On March 12, 2020, the province first announced the closing of schools to combat the spread of Covid-19. This was soon followed by the closing of many City facilities and non-essential businesses. On March 25, 2020, City Council approved interim measures that would assist taxpayers on a short-term basis with the payment of the 3rd instalment of property taxes, CR127/2020. To date, the City has been utilizing cash payments received and existing cash reserves to fund municipal operations and will continue to do so for the first half of the year. However, in order to continue to support ongoing operations and to avoid the depletion of cash reserves, Administration will be required to prepare and issue Final Property Tax bills.
Background:
On January 27, 2020 City Council approved the 2020 municipal budget that resulted in a total levy requirement of $426.6 million. Included in this levy was $2.3 million which will come from property assessment growth (new development/new taxpayers) and the collection of education taxes of $63.7 million. The remaining $361.5 million was anticipated to be collected from existing taxpayers representing an expected 2.12% increase in property taxes. Consistent with prior year and to ensure adequate cash resources until such time as the budget was approved and final tax rates could be established, Administration prepared and issued Interim Property Tax Bills which equated to $208 million or 50% of the total 2019 property tax levy.
It is clearly acknowledged that the events of March 2020 has created a tremendous financial burden for all taxpayers. It is also recognized that financial relief will be sought by taxpayers from all levels of government. Administration, in conjunction with other municipalities and municipal associations, have started the process of looking at the development of programs that could potentially assist taxpayers. Unfortunately, it is too early at this time to have a full understanding of the financial impact on taxpayers in order to develop and make recommendations for a tax relief program. Many programs at the Federal and Provincial level which provide subsidy for employment income at the business and individual level continue to be forthcoming. The risk of setting up property tax relief programs too early is that they are ineffective at achieving the desired targeted outcomes.
This report seeks City Council’s approval on property tax related policy and administrative matters necessary to allocate the approved total tax levy amongst 1) property classes and 2) property owners. Typically this report would present to City Council each of the factors to be considered in making tax policy decisions and seek from Council direction in terms of Guiding Principles. For various reasons mentioned in this report and as a result of the recent events which have impacted the City, Administration has chosen to finalize the tax policy process which includes formalization of the 2020 tax rates on the basis of status quo. This means that the recommended final 2020 tax rates would be calculated consistent with the decisions and directions used in 2019. This report also provides City Council with information as to the billing process, due dates and late payment charges.