New measures to offer relief for local governments struggling to balance their books amid the worst economic crisis in generations likely won’t help much in the long run, according to Burnaby Mayor Mike Hurley.
On Thursday, April 16, the province announced the new measures, intended to help local governments and businesses. The primary relief for businesses, which could offer some help to local governments, is a reduction of most school taxes attached to commercial properties by about 25%. Businesses will also be able to kick payments of that tax down the road to October 1 without facing penalties.
The province will also be allowing local governments to access their existing capital reserves to borrow interest-free for operating expenses.
But Hurley says, while those measures will help to some degree, he also sees it as simply delaying the issue, especially with the tax deferrals and borrowing from reserves.
“That’s really what it does; it kicks the ball down the road a bit. Hopefully it’ll help the small businesses out, and I hope it does,” he said.
On allowing cities to borrow from capital reserves, Hurley said his finance department is still seeking answers from the province on how that would work and what exactly can be done.
“(It would help) in the short term, but all that has to be paid back,” he said. “It’s kind of a Band-Aid solution.”
As for the reduction of the school taxes attached to commercial properties, Hurley said decreased tax pressure on that front could mean more businesses are able to pay their property taxes that go to the city. But he wasn't hopeful the measure would be a significant one for the city.
Hurley said he’s not particularly surprised the province hasn’t offered something more substantial.
“I didn’t think they would really do anything to assist us,” Hurley said. “What we had asked them for was deferral (of property taxes), like seniors are able to do.”
In that case, Hurley said the province would backstop the deferred taxes to ensure cities kept their income while giving residents and businesses more time to pay their property taxes to the city. When municipalities ultimately collect those taxes, they would go back to the province.
“I think that would have worked best for most cities,” Hurley said. “All the cities (in Metro Vancouver) wrote a letter, have been writing to the province asking for that.”
That said, Hurley doesn’t have much optimism the province will be offering relief in that form.
“I don’t think the province is really willing to step out and really give the cities any backstops at this time,” he said. “I think, in the short term, we’re going to be fine. We’ll just have to use some of our reserves to pick up what we’re losing on a monthly basis.”
