As an additional measure to reduce spending, the City of Vancouver has announced “compensation impacts” for management and non-unionized employees.
According to a statement from the City, affected staff will take one mandatory day off over each 10-day pay period. This is equivalent to a 10% reduction in salary for each staff member and alongside other unnamed measures, will allow for an operational budget reduction of $7.5 million.
The mandatory furlough began on April 10 and is expected to remain in effect until December 17, 2020. A spokesperson with the city tells Daily Hive that 1,100 employees are affected by this measure. Essential workers are not included.
City Manager Sadhu Johnston says that the cuts are “very difficult decisions” but explains that they’re “part of a range of measures [the city] is implementing so that they are able to restart operations and support communities as soon as possible.”
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Johnston also reinforced Mayor Kennedy Stewart’s message from Wednesday, which stresses that although the city faces major financial challenges, they “are not facing bankruptcy.”
On Thursday morning, the provincial government announced that it would be reducing most commercial property tax bills by an average of 25%.
Several measures were also announced to support municipal governments, including allowing them to borrow interest-free from their existing capital reserves, delaying school tax remittances until the end of the year, and allowing local governments to carry debt for an additional year.
One of Vancouver’s City Councillors, Sarah Kirby-Yung, tells Daily Hive that she’s “pleased” to see the new relief measures announced.
“For businesses, the focus is where it needs to be, on providing direct relief with the average 25% reduction in commercial property taxes and recognition of the critical importance of economic recovery,” she said.
Kirby-Yung notes, however, that while the initiatives announced will also help municipalities, property tax payments are still an underlying issue for both homeowners and the City of Vancouver.
“We know that residential homeowners will have difficulty paying their property taxes too,” she explains, “which is why the expansion of the Property Tax Deferment Program to more residents would be another helpful step for residents and municipal budgets.”
Approximately 75% of Vancouver’s operating budget stems from property tax and utility fees. Some of the money collected, however, is used for paying 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.
This week’s city council meeting included a discussion on whether the City would move its property tax due date from July to September. City staff now say that after this morning’s announcements, they’ll be re-evaluating whether to recommend moving the due date.
The final decision will be made during a council meeting on April 28, 2020.
City staff has prepared scenarios showing potential budget impacts ranging between $60 to $190 million through the end of 2021, depending on how long the pandemic lasts for. Staff will also be assessing the additional tax measures that were announced today to determine further options that can be taken.