Staff and council could consider allowing Abbotsford residents and business owners to defer certain payments come tax time, but the city is facing its own cash-flow uncertainty, Mayor Henry Braun says.
While no decisions have been made yet, Braun said Monday that deferring payments is among several things city officials are considering given the COVID-19 crisis.
Any decision would be subject to council’s approval. But it’s clear that normally reliable Abbotsford taxpayers might not be be able to be as punctual in 2020.
“We are looking at our own cash-flow requirements, given, I’m pretty sure, that not everybody is going to pay their property taxes on July 2. Some people have told me that already,” he told The News.
“I have had landlords call me and tell me their tenants have informed them that they won’t be paying … I have had other people tell me they have the financial wherewithal to pay their property taxes and they wanted me to know that they will be paying their property taxes on July 2.
“We’re going to get a mixed bag there. I have no idea how it’s going to shake out.”
Two weeks ago, Braun suggested the city wouldn’t change how it collects taxes, noting that the city has its own financial obligations that require the money that comes from taxes.
But as the COVID-19 pandemic has worsened, the widespread economic effects on workers and businesses has become increasingly clear and hard to avoid.
“There may be things that we can do to maybe defer certain things,” Braun said. He spoke to The News hours before council was set to meet in a closed-doors meeting.
Asked if that would include the waiving of late-payment fees and other tax-collection rules, Braun said: “Staff are working through lots of things, and that would be on their plate as well … We’re looking at all of that and much, much more.”
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Any changes, though, would require the signoff of council.
After 2018’s municipal election, council met to lay out a new strategic plan. In Braun’s first term, such a plan functioned as a roadmap for how a mostly-unified, stick-to-the-process council pursued its priorities.
Since Braun’s re-election, he and the majority of council have continued to emphasize the need to act predictably and according to existing plans and policies. But COVID-19 has upended things and will force council to improvise in ways that Braun’s council has thus far resisted.
“We can’t continue to carry on our strategic plan the way we had envisioned,” Braun said. “There are some things that are more important than others, and we have to focus on that.”
One prominent local business owner had suggested to The News that the city use its increasing financial reserves to support Abbotsford’s struggling businesses. Those reserves currently amount to more than $100 million, although some of those reserves must be used only for certain types of projects. The rest has been largely slated for capital projects like a new water supply.
Braun said provincial laws that govern municipalities forbid cities from directly subsidizing third parties like businesses. And he said the city’s financial heft is tiny compared to those of the provincial and federal governments, which collect 90 per cent of the taxes paid in Canada.
“We’re not in a position to do that,” Braun said, noting that about half of the city’s budget goes to the fire and police departments. “Most of what we do, we have to continue to do.”
He said there is some additional financial flexibility that could come from the mandated closure of recreation facilities and the laying off of staff.
But at the same time, the city itself isn’t certain as to how much cash it will be able to collect. Taxpayers are usually reliable. But there’s no precedent for the current situation in which a large percentage of businesses are temporarily, but indefinitely, closed, throwing huge numbers of workers out of work.
“There are lots of people who are going to be struggling through this,” Braun said. “No one alive has been in the position we now find ourselves in globally.”
Braun said that decades in the private sector had given him some insight into leading an organization in uncertain economic times. He pointed to Y2K, wage and price controls, high inflation in the 1980s, the Great Recession, and other issues. But he added: “This is all those things together, times five.”
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