Municipalities ask for help as pandemic drags on
Joint letter requests provincial, federal bailout as costs mount
There is no way to sugar-coat it. The COVID-19 crisis is putting a crunch on municipal finances.
Niagara Region and the12 lower-tier municipalities penned a letter last week asking the provincial and federal governments for financial help. Combined pandemic-related expenses in Niagara will surpass the $50-million mark by the end of June.
The letter was a joint effort, the product of conference calls between top municipal staffers, Region Chair Jim Bradley said. He described their collective mood as “cautious worry.”
“No one is panicking,” Bradley said. “It’s not wild alarm, but we would be very concerned if we did not see some assistance in the financial sense from the senior levels of government.”
COVID-19 related costs include extra protective equipment for staff, cleaning and lots of overtime.
There is also a loss in revenue. Much of the Region’s income derives from property taxes, which are collected by the local municipalities.
With unemployment rising, businesses struggling and tourism shuttered, regional council recently approved concessions to the municipalities to ease the strain on taxpayers.
They include allowing partial payments without penalty for the general tax and special purpose levy amounts as well as amendments to water and wastewater collections.
A report from the Region said that as of mid-May “remittance experienced to date has been 75 per cent of the total $100.3 million.”
The report said five municipalities have paid in full, with the remaining seven are making partial payments.
Without help from the province or Ottawa, Bradley said, the alternative would be drastic cuts in services and substantial increases in property taxes.
There are also services for which the Region’s ability to manoeuvre and save money is minimal. They include Ontario Works and ODSP, public health, public housing, ambulance services, water and wastewater plants, and long-term care homes.
“We could find ourselves in challenging circumstances,” Bradley said. “We don’t want to face that. I don’t think our senior levels of government want to see that happen either.”
Bradley said the Region’s ability to raise money is limited. Senior levels of government have income taxes, sales taxes and other taxes not available to municipalities.
“Property taxes also don’t take into account the ability to pay,” Bradley said. “In times such as these, a person may have lost income and have a significant assessment on their home but meagre funds coming in. To deal with this matter based on property tax in all our municipalities would not be appropriate.”
Municipalities are also not allowed to run deficits. The books must balance at year’s end. Bradley said changing legislation to enable deficit spending, even on an emergency basis, isn’t the answer.
“It doesn’t solve our problem,” Bradley said. “We are not in the same borrowing situation as the senior levels of government either.
“Our access to funding sources is not what it is for the federal and provincial governments.”
Niagara’s municipalities have a list for the province.
It includes emergency operating funds, long-term grants to maintain service levels, and a reduction in the municipal proportion of provincial infrastructure funding to 20 per cent, down from the usual onethird. Bradley made a point to highlight local efforts made to conserve funds during the pandemic.
They include hiring freezes, temporary layoffs of non-essential staff, reduced nonemergency repair work, reduced transit service costs, deferred seasonal services, and cancellations or deferrals of non-essential capital projects.
“We did all of that to show we understand the circumstances we face,” Bradley said. “We think what we have asked for is realistic. We think it is fair.”