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Your favorite place to stay in Nova Scotia?

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We're thinking of a trip to Nova Scotia in July, and I'm having a huge problem trying to make a decision of where to stay.

One part of me wants to stay in a cottage with ocean sounds.

The other part of me wants to stay in Lunenburg or a small town

At the moment I'm looking primarily on the southern coast, but Cape Breton is not out of the question.

Also, are there nasty biting bugs in NS in July? :o

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