Most of the mayors of Metro Vancouver’s municipal governments have signed an open letter to the provincial government requesting COVID-19 financial relief and other measures supporting residents and businesses.
Of the 21 municipalities that exist in the region, only the City of Surrey, represented by Mayor Doug McCallum, is missing its signatory.
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“We know things will be ever evolving and our way of business and life in our communities has changed and will continue. We are committed to working with senior levels of government with other top priorities that are emerging due to COVID-19, one being the economic impact that will be very real for many people, including local government,” reads the letter.
“This discussion included the impact this pandemic is having and will continue to have on our residents and businesses. To successfully navigate the impacts for local government, residents and businesses, provincial and federal support targeted specifically for municipal issues is required.”
To address their immediate operational budget issues, the mayors are seeking direct, unconditional grants to cover revenue losses from the closure of community and recreational centres, public libraries, and programs, and the suspension of other revenue-generating measures such as parking enforcement.
Provincial law regulating municipal governments stipulates that these local authorities cannot run a deficit or borrow to balance their operating budgets. Most of the operating budgets of municipal governments are funded by property taxes and utility fees.
On the extreme end of the financial difficulties, the City of Vancouver has indicated it is anticipating losses of up to $189 million in revenue and fees. Additionally, if 25% of homeowners were to default on their property taxes, the city could lose an additional $325 million in revenue. However, the city has not made any suggestions of where it could significantly reduce spending.
“Direct financial support to cities in the form of unconditional grants will help ensure cities can continue to offer the essential services residents and businesses need for their health, safety and well-being during this trying time,” reads the letter.
With growing pressure to provide residents and businesses with temporary relief from property taxes during the pandemic, the mayors are calling on the provincial government to expand the existing Provincial Property Tax Deferment Program (PPTDP) to include all property owners, including residential, business, and non-profits.
The PPTDP is currently eligible for elderly, disabled, or widowed homeowners, as well as those financially supporting a child under 18. The provincial government pays municipal governments the current year’s residential property taxes for the principle residence, with the taxes paid adding to debt against the property title.
There is also an emphasis that such a policy expanded to businesses would need to ensure landlords pass on their benefits to tenants, effectively providing relief to triple-net leases.
“Expanding the existing PPTDP to cover all residents, businesses and non–profits would provide some piece of mind and could save many businesses from closing permanently. This action is needed without delay. Some of these businesses and non-profits provide important services that must remain available during this crisis,” continues the letter.
“This makes sound economic sense because these fully secured loans pose minimal risk to the Province, and can be extended over a period of time to ease the liquidity crunch, help stimulate consumption, will rebuild local economies, provide a social safety net, and avoid municipal property tax system disruptions.”
There should also be a standardization and extension of the due dates for other tax authority levies, including TransLink, Metro Vancouver Regional District, and other regional bodies. Municipal governments collecting taxes for the public transit authority and the regional district would still be responsible for the payment of millions of dollars in levies to these authorities if they were to defer the collection of municipal property taxes.
Furthermore, the mayors want the provincial government to increase its rental supplement support to assist those who cannot pay rent, and ensure landlords with mortgages are able to maintain their homes.
The provincial government has yet to formally respond to these requests from the mayors.