MPP urges support for municipalities ‘bleeding cash’
Niagara losing millions in tax due to shutdowns to prevent spread of virus
Niagara Centre MPP Jeff Burch is appealing for additional supports for cash-strapped municipalities as they respond to the COVID-19 pandemic.
Burch, the New Democratic Party’s municipal affairs critic, was one of a handful of provincial politicians who participated in the Ontario government’s debate on the COVID -19 Support and Protection Act, passed Tuesday.
“We’ve been hearing that municipalities are bleeding cash,” he said in Queen’s Park.
The legislation includes initiatives to assist municipalities, such as providing a six-month window to collect development charges and extending time limits for planning issues. Burch, however, said municipalities also need help covering lost revenue while facing added expenses incurred while working to protect residents and minimize the spread of the coronavirus. “Revenues are down for things like transportation and fees, expenses are up as municipalities deal with this crisis,” he said. “They’re worried about going into the red.”
Niagara Falls Mayor Jim Diodati said his city has been hard hit.
“Our sources of revenue have been hugely, negatively affected,” he said.
The city has seen an 80 per cent drop in transit fares, all parking revenues are gone, and revenue from facility rentals has stopped.
“Everything has been completely cancelled — and that’s huge. It’s another negative impact.”
Because municipal governments are legally not permitted to run deficit budgets, Burch said they will need more assistance in the long term than they are currently receiving from the province.
Burch said municipalities, for instance, have deferred property tax payments and interest charges of 15 per cent on past due amounts, to help residents who are themselves facing financial difficulties as a result of the pandemic.
Diodati said interest charged on unpaid taxes or unpaid fines alone adds up to about $2 million a year in income for Niagara Falls.
“It’s things that people don’t even think of,” he said.
“So we’re also going to the province saying, ‘Either you guys have to change the law or you have to pay these bills.’”
Niagara Falls is also facing the loss of some of about $20 million to $25 million it receives each year as its share for hosting two casinos, which have been closed because of the pandemic.
“It’s a percentage of revenue,” Diodati said. “And they have zero revenue, so our percentage of zero will be zero.”
Meanwhile, costs have not stopped.
“In one day, we had five water main breaks and you have to fix them,” he said.
Park maintenance, cemetery services and other essential programs must continue, regardless of revenue shortfalls.
“We’re still moving forward, but the revenues have been severely hampered and we don’t qualify for things like the 75 per cent wage subsidy that businesses get,” Diodati said, referring to the federal government program.
Burch called on the province to allow municipalities to defer remitting the portion of property taxes they collect on behalf of the province.
“That would provide some breathing room for municipalities,” he said. “We hope that the government considers that in the future.”
Burch also asked for 100 per cent provincial funding for public health units, that currently receive 30 per cent of their revenue from municipalities.
“What better than now in this crisis for the province to show that they are partners with municipalities and to support municipalities by footing the costs of public health units and people on the front line.”
He said municipalities, like businesses, “don’t want to find themselves behind the eightball when it’s time for us to think about recovery.”