Saturday, April 18, 2020

Delaying City of Quesnel property tax collection

Courtesy of the City of Quesnel:

Editor's Note -- Bob Simpson is the Mayor of Quesnel.  He can be reached via email here

True to their word, the Provincial Government announced this week some temporary changes to when Municipal governments must levy late tax penalties, how long they can carry short term debt, how they can move money around internally, and when they must pay the Provincial Government the school tax they collect for it. This flexibility will enable many City Councils to address potential cash shortfalls if they delay collecting property taxes until the fall. Read the full news release at https://news.gov.bc.ca/22026.

These changes will enable Quesnel City Council to consider a new property tax deadline for 2020 at next week’s regular Council meeting (which will again be held electronically), giving some temporary relief to ratepayers by removing a looming deadline that is worrisome to many businesses and households.

As a result of strong fiscal management by Council and City staff, Quesnel is in a good position to take advantage of the flexibility the Province has now provided us with. The City’s long-term asset management strategy, five-year capital plan, and four-year budget framework put us in a good financial position that will enable us to cover operating costs with capital and cash reserves rather than short term debt if Council delays property tax collection to the fall.

But, the announcement the Province made yesterday does not address the revenue shortfalls municipalities are experiencing directly as a result of this pandemic; nor does it begin to address the longer term implications for local governments if they permanently lose industrial or commercial taxation as a result of the deepening negative economic impacts of the pandemic.

Quesnel has already experienced significant losses in industrial taxation over the past five years. This year’s City budget had to be built around the loss of almost $400,000 in annual property tax revenue as a result of last year’s closure of the Tolko mill.

Local governments are also under pressure to improve services, take on more responsibilities, and cover significant inflationary costs, especially for capital projects. These upward pressures on City budgets can only be covered by tax increases, as most communities, Quesnel included, already operate within tight budgets with virtually no room for deep budget cuts without significant impacts to public services and the timely maintenance of infrastructure.

The additional loss of revenue to local governments as a direct result of the COVID-19 pandemic simply makes it even more difficult to reasonably offer tax relief to property owners this year without seriously impacting our ability to ensure our community remains resilient. However, Quesnel Council is conducting a comprehensive review of our strategic plan and budget and is actively looking for ways to provide some financial relief for ratepayers in 2020 without creating deficits that will simply have to be made up with larger tax increases in 2021 and beyond.

The Provincial Government stated that the announcement they made this week is just the first step in assisting local governments to weather the financial impacts of the COVID-19 epidemic. They also offered direct tax relief to all commercial property tax classes with further reductions to the provincial school tax, giving local governments some breathing room to address their own needs within the overall property tax framework.

Quesnel Council will continue to work with the Province to ensure we continue to have access to the financial resources we need to drive our transition strategy and enhance our ability to attract and retain visitors, residents, and investment once this current crisis is over.

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