WINNIPEG — City administrators have outlined a plan to defer business and property taxes for those who need a break during the COVID-19 pandemic.
A report to be voted on at a special council meeting Friday recommends a three-month deferral for those who choose to do so.
“While some taxpayers will utilize the option to defer payments on business and property taxes (to August and September respectively), it is assumed that the majority of taxpayers will continue to make their business and property tax payments on time,” says the report.
To make this happen council needs to agree to waive late penalties and other fees at a cost of $5.2 million.
The report also spells out the possible impact to the city’s budget from to the pandemic.
“The projections estimate a budget total shortfall of $32.7 million if the event ends by April 30, 2020,” it says. “This increases to $73.2 million if the event ends by July 31, 2020.”
The report says the city’s $108 million rainy day fund can be drawn down to make up the shortfall, but if the fund and the city’s liquidity position reach a certain point, the city may explore other measures including layoffs.
The report lists the following options:
- Reduce service delivery and effect staff layoffs;
- Survey for federal and provincial financial assistance programs providing financial resource to the city directly
- Discussion with the Province of Manitoba on deferring payment of school taxes;
- Draw on the $75 million line of credit;
- Review and transfer other reserve amounts;
- Reduce cash to capital spending to zero in 2020, replacing it with debt;
- Pre-borrowing for 2020 capital spending. Note: the base scenario presumes the city will borrow long-term in the fall in respect of capital spending;
- Extend accounts payable payment terms where applicable from 30 to 45 days; and
- Reduce capital spending from 10 per cent to 20 per cent.
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