Municipalities need more help and soon

Federal assistance for municipalities has been a long time coming — at least it feels that way in COVID time, where even a few weeks qualifies as “a long time.”

But the announcement Monday by Prime Minister Justin Trudeau that Ottawa will send gas tax revenue to cities and towns in a lump sum this month was good news.

“This is a start,” he said, promising more money to come later as the feds work with the provinces to help the smallest of our governments, which, of course, are also the ones that are the closest to our communities.

We will hold him to his word, because municipalities are starving for funding and in the near-term their prospects are sure to deteriorate, not improve.

Certainly these days everyone is knocking at Ottawa’s door seeking help. Its response has generally been good, with support going in a thousand different directions, everything from wage and rent assistance to money for charities.

The gas tax revenue is only a stopgap measure, though, because that money — normally shared in two annual payments — would have been coming to municipalities anyway. Plus, it is directed toward capital projects such as infrastructure repairs.

Municipalities need money now to pay salaries and maintain their properties, including arenas and community centres, and services such as cemetery care and grass cutting in parks.

Here in Niagara as elsewhere, though, the divide between the revenue they need and the money that’s actually coming in is growing wider and wider. Niagara Region projects a net deficit of $7.5 million due to COVID-19, regional Chair Jim Bradley said after Trudeau’s announcement. Other cities and towns across the region tell the same story. Welland, for example, is looking at a $384,000 shortfall and has laid off more than 100 municipal workers.

In a business survey conducted by Niagara Region for which results were released in mid-April, about two-thirds of Niagara businesses admitted to having laid off between three-quarters and all of their staff. Another 1,100 businesses had closed temporarily.

Since that time things have changed, federal wage assistance for employers might have led to some of those workers being called back and some businesses may have reopened. We’ll find out more later this week when Statistics Canada’s latest jobs report is released.

At the same time, though, Niagara businesses have lost a significant number of customers in a way most other parts of the country haven’t: The border has been closed, no Americans have come here to shop for two months now.

When businesses can’t pay their tax bills, it’s the local government that suffers most. Property tax makes up a huge portion of their annual operating revenue.

All of Niagara is affected, but maybe nowhere more than Niagara Falls, where some of its biggest properties — the hotels and major tourist attractions that give the city its identity — are closed or reduced to only a fraction of their usual business.

Other years, Niagara Falls could count on the approximately $25 million it receives annually from Ontario Lottery and Gaming for hosting the casinos to act as a financial cushion. The casinos are closed and the city’s money from OLG is based on gaming revenue. No gambling, no money for Niagara Falls.

It’s not sustainable for Ottawa to continue to hand out money at this rate, obviously. At some point there will be a reckoning. That’s a problem for another day. Right now, municipalities need more help and soon.