Mayor pleads for $200M lifeline
Stewart says ‘we are bleeding money’ from lost revenue during pandemic
Vancouver Mayor Kennedy Stewart is asking the province for a financial lifeline of up to $200 million to make up for fees, licences and fine payments the city is losing during the COVID-19 pandemic, the mayor said Wednesday.
The city is losing $4 million to $5 million a week, even with the savings from having parks, libraries and other civic facilities closed, and is absorbing additional costs from playing its part in the pandemic response, Stewart said.
“We are bleeding money right now and worried about property tax defaults by those who usually pay property tax,” Stewart said during a news conference on Wednesday where he talked about a range of dire possibilities, “so we have to be ready for this.”
Without provincial help, Stewart said the city will be faced with stark choices about cutting “front-line services,” which would mean layoffs in addition to the 1,500 temporary notices issued to employees of civic facilities such as libraries, recreation facilities and theatres closed due to public health orders.
Stewart unveiled a staff report that outlines dire possibilities for city finances on the same day that Port Coquitlam Mayor Brad West announced his council has rescinded the small tax increase it put into its 2020 budget, as all B.C. municipalities grapple with the financial implications of the COVID-19 response.
“We’re all finding ourselves in a time of incredible financial pressure,” said the Union of B.C. Municipalities president, Maja Tait. Tait, the mayor of the District of Sooke on Vancouver Island, is canvassing the organization’s membership on their needs.
How the pandemic hurts municipal revenue will vary by municipality, Tait said, but the big worry for all of them is the prospect of cash-strapped home and business owners defaulting on property taxes, since municipalities legally cannot run deficits.
“We know that ... households and businesses are caught in a severe financial crunch and they’re hurting,” Tait said.
Tait said the UBCM is developing a “common understanding” of the problems municipalities are having and are in weekly contact with the province about a possible response.
Municipal Affairs Minister Selina Robinson said in a statement that her department was working on a solution to support local governments. She was not made available for a followup interview. “I know COVID-19 is also causing significant financial challenges for Vancouver and all municipalities,” Robinson said.
In Vancouver, the staff report that Stewart unveiled outlined three scenarios. In the most optimistic estimate, where physical-distancing requirements begin to be lifted by the end of May, the city would face a net loss of $61 million in revenue, after accounting for savings of having facilities closed and a clampdown on discretionary spending. The loss would be $111 million if facility shutdowns and physical distancing go on until the end of August and $189 million if the measures last until Dec. 31.
That is after savings of between $26 million and $36 million from closing facilities.