running away frequently. After several escapes and recaptures the master cut a hole in the slave's ear, passed a rope through it, and dragged him on the ground behind his horse for several miles. Not much later, he died. While the people of the town thought the treatment was cruel and vicious, there were no charges brought against him.
Indenture was a more common threat. A form of temporary slavery, an indentured servant would sign a contract that took away their liberty for a year or more, in return for a lump sum payment on the completion of the contract. Indentured servants could be punished as slaves and sometimes were subject to the most humiliating mistreatment. Convicts who could not pay their fines were usually indentured in order to pay them. At other times indenture was part of the sentence for a crime.
Given the poverty of the Black Loyalists and the prejudice of the legal system, many became bonded servants either through choice or as a punishment for vagrancy. In 1784, when a list of indentured servants was drawn up in order to investigate corruption in the distribution of supplies, there were about 125 servants; around 10% of the blacks in Shelburne at the time. This occurred at a point when all Loyalists of any colour were supposed to be drawing supplies from the British crown. The list was written to investigate abuses of the rationing system, as it was common practice to indenture blacks and then keep their supplies. In effect you were paid with food and tools for the privilege of receiving free labour.
Other abuses were common as well. Many would find some excuse to release the servants just before the end of their term and so avoid the promised payment for their services. Others sought to trick illiterate blacks by promising a one year term but writing up a much longer contract. One woman was fooled into signing a 39 year contract. Others would arrange some way of getting their servants out of the province (exporting slaves was forbidden) and then selling them off to permanent slavery in the West Indies. Some people would forge ownership papers so as to hold their servant indefinitely. Since the word of a black wasn't given much weight in the courts, the master had little fear of repercussions. (source: Black Loyalist.com)