On Thursday morning, the City of Vancouver announced “compensation impacts” for management and non-unionized employees.
Affected staff will take one mandatory, unpaid day off over each 10-day pay period, equivalent to a 10% salary reduction. There are 1,100 employees that are being affected by this measure.
Mayor Kennedy Stewart issued a statement shortly after, saying that he will be asking for a similar reduction to match these cuts.
“Like other cities, Vancouver has already started adjusting to the new reality by shuttering many services, laying off 10% of our workforce, and reducing the pay of management and other exempt staff by 10%,” he writes. “As we’re all in this together, I will ask Council to approve a 10% reduction in my own salary to match these cuts.”
According to the City of Vancouver website, in 2019, Stewart’s salary was $174,258, plus an additional annual supplement of $3,048.
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The mayor also commented on initiatives announced by the provincial government on Thursday morning, which included reducing commercial property tax bills and cost-saving measures for municipal levels of government.
The mayor went on to thank Minister of Finance Carole James and Minister of Municipal Affairs and Housing Selina Robinson for their work helping the municipality, but added, “I do not believe they will be enough for us to avoid more layoffs and cuts to services.”
The City of Vancouver uses money collected from the annual property tax to pay taxes owed to other authorities, such as the Provincial School Tax, TransLink, BC Assessment Authority, the Greater Vancouver Regional District, and the Municipal Finance Authority.
By delaying the provincial school tax remittance until the end of 2020, an almost $700 million payment is delayed until the end of the year.
Stewart stresses that drastic cuts will be needed in order to fill the rest of the gap, however.
“New measures allowing municipalities to borrow from capital reserves will not help us fill our $110 million budget gap in the long run, as these loans need to be paid back in full,” he explains. “This will happen either through savings due to cuts, or property tax rate hikes, as we simply do not have access to other revenue sources such as sales tax or income tax, nor the legal ability to run deficits over the long term.
By law, and unlike the provincial and federal levels, municipal governments cannot go into deficit or borrow money in order to balance its operating budget.