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.
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